Existing home sales slip in November

09:10 AM CST on Thursday, December 29, 2005
Bloomberg News

U.S. sales of previously owned homes declined last month to the lowest level since March, adding to evidence the housing market is cooling.

Home sales dropped 1.7 percent to a 6.97 million annual rate from October's 7.09 million pace, the National Association of Realtors said today in Washington. The number of homes for sale increased to the highest level since April 1986.

A rise in mortgage rates this year and higher home prices that have made housing less affordable will slow sales and deprive the economy of a source of strength in 2006, economists said. Home purchases are forecast to wane next year after a five- year boom.

“Demand appears to be cresting,” Michael Gregory, a senior economist at BMO Nesbitt Burns in Toronto, said before the report. “The market is definitely cooling, but we haven't yet reached the point where we're going to have single-digit price appreciation.”

The median price rose 13.2 percent from a year ago to $215,000, the Realtors group reported.

Economists expected sales to fall to a 7 million annual rate, according to the median forecast in a Bloomberg News survey. Estimates ranged from 6.75 million to 7.2 million. November's level is the lowest since 6.87 million in March.

High-rises: No holding back

Steve Brown:

But developers face a challenge in filling so many costly units

01:55 PM CST on Friday, December 16, 2005

Dallas developers aren't buying all the chatter about a housing bubble.

You can tell it by looking at all the high-rise condominium projects in the works.

There are about 15 projects with more than 1,700 luxury condo units being offered in the Dallas area.

Although that's a fraction of the total housing construction in North Texas, the pool of buyers willing to pay as much as $450 per square foot for high-rise living can go only so far.

Compare that price tag to the average cost of a home in the Park Cities – $273 per square foot. And the average pre-owned single-family home in North Texas sells for $89 per square foot.

At least seven more condo projects are on the drawing boards for Uptown.

With the high-rises already on the market, the neighborhood could add 1,000 units or so.

Most of the latest deals have something in common: They're all getting larger.

With rising land and construction costs, most developers can't afford to build fewer than 100 units.

That means even more high-rise condos to find buyers for.

And their success won't depend just on the strength of the local housing market.

With as many as 30 percent of the pre-sales in these buildings going to what are believed to be investors – some from California and Florida – a housing crash in out-of-state markets could affect demand here.

If that happens, some of the condo projects being touted won't make it out of the planning stage.

Stoneleigh project

Speaking of high-rise condos, the developers of the Stoneleigh Residences, a $60 million project adjacent to the historic Stoneleigh Hotel, have hired McCarthy Building Cos. as general contractor for the project. McCarthy is also building the new W Dallas Victory Hotel and Residences.

McCarthy subsidiary Residential Constructors LLC is scheduled to start work on the building in the first quarter of 2006.

Developers Prescott Realty Group and Apollo Real Estate Advisors LLC plan to have the 97-unit condo tower, plus a remodeling of the hotel, done by late 2007.

B&N off to the mall

Barnes & Noble is joining the tenant lineup at the new Prestonwood Town Center shopping mall under construction at Montfort and Belt Line roads.

The bookseller has announced it will build a new store in the shopping complex, and then close its store at 14999 Preston Road.

Wal-Mart is also opening a store in the center.

Big business in Big Easy

There are signs that the storm-battered city of New Orleans is returning to life.

The Dallas office of Jones Lang LaSalle recently completed the sale of Causeway Plaza, a 336,599-square-foot office building in the New Orleans suburb of Metairie.

The sale of the 90 percent leased building to the Feil Organization of New York was arranged by Evan Stone and Linda Simpson on behalf of an institutional investor.

"While the company invests nationally, its willingness to further commit to the Gulf Coast is testament to their belief in the resiliency of the market and bright future for New Orleans and the surrounding communities," Mr. Stone said.

In a bigger coup for the Crescent City, the National Association of Realtors has announced that it will hold its annual convention in New Orleans next November.

The Realtors considered moving the show – which attracts more than 20,000 visitors – but after research decided to stick with New Orleans.

Note ...

Robert Lynn Co., a Dallas real estate service firm that has been in business since 1962, has joined NAI Global. The New Jersey-based firm is an international network of independently owned real estate brokers with 300 offices.