Dallas market 'undervalued'

This time, being on the low end of a survey probably isn't so bad
12:00 AM CDT on Friday, June 16, 2006
Dallas has more to brag about than its basketball team.

A new survey finds that Big D has the most undervalued housing of any big-city market in the country. That's right – the best buy in the nation.

Normally, it wouldn't be bragging material to have "undervalued" real estate.

But with the buzz about cooling residential prices in many cities, it's good news that Dallas doesn't have a housing bubble hanging overhead.

Indeed, homes in the Dallas area were almost 19 percent undervalued in the first quarter, according to an analysis by financial firms Global Insight and National City Corp.

Compare that with Naples, Fla., where the median home price was more than 100 percent overvalued. Or Salinas, Calif., which was 79 percent overvalued in the first quarter.

"Seventy-one metro areas, accounting for 39 percent of all single-family housing value, were deemed to be extremely overvalued," the housing sector report warns. Most of those hot markets are in Florida and California.

But there are signs that a correction is in the works. "Quarter-to-quarter price appreciation is slowing in most metro areas and is nearly flat in San Diego and Boston," the analysts said.

The cities at the top of the "undervalued" column have something in common – they are all in Texas. Bryan-College Station has the biggest spread – almost 24 percent undervalued. Next comes Dallas, and then Fort Worth with 18.5 percent undervalue in median prices.

The study also points out that the Dallas area lost more than 18 percent of its housing value during the "correction" of 1986 through 1989. Only someone who wasn't here for the regional economic collapse of the late 1980s would refer to it as a "correction."

Texas homeowners who watched their real estate values evaporate would have more colorful descriptions of that real estate crash.

No doubt the folks in Florida and California will have something to say about home values before the current "correction" is over.

Senior corner

Development is about to kick off on a high-profile North Dallas corner.

Dallas real estate executive Eric Beichler has teamed up with Southwest Housing Development to build a 154-unit seniors community at the southwest corner of North Central Expressway and Northaven Road.

The luxury rental buildings will range from two to four stories and will be constructed around three courtyards and a parking garage. Other features include a cafe, spa, library, media room and other facilities.

Beeler Guest Owens Architects designed the building, which will be constructed of stone, brick and stucco.

Construction on the $20 million building – called Northaven – should be finished in early 2008. Rents in the building are expected to average $1,420 per month.

Mr. Beichler is managing partner of commercial realty firm Mohr Partners and a principal in Libby Field Investments LLC.

Highland moving

Highland Homes is heading north.

The award-winning Dallas homebuilder is trading its longtime office near LBJ Freeway for new digs in West Plano's Legacy business park.

Highland has leased about 30,000 square feet in developer Myers & Crow Co.'s Parkwood Place office complex on Tennyson Parkway. The builder is taking the top floor of the first building.

The lease was negotiated by Jim Lob and Dolores Wood with Trammell Crow Co.

New Zealand theme

Apartment developer Legacy Partners said Thursday that it has purchased a 15.3-acre site at Coit Road and State Highway 121 for its next project.

Work will begin immediately on the Kiora Park Apartments, which will open next summer, according to Spencer Stuart Jr., senior vice president and partner at Legacy's Dallas office. The 250-unit project will have a "New Zealand" theme, the developers say.

Legacy is building the project in partnership with General Electric Capital Corp., and Guaranty Bank is providing the financing. Charles McCallum Jr. of McCallum Properties brokered the sale of the land.

California-based Legacy is also building an apartment and retail complex in Richardson's Telecom Corridor.

On Horizon

Developer Opus West Corp. has finished construction on a Lewisville headquarters for Horizon Health Corp.

The 80,000-square-foot office complex on Lake Vista Drive has been under construction for seven months.

More than 200 Horizon employees will be located in the building, which was designed by architect BOKA Powell.

Promotion

CB Richard Ellis said Thursday that it has promoted Joe Wallace to co-manager of its Dallas office. He will join Rich Pogue in overseeing the office, which has more than 191 members.

Mr. Wallace came to CB Richard Ellis as senior managing director in May 2005. Before joining the real estate services firm, he was founder of Highland Advisors LLC.