It's home building's off-season, one that Real Estate Consulting's John Burns characterizes as providing "the most angst in years," and ISI Housing Research partner and senior managing director Stephen East sums up in four words: "Inconsistency. Uncertainty. Volatility. Concern."

Standing apart from other housing arenas--ranging from the hyperkinetic futures market that is Bay Area real estate right now to the "was that it?" radio silence in some Phoenix and Inland Empire submarkets that were rocking in early June--is Houston, Texas' largest city.

Houston embodies all of what home builders need right now, a jobs- and household formations-driven surge of demand that has taken on a life of its own. The tide of this demand, buoyed as it is by Animal Spirits of confidence and expectation, counteracts against the stifling forces of suddenly-higher interest rates. What home builders don't need is to mess it up with a glut of unwanted, badly located homes thrown up merely to try to capture a bit of the volume game.

As land prices head north, from post-downturn levels in the 20s per lot to the six-figure territory we're hearing of now, the game will become an ever-higher-stakes wager that will match one builder's program against another's. The tide may rise, but all ships get no guaranty of getting a lift.

The links line-up below will debrief you on deals, market dynamics, labor and materials bottlenecks, the latest in design, and the business environment for more deals. Net, net, Houston's moment is now--for more investment, more dirt deals, more new neighborhoods, and more mergers and acquisitions that come when the lot-price mechanism triggers and less-well capitalized players need an exit option.

By nature, a hive of activity may hide perils as it conceals opportunities for the fleet of foot, the well-connected, and the deep-pocketed.

Let's look at the lay of Houston's land:

* UNDISPUTED MASTER OF MASTERPLANS: As if it needed to make an even stronger point of its dominance in the Houston market, Johnson Development Corp. last week re-aligned with investor partner Tricon Capital Group to close on a 2,100 acre tract whose locale--a hop, skip, and a jump from The Woodlands--will be a big builder magnet by the time it's ready with it's land plan.


* AMERICA'S HOTTEST FUNDAMENTALS-DRIVEN MARKET: Metrostudy Houston regional director David Jarvis writes, "The Houston new home market continued to surge in 3Q13, with builders starting construction on 7,900 new homes, the fastest pace in over five years. Representing a year-over-year gain of 23%, Houston hasn’t seen this many new homes started through the first three quarters of the year since 2007."


* LABOR SHORTAGE: CultureMap Houston's Ralph Bivens notes "Houston new homes sales will rise in 2014, Jarvis predicts. But they could be even better if Houston had more construction tradesmen to build the homes people want to buy."

hill country moderne

* DESIGN WITHIN REACH: What's behind the suddenly-hot Hill Country Modern elevations and interiors Michael Woodley created for Partners in Building? Two motivators, really. One is financial, the other aesthetic. Buyers of Hill Country Modern homes aspire to a custom home feel, but without the seven-figure base price tag. This is where the design comes in, capturing the livability and look of a contemporary, ultra-connected home, with a strong tinge of warmth and accessibility to the geography. Bottom line, contemporary is coming and, if it's coming to Houston, it's coming everywhere.


* SO, WOULD TEXAS WANT TO BE THE NEXT CALIFORNIA? Redfin asks the question; the marketplace will answer. Texas' low-to-no regulation environment has kept supply of new home inventory robust enough to avoid house price bubbles of the past, and one can surmise that the current shortage of new-home inventory is only temporary. That's especially true if home buyers' and would-be home buyers' access to mortgage capital remains tight or gets even tighter as new Dodd-Frank qualification and risk reserve rules go into effect.

Near term, and we mean very near term, we're going to see more mergers and acquisitions, with big guys shoring up their beachhead in the Houston markets, taking out local competition, and putting some of those stronger design and pricing programs to work along with access to acquisition and development capital. We won't be surprised to see one or more deals conclude before the end of the month, because that's what calendars and the off-season in home building are for, after all.

Learn more about markets featured in this article: Houston, TX.