Houston Neighborhoods to Watch for New Construction in 2023

Houston is not one market. It is dozens. The neighborhoods that make sense for new construction in 2023 are not the same neighborhoods that made sense in 2018 or that will make sense in 2028. I am writing this from a builder's perspective, not a flipper's. Build for the family that is going to live there in five years, not the comp that closed last week.

Sunnyside

South of downtown, Sunnyside has had buildable lots in the under six figures range for years. The neighborhood is changing slowly, with consistent infill activity. Risk: comps still pull from older inventory, so appraisals can be a challenge on the higher-end builds. Watch flooding history block by block.

Independence Heights

Just north of the Heights and inside the loop. Land prices have moved up, but there are still pockets where you can acquire and build profitably. Demand is strong because of proximity to downtown and the Heights. Watch for deed restrictions and lot size on older platted blocks.

Trinity Gardens

Northeast of downtown. Quieter than Sunnyside in terms of infill, which means you may be one of the first new construction homes on a block. Pricing should be conservative until the comps catch up. Strong opportunity for build-to-rent.

Acres Homes

Northwest. Larger lots, more variety in lot configuration, and a wide spread of existing housing stock. The Acres Homes Brrrr corridor has been active. Drainage and lot grading matter more here than in the inner loop. Walk the lot in the rain if you can.

Northside Village

Just east of the Heights. Land prices have moved fast. The opportunity is narrowing, but it still exists for builders who know the streets. Watch for zoning and platting nuances. Tight lots require tight plans.

Fifth Ward

East of downtown. Significant public investment, ongoing infrastructure work, and active community organizations. Good for builders who want to be part of the neighborhood, not just extract from it. Long-term outlook is strong. Be thoughtful about price points and finish levels relative to existing residents.

Settegast and Kashmere Gardens

Northeast, adjacent to Trinity Gardens. Earlier-stage markets in terms of new construction activity. Lower entry cost, longer hold expectation. Best for patient capital and builders thinking about build-to-rent portfolios.

Risk Factors That Apply Everywhere

• Flooding. Pull the FEMA map and the city floodplain map for every lot.
• Drainage. The lot to the north may be higher than yours. Walk it.
• Soils. Houston clay moves. Geotech is not optional.
• Comps. If your build is 30 percent above the neighborhood comps, the appraisal will fight you.
• Deed restrictions. Some blocks have private restrictions older than the city code.

What I Tell New Builders

Pick one neighborhood. Drive it on a Saturday morning and a Wednesday evening. Pull every lot listing and every recent sale for six months. Walk every active new build you can find. Talk to the people on the porches. The neighborhood will tell you whether it is your neighborhood. The comps will not.

At Coffee & Construction Houston, we map active builds and live deals each session. The room is The Construction Lounge. The builder behind the room is BEDDIEO Construction & Design. You can also see my work as a Houston developer.