June 2005

By Cam Collins, MBA, CPM, RPA, ABR

Whew. Glad that's over. My vacation from the paper, that is. It has been about four months since I have been able to sit down and write a column. Terry and I have been literally selling houses as fast as we can get our hands on them. Our Realtor friends report the same. No question about it, activity has picked up in the resale sector. So also in new homes, I will make a comment or two about that later.

This article is entitled a Tale of Two Villages because I will draw a point regarding sales in the newer areas versus the older, original areas of The Woodlands. I have written on this before, but this week I will use a roundabout way to get there. We'll take the long way home.

To Pool or Not to Pool

This time of year, people are constantly wondering about swimming pools, whether they really add value or not. I have said in this column before: if your family will enjoy a pool and you'll use it, go for it. Enjoy! But don't call your Realtor and automatically expect to get dollar for dollar out of the place when you sell.

First I'll give you a couple of rules of thumb, but then I am going to give you some hard statistics that will make the picture absolutely clear, and help you make a decision about putting in that pool.

Thumb 1. For newer pools, 2 to 3 years old, contemplate a maximum of 50 cents on the dollar return on the actual cost of the pool itself, if you have to sell. You might get a bit more, but don't plan on it. To be conservative, use 30 cents on the dollar.

Thumb 2. For older pools, use 20 cents on the dollar maximum . Don't fool yourself, especially if the home you live in has been a resale with the pool there before. Use a figure of what a simple pool would cost in the calculation, not an elaborate spa/waterfall playground scheme…it doesn't work in the free marketplace.

Why? Here's the reason. Most buyers view pools as an item that can be added later. Here's the quote from the typical prospective buyer: "if you find me the right house, I can add the pool…" Shucks. I am not sure of the statistic, but how many buyers do you think actually add that pool after they get in the home? I'd guess far fewer that 50%. It's just not that big a priority! It's an emotional consideration, period.

But to pool or not to pool, that is the question. Having said all of the above, here are some realities to prove the point, and help you decide whether you should put in that pool.

Did you notice that in the rules of thumb above, I commented on the age of the pool, not on the age of the property? That's the difference, and it is huge. Watch closely, here is where it gets interesting.

Between January and May of 2004, homes in The Woodlands built before 1990 were selling well. Overall property appreciation in Grogan's Mill and Panther Creek is among the highest of all The Woodlands Villages.

That trend has continued into 2005, with average appreciation in those same months running at a whopping 6.6% for the first five months alone, for those properties that sold without a pool! WITHOUT A POOL!

If I leave the computer search to the exact same pattern, but with a pool, older homes that sold in those two exact periods went DOWN in relative value. THE POOL ACTUALLY BECAME AN IMPEDIMENT TO APPRECIATION! Further, while the overall market is increasing in numbers of sales, sales of older homes with pools actually went down, from 49 sales in 2004 to 44 in 2005. Yuk. Sorry to be the bearer of bad news. You want the truth, right?

For newer homes the affect is not so dramatic. But it's there. For houses that are 10 years old or newer, between comparing the first five months of 2004 with the first five months of 2005, appreciation was 2.5% on properties without pools, versus 1.9% on properties with.

I'm not being cocky, rather, I am just admitting my own lack of long term judgement. Guess what's in my backyard? A 42,000 gallon mega-lap-pool and super-party-spa. Let me see…how much can I get for that? Hmmm….pi-r-square. No, pie are round….

Anyway, about the Two Villages

For the good reader who does not have a pool and does not give two cents for a discussion about such, take heart. You are doing the right thing. If you are fortunate enough to live in an older Woodlands neighborhood and you like it there, God bless you.

Be aware that resale values in the newer villages, especially New Indian Springs and Sterling Ridge, and super-especially along what I call the Carlton Woods corridor, are staying high. Even the poor souls who have lived in Alden Bridge so long, where the taxes have outrun the values, are getting some relief in sales values. (More relief is needed, see below).

This trend will continue in the newer villages as long as our good friends at The Woodlands and County Government offices pay attention to the transportation issues. Synchronization of the traffic lights on Woodlands Parkway and Research Forest has had a huge impact. HUGE.

NEW HOMES. Our most sincere congrats to our friend Mr. Tim Welbes, recently promoted to the well-deserved position of President, Woodlands Development Company. Tim continues to do a magnificent job with development of new areas, not only the incredible job in the Town Center, but also in Sterling Ridge Center. New home sales are still on track for about 1200 a year, Tim reports. (About 1 in 2 buyers for our area buys a new home).

NEEDED. Alden Bridge residents should absolutely positively insist that Kuykendahl Road extension be finished to FM 1488. (Right now it stops at Alden Bridge Center) Contact the Village Association reps, who hopefully will be in touch with the County Commissioners or County Judge. Traffic in the back reaches of Research Forest Drive is still a mess, and it is an impediment to property values. Yes, I realize that traffic on 1488 itself is a super-mess until the expansion is complete, but the continued slowness of appreciation in Alden Bridge should be the driving factor. I mean, it would seem that our County Taxing Fathers would want values to go up, correct? As it is, Terry and I hear so many complaints about over-valuation of taxes in Alden Bridge, that I should reserve further comment. Enough said.

HOW TO KEEP TRACK OF YOUR VALUES. Stay in touch with Terry or me, or your good Realtor, via email, and watch your value carefully. Especially if are thinking of selling and you can control the timing. Remember, we can now easily program your exact house and neighborhood, so that you get actual live automatic email links regularly, with market updates. No charge. Just email us.

Cam Collins and Terry Kloos are the Owners of Realty Executives Woodlands-Spring.
Email cam_collins@topproducer.com or tkloos@rexecutives.com.