Every week, we ask a real estate professional for their thoughts on the top trends in real estate.
This week, we talked with Will Holder, president of Trendmaker Homes.
Houston Agent (HA): Why is it that college curriculum covering the building sector of real estate is so rare? Who would you recommend your course to?
Will Holder (WH): There are, I believe, 66 universities that have real estate courses in the country. The ones I know around here are Rice, Texas A&M, U of H, they all have programs. Real estate is kind of a funny industry. My wife was talking about our son getting his history degree and was wondering what he might do with that. And I said, “well, there’s always homebuilding.” The industry is full of people with a variety of different academic training, but I’ve found it super rewarding to see students choosing early on they want to enter the real estate industry. I believe the industry truly needs to have more sophistication. When I got into real estate, the easiest path to management was through construction. At that time, there were so many people who felt like it was a construction industry, when in reality it’s a retail industry. Construction is certainly the science aspect of it. But it’s like a restaurant, where you need to do more than cook good food – you need run a good business; and the same is true of homebuilding.
With these new college programs, we’re seeing new levels of sophistication in the industry. It’s good for the students – great careers for them – and I think the industry will be better for it.
HA: What is holding back the building of more affordable, entry-level homes in Houston?
WH: I see a few things happening. One, is competition. When I used to build, my first home was a David Weekly home, it was $70,000. It was a nice home, but it had nothing – basic everything. At that time, a high-end deal meant tile backsplash. But as competition crept in, there was two ways to compete: get cheaper or build better. In Houston, we had room to get better, so we looked at it as something of an amenity race. We started improving homes and using those improvements as value proposition points. Buyers came to expect more and more. You go out and say you want to buy a starter home today, and the standards are much higher than they were historically. There is an expectation of a standard level, similar to cars today. If you look at some smaller, economical car, now it’s bluetooth enabled with a camera in the back – you go down the list and it looks like a Mercedes 10 years ago. Because of those new standards, the way we build and the product we have to deliver, you can’t easily deliver a cheap home anymore. You can’t deliver a utility shelter style box very easily. You have to warrant it for 10 years; it’s got to be super energy efficient; it has to built under all kinds of environmental parameters; you need silt control and all the things that go along with a home regardless of price. We’ve created a scenario of impossible-to-build, truly affordable homes anymore. I, personally, don’t know how to do it.
HA: What are some new home trends in Houston, and what do you think will be the trends in 2016?
WH: The expectations have not gotten any less. The trends are generally higher and higher finishes, and that, in my opinion, goes across the entire price spectrum. If you’re getting a $1 million home, you’re expecting an amazing home with all the amenities. And if you’re getting a $250,000, you’re still expecting that bluetooth and back-up camera. It’s even things like carpeting. People don’t like carpeting that much. But carpeting costs $1 a foot, while hard surfaces, wood, might cost upwards of $9 a foot. If you’re trying to sell a home for $90 a foot and you add in hardwood floors, all of a sudden you have a 10 percent more expensive home. At Trendmaker – and I believe this is true of the industry – no one wants to build these sheltered-styled, stripped down homes. Is there a need for it? Yeah. But are those the people that should be renting or buying. That’s another question I don’t have an answer for. The existing market, I think, has done a pretty good job of meeting the needs of starter families. I see a lot of my friend’s kids buying existing homes for less. And it is a good idea. But there are a certain numbers that just have to built every year. Period.
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