Nation's housing slump becomes even worse

By MARTIN CRUTSINGER
Associated Press

WASHINGTON — The slump in housing deepened in the final three months of last year, with sales falling in 40 states and median home prices dropping in nearly half the metropolitan areas surveyed.

Formerly red-hot areas were among the hardest hit as the five-year housing boom cooled considerably in 2006.

But in Texas, sales volume picked up at a rate of 6.1 percent in the fourth quarter compared to a year earlier. In the Houston area, the median used home price reached $148,600 in the fourth quarter, a 1.6 percent increase over the same period a year earlier.

In other economic news, industrial output fell in January by the largest amount in 17 months, reflecting huge cutbacks at auto factories and weakness in housing-related industries. The Federal Reserve reported Thursday that output at the nation's factories, mines and utilities was down 0.5 percent in January, the biggest setback since Hurricane Katrina disrupted activity in the fall of 2005.

And the number of newly laid-off workers filing claims for unemployment benefits jumped by 44,000 to 357,000 last week, the Labor Department said. It was the largest one-week increase since September 2005 after Hurricane Katrina. Part of the increase in jobless claims last week was due to a blast of cold in the Midwest and Northeast, which triggered higher layoffs in such industries as construction.

While some economists said they believed the worst may be over for housing nationwide, others predicted more price declines to come until near-record levels of unsold homes are reduced.

The National Association of Realtors said the states with the biggest declines in sales from October through December compared with the same period in 2005 were: Nevada, down 36.1 percent; Florida, down 30.8 percent; Arizona, down 26.9 percent; and California, down 21.3 percent.

Condominium sellers throw in some perks

Incentives could point to a slowdown in the market

By NANCY SARNOFF
Copyright 2007 Houston Chronicle

Is Houston facing a slowdown in the condo market?

One sign could be that condo converters who turn apartments into for-sale units are offering buyers valuable perks to purchase condos in their buildings.

The developer of Rise, a Midtown building that was converted last year is offering free association dues for a year and help with closing costs.

A project near the Texas Medical Center, 7575 Kirby, is promoting 100 percent financing on its units, which started out as apartments and were converted before the development was completed.

And the Oak Lane Garden Condominiums near River Oaks touts 100 percent financing, as well as a $2,500 incentive for Realtors.

Developer Mike Atlas said he's sold about half of the 56 units in one section of the Oak Lane Garden Condominiums near River Oaks and sold the remaining 160 units to a company planning to build new apartments there.

"In the condo market, you have to be patient," he said.

The poster child for the conversion market is Florida, where overzealous developers created a glut of units by converting numerous apartment buildings to condos, causing prices to fall.

Houston's had its own boomlet, and competition is mounting.

No doubt, price increases for condos and townhomes here have been marginal.

In November, the median sales price was $120,700, up less than 1 percent from the same month the previous year, according to the latest data from the Houston Association of Realtors. And sales were up just 1.5 percent to 535 units.

Still, no one's predicting a Florida situation, where many conversion projects are being turned back into apartments.

Developments that sell best have something extra, like unique architecture, high-end finishes or a good location, said Sandra Gunn, a real estate agent active inside the Loop.

"Absorption has slowed down some, but people still want to buy that product," she said.

Endangered list grows
Houston's preservation society has added yet another structure to its ever-expanding list of endangered buildings.

The property it says is at risk for demolition: the historic James and Jessie West mansion along Clear Lake.

In October, Hakeem Olajuwon bought the 17,000-square-foot Italian Renaissance mansion and its 41-acre site from the Pappas restaurant family. The property is to be sold in parcels.

Though the estate is listed on the National Register of Historic Places and is a Recorded Texas Historic Landmark, neither designation would prevent its demolition, according to the Greater Houston Preservation Alliance. If someone were to save the building, however, its National Register listing allows for substantial federal preservation tax credits if the house is restored to high standards.

"We had hoped that Mr. Olajuwon would use his resources to preserve this extremely important property as he did with his adaptive reuse of the Houston National Bank building on Main Street," said Ramona Davis, the group's executive director.

The old Houston National Bank was purchased by the former Houston Rocket and turned into the city's first downtown mosque.

A real estate broker marketing the West property said there have already been offers from developers of apartments, a hotel and a senior housing community.

"There is interest in incorporating the house as a part of some of these development plans," said David Cook of Cushman & Wakefield, adding that parcels won't be sold until it's determined how the acreage will be divided.

In the late 1920s, oil, lumber and cattle baron J.M. West Sr. commissioned architect Joseph Finger to design the opulent house, at 3303 E. NASA Parkway at Space Center Boulevard. The expansive site still includes the original tennis court with twin gazebos, swimming pool and changing rooms, a nine-car garage and a manager's house.

The preservation group created the endangered list in an attempt to generate public awareness on historically significant properties threatened by demolition.

Other recent additions to the endangered list include the River Oaks Shopping Center, River Oaks Theater and the Alabama Theater/Bookstop.

Northwest medical center
Kelsey-Seybold Clinic has announced plans for a medical center in the Vintage, a 640-acre planned development near the Hewlett-Packard campus in northwest Harris County.

The physicians group purchased 10 acres for the center in the Vintage, near Louetta and Texas 249. Construction on the 60,000-square-foot project will break ground this spring.

"As the northwest communities continue to expand, so do local families' needs for comprehensive and convenient medical services," Dr. Spencer Berthelsen, Kelsey-Seybold Clinic chairman of the board, said in a statement.

The facility will be for one-stop health care, Berthelsen said. It will have diagnostic testing services, laboratories and a pharmacy. The center will also have a 12,000-square-foot St. Luke's Minor Emergency Center.

Harrell Architects will design the clinic, which will serve as the new home for the physicians and staff currently housed at Kelsey-Seybold's Willowbrook clinic.

The Vintage is a joint venture of Kickerillo Cos. and Mischer Investments. In addition to high-end housing, the project will have commercial developments, including a shopping center modeled after Uptown Park in the Galleria area.