Galveston has been compared with many things, but rarely with the Hamptons. But that’s precisely the comparison that this NY Times Sunday article makes as it reports on the throngs of Houstonians who have fueled the beach home building boom on the island over the past decade:

Only 51 miles southeast of Houston, Galveston still has plenty of vacant land, low home prices and miles of wide-open beaches. Over the last four years, the average price of a home has risen 89 percent, to $232,800 in January, according to the Galveston Association of Realtors. Prices for water-view lots are now more than double what the Wisemans paid. A single water-view lot at Beachtown costs $300,000, though other lots without views could be as low as $80,000.
ìThe world has discovered the Gulf Coast,î said James Gaines, research economist at the Real Estate Center at Texas A&M University. ìYou want a second home on the East Coast at an affordable price, and youíre not going to find anything. Here, itís still available and affordable.î [. . .]
ìGalveston is experiencing a renaissance it hasnít seen in 100 years,î said Jeffrey G. Sjostrom, president of the Galveston Economic Development Partnership. ìThe beauty of the development is that itís comprehensive and diversified. Our eggs are being spread across many baskets.î
The development seems to fly in the face of Galvestonís geography. As a barrier island, the city can flood during tropical storms. Sometimes, its beaches erode. In September 2005, the city was evacuated when Hurricane Rita threatened the island. But home buyers keep coming because a large-scale hurricane has not damaged the island in more than 20 years.
Developers are putting up condominium towers, resorts and acres of homes from one end of the 32-mile-long island to the other. More than 6,500 residential units are under construction; most of them are condos, according to the development partnership. At the western end of the island, Centex Homes is building one of the largest projects, a 1,000-acre development with 2,300 houses and condos.

Meanwhile, this Harvey Rice/Chronicle article reports that questions are being raised about the rampant develoment:

The first map detailing geological hazards on Galveston Island shows a potential clash between development and the environment.
Several subdivisions already sit in what may be the most dangerous areas of the island ó low spots where walls of water bulldozed their way through in previous storms.
More construction is planned in those areas and others despite the threat of storm surges and beach erosion as well as the impact on economically important wetlands, according to findings recently presented to the City Council.

By the way, if you’re interested in making an investment in Galveston, I suggest you wait awhile. The island is long overdue for a hurricane and many folks have forgotten the damage that the minimal category 3 Hurricane Alicia caused on the island in 1983. Beach home property values plummeted in Galveston after that storm. They are a good bet to fall after the next one, too.