Do the Rockets still have a chance for LeBron James?

HOUSTON, Texas (KTRK) -- With LeBron James telling the Cleveland Cavaliers on Friday that he will not exercise his $35.6 million contract option for next season, where does that leave his future?

Do the Houston Rockets still have a chance?

Hours before the start of NBA free agency, James arrived back in Los Angeles on Saturday from a family vacation in the Caribbean. He has two homes and a film production company in the Los Angeles area.

The Cleveland Cavaliers and the Lakers are the leading contenders. James, who is from Akron, Ohio, can get the most lucrative package by staying in Cleveland: a five-year, $209 million contract.

While the Rockets once seemed a good fit, James declining his option all but eliminated the chances of him joining up with close friend Chris Paul and MVP James Harden. If James had opted in with the Cavs, they could have worked out a sign-and-trade with Houston.

The Rockets will look to resign key players on their own roster, including Chris Paul, Clint Capela, Trevor Ariza, Gerald Green and Luc Mbah a Moute.

The Associated Press contributed to this report.