A surge of interest in West End property and a boom in construction of high-dollar homes is driving up land values and causing worry among some long-time residents about traffic and environmental damage.
Land values west of 83rd Street have increased at about 5 percent a year during the past five years, according to the Galveston Central Appraisal District. The district couldn’t provide average lot costs on a request submitted last week.
But the taxable value of residential property west of 103rd Street has increased by almost 37 percent since 2014, to $2.6 billion in 2018 from $1.9 billion, according to the appraisal district.
Last year, property on the market west of Sunny Beach was valued at $188.8 million, up 18 percent from $159.9 million in 2017, according to data from real estate company Sand ’N Sea Properties and the Houston Association of Realtors.
Last year, market values west of Sunny Beach constituted about 60 percent of the estimated $313.9 million in island property on the market, according to the same data.
There are more eyes on Galveston now, said Beau Rawlins, owner of Rawlins Residential Builders.
City leaders’ efforts to promote the island have largely succeeded, evidenced by the 7.2 million tourists that visited Galveston last year, and recent home remodeling shows focused on the island, such as “Big Texas Fix,” have painted Galveston in a light that makes people want to invest, Rawlins said.
“It is truly one of the last affordable places that is supported by a great community on the coast,” Rawlins said. “They can rent these homes out once or twice a month and literally have their mortgage paid for.”
Building is booming on the West End, he said.
PRICES ARE RISING
There are 274 active new residential building permits on properties west of 83rd Street, according to city data. That includes permits approved as early as 2014. Last year, the city issued almost 140 new residential construction permits, according to city data.
Most of the people moving to this area of the island are buying second homes, said Jeff Ehrich, owner of Seaside Construction, which builds custom homes, many on the West End.
After Hurricane Ike in 2008, land was very cheap, Ehrich said.
“Nobody wanted anything to do with a beach home,” Ehrich said.
But prices are rising and now and he builds beach homes for between $950,000 and $1.4 million, he said.
“The more demand, the less supply, the more money it costs,” Ehrich said.
More people could also mean more businesses.
While West Enders have typically stayed loyal to small businesses in that area of the island, a higher population could drive more commercial interest, Rawlins said.
Residents typically like to shop at local, small businesses on the West End, but could use some additional shopping, said Jerry Mohn, president of the West Galveston Island Property Owners Association.
The group opposed expansions of national chains such as Dollar General into the West End, but residents to have to realize people want to move to the area, Mohn said.
“That’s how we all got here,” Mohn said.
The growth might be good for business, but it comes with some concerns from established residents, Isla del Sol resident Boyd Carr said.
“There’s been six homes built in front of the existing homes toward the beach,” Carr said of his neighborhood. “That’s where, when Hurricane Ike and Alicia came, they lost houses. They’ve forgotten and I don’t think they care.”
He’s worried about effects this increased construction could have on beaches, he said.
“My concern is that they think because there’s no dune there, they own everything in front of it,” Carr said.
But not all residents think the growth is bad.
People generally do their best to comply with building requirements, Dunes of the West resident Jay Lendrum said.
“Obviously, it’s going to stretch the city of Galveston’s resources because you’ve got to put in wastewater and lighting,” Lendrum said.
He knows more houses on the West End means more people, but he understands why people want to move to the area, he said.
“Honestly, 95 percent of the people who buy a home down here is because they were a tourist and they really liked the environment,” Lendrum said.
The West End is already drawing more people because of increased tourist activities, said Ross Novelli Jr., developer of Sunset Cove subdivision.
“Everybody’s biggest concern down there as far as everything being built out is the traffic issues on the weekend,” Novelli said.
More residents, even part time, will bring more cars, he said. Tourist traffic gets heavy on the weekends and FM 3005 is the only road into the West End from east Galveston Island, Novelli said.
The building boom is likely to continue, but eventually, the supply of land will likely dwindle, Novelli said. As an island, Galveston has only so much room, even west, he said.
But Carr doesn’t see construction slowing any time soon, he said. He anticipates interest will remain for a while, he said.
“When we first moved out here, there were like two homes a year being built,” Carr said. “Now there’s one every month.”