As home building slows, more developers turning to condos as townhomes

McALLEN - A glut of vacant housing lots and a dwindling interest in new homes are leading many McAllen developers to look into a new direction - condos and townhouses.

Almost counterintuitive in a region where a new home can cost as little as $80,000, developers across the Upper Rio Grande Valley are turning to community dwellings to target young professionals, retirees and Mexican nationals.

Several new condominium projects, mostly in McAllen, are expected to add hundreds of new units to the area during the next 18 months. Developers plan to break ground this month on a $16 million high-end condo project in South McAllen and another group is planning a high-rise tower in Edinburg near Expressway 281.

"It's kind of a gamble because it's out of the norm," said Fred Harms, a local entrepreneur and developer of a town home project in central McAllen.

Harms and a group hope to finish the first of 37 town homes this summer. The town home neighborhood is called Barrio Antiguo and the homes range from $180,000 to $220,000, Harms said. The price is similar to other single-family units in the neighborhood near Date Palm Avenue and North Sixth Street.

Like other new condo and town home projects in the Valley, Barrio Antiguo developers are targeting people who don't want the trouble of keeping up with a large property.

"I think we are looking at empty nesters and Mexican nationals that don't want yard maintenance," Harms said.

Much of the increased interest in McAllen-area property is coming from shoppers from Mexico, said Eva Jean Radle, a local real estate agent with ReMax. There have also been more prospective buyers who for the most part live in Mexico, but work or go to school in the United States, she said.

"It's usually people that want to come here and have a place to stay without any strings attached," she said.

Some developers are also looking to add an affordable option to one of the Rio Grande Valley's most expensive housing markets.

Sam Saxena, a mortgage broker who lives in McAllen, is building a 192-unit development on Jackson Road in North McAllen. Latitude 360, again, targets young professionals who may not be able to afford a home in the central McAllen area. Units start at about $90,000, Saxena said.

Most other homes in the area cost more than $120,000.

The property will have a modernist design and the units will start at about 1,000 square feet. The development will also have a shared pool and park areas, all covered by condo community fees.

"With the single-home marketing having dried up, builders are looking to do something new to keep the industry going," said Saxena, who has done other apartment projects in Pharr and Edinburg. "This is a market that really hasn't been touched."

Also targeting small families and singles, another group led by Alex Maheshwari has been building a town home project in Edinburg for more than a year. Maheshwari said six of the homes are already occupied. Among the tenants are single parents, young professionals and Mexican nationals using it as a vacation home.

"Land is getting very, very expensive and people prefer to live closer to shopping, jobs and a hospital," said Maheshwari of the development near McColl Road and Freddy Gonzalez Drive in Edinburg.

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Kyle Arnold covers business, the economy and general assignments for The Monitor. You can reach him at (956) 683-4410.