Foreclosures cut wide swath across Dallas, Fort Worth

As thousands lose their homes, some neighborhoods are hit hard

08:25 AM CST on Friday, February 29, 2008

By STEVE BROWN / The Dallas Morning News

On weekends, Coppell real estate agent Tess Langevin loads up a bus full of potential homebuyers and heads out to look at foreclosed properties.

Ms. Langevin has plenty of homes to show.

There were more than 19,000 residential foreclosures in the Dallas-Fort Worth area last year. And thousands more houses are falling into default every month.

A study by The Dallas Morning News finds that the home foreclosure crisis cuts across all neighborhoods and economic classes in North Texas.

Lenders are understandably eager to get these houses sold before another batch hits their desk.

And the number of potential buyers for these properties is so strong, Ms. Langevin said, she is full up on her tours.

"We bought a 22-passenger bus and are full," she said. "We may have to rent another bus to follow behind us."

She's also expanding to other areas. Last week, the foreclosure bus went to Carrollton and Lewisville, where home shoppers toured about eight properties.

"We are checking out North Dallas right now," Ms. Langevin said. "There are incredible properties there."

A close look at last year's foreclosures reveals that the housing market troubles stretch from the most affluent in-town residential districts to the far suburbs.

"It's in all areas of town and across all racial boundaries – it's very scary," said Bonnie Mathias of Texas ACORN, the Association of Community Organizations for Reform Now.

ACORN is working with lenders and borrowers to try to keep people in their homes and avoid foreclosures.

The negative impact on neighborhoods is high, she said, if homes wind up being taken by the mortgage company.

Property values

"We end up with vacant houses in our neighborhood," Ms. Mathias said, "and that's bringing down our property values."

Foreclosures in a neighborhood depress the value of surrounding houses and bring more crime.

Each individual foreclosure in a neighborhood reduces the value of surrounding houses by about 1 percent, according to research by the Fannie Mae Foundation. In areas where there are many foreclosures, the cumulative impact can be significant.

Other national forecasts predict that average home values will drop $5,000 in areas with foreclosures.

Each time foreclosures rise 1 percent, crime rises 2.33 percent in the neighborhood, according to a study by the Georgia Institute of Technology and Chicago's Woodstock Institute.

Ms. Mathias said vandalism of empty foreclosed homes by copper thieves and squatters is a problem in some North Texas neighborhoods.

"The lenders have to be held responsible to keep the properties in repair and secured," she said. "They can't just let it sit."

Obviously, some neighborhoods have been harder hit by the mortgage sector meltdown.

Based on last year's foreclosures, the eastern and southern sectors of Dallas County have seen the largest numbers of lender sales.

But there were also big pockets of foreclosures in fast-growing northern suburbs including McKinney, Keller and Frisco, according to Addison-based Foreclosure Listing Service.

DeSoto hit worst

The worst area for foreclosures last year was ZIP code 75115 in DeSoto, which had more than 600 houses taken by lenders.

A U.S. Senate study found that Texas will probably lose almost $2.7 billion in property value due to subprime mortgage defaults.

Subprime loans make up less than 15 percent of the local mortgages, but they account for more than 50 percent of foreclosures.

And the Dallas-Fort Worth area is projected to take a $4 billion hit to its overall economy because of home foreclosures, predicts a recent report commissioned by U.S. Conference of Mayors.

Longtime Dallas real estate appraiser Jack Towers is already seeing the results of home foreclosures as he studies local property values.

"Most of the foreclosures I am seeing are in newer tract home neighborhoods," Mr. Towers said. "But it's going to impact everyone one way or another."

Tougher loan standards and falling property values have also made it harder for borrowers who are in trouble to arrange new financing, he said.

"And if they can't refinance, they are stuck," he said. "We are seeing a lot of people just walk away from their homes."

Mr. Towers said the scope of the home crisis has him worried.

"I've been though a couple of these things, and I don't like this one at all," he said.

Tax appraisals

One area that won't feel an immediate impact from local foreclosures is property tax valuations. That's because tax appraisals often don't include comparisons of foreclosed home sales prices in their value estimates.

"A foreclosure by its very definition is a forced sale, so you can't really use that as an indication of the market," said Dallas real estate appraiser Chuck Dannis. "But if foreclosures are pervasive in the marketplace, then that becomes the market."

Eventually, tax appraisers will be forced include the data, he said.

"We are in unprecedented times with regards to this," Mr. Dannis said. "I would guess they are struggling."

In some neighborhoods, the majority of home sales are already foreclosures.

"For example, I have just prepared an inspection of a property in Cedar Hill for today and two of the three comparables are foreclosures," Mr. Towers said.

He said lenders are requiring that private appraisers include foreclosure resales when they value a property for mortgages.

"Yes, foreclosures are negatively impacting the market in many neighborhoods of this Dallas-Fort Worth market and by all indications will continue until the oversupply situation gets back in balance," Mr. Towers said.

That will take awhile.

In 2007, about 42,000 preowned houses were listed for sale in D-FW. More than 19,000 were foreclosure homes.

Real estate agents are seeing some steep discounts from lenders.

"We had one house on our last bus tour that was a $180,000 savings from the average in the neighborhood," Ms. Langevin said.

"Another was $65,000 off the comps."

If the weekly bus tours result in just one sale, she says, that will pay the cost.

"We are trying to stay alive as Realtors, get the economy going and get these houses sold," she said.WHERE TO LOOK

If you want to buy a foreclosed home:

•Contact your local real estate agent to find deals in your neighborhood.

•Dallas auctioneer Hudson & Marshall is selling more than 130 foreclosed homes on March 9 at the Embassy Suites DFW Airport North.

•Internet sales site RealtyTrac.com lists foreclosed houses on the market all across the country.

•Look for government-owned HUD homes at www.hud.gov/homes/homes forsale.cfm.

SOURCE: Dallas Morning News research

Divide between rich, poor grows in Dallas-area housing market

Home prices rise in higher-end areas, decline elsewhere

01:59 PM CST on Friday, January 18, 2008

By STEVE BROWN / The Dallas Morning News

The mortgage market meltdown and rising foreclosure rates have widened the divide between rich and poor in the North Texas housing market.

And higher commuting costs are also coming into play.

Neighborhoods with large numbers of expensive homes and low foreclosure rates for the most part saw increases in home prices in 2007, an analysis of year-end housing data shows.

But many residential districts dominated by low- and moderate-priced housing and high foreclosures suffered price declines.

That dichotomy makes sense to housing analysts and sales agents, who have watched the market split as the availability of mortgages for first-time buyers has been sharply limited.

At the same time, more affluent buyers have taken advantage of the lull in the housing market to make purchases.

"We continue to see appreciation and strong demand, especially inside LBJ [Freeway]," said Frank Hayward with Re/Max Preston Road Realtors. "I believe this has been fueled by the dramatic increase in gasoline prices."

Mr. Hayward said that suburban low- and moderate-income neighborhoods are feeling most of the pressure.

"These homeowners, of course, have less equity to absorb price declines and strong competition, especially from the foreclosures currently on the market," he said.

Most of the neighborhoods that saw median home sales price declines in 2007 are in the southern and far eastern sections of the Dallas area.

The biggest price gains were in North Dallas, up 18 percent in 2007 from 2006, and the Park Cities, up 13 percent.

The most expensive homes – those costing $1 million and up – sold well in 2007, with a 16 percent increase areawide, according to statistics from the North Texas Real Estate Information Systems.

"Of course, where are the higher-price-range homes located? North Dallas and the Park Cities," said Barry Hoffer, a real estate agent with Ebby Halliday Realtors. "Homes in the outlying suburbs seem to be affected the most.

"The longer commute times and ongoing $3-plus gas prices are having an impact on a buyer's decision to live that far out."

Average home values in a neighborhood also play a bigger part in the number of sales. Regardless of where homes are, sales of moderate- and low-priced houses are down in Dallas-Fort Worth, statistics show.

Dallas housing analyst Ted Wilson with Residential Strategies said "the entry-level market has been the hardest hit."

"The unfortunate consequence of the fallout from the subprime debacle is that households with weak or bruised credit and those without a reasonable down payment are finding it harder to qualify for a new home loan," Mr. Wilson said.

No doubt that contributed to an overall 8 percent decline in preowned home sales in North Texas last year.

Sales dropped in all but five of the markets The Dallas Morning News tracks quarterly.

Real estate agents and housing economists are anxiously waiting to see if the traditional spring home sales market takes off.

"The early part of the 'sales season' in March and April will tell us a lot more about how 2008 is going to unwind," said Dr. James Gaines, an economist with Texas A&M University's Real Estate Center.

"We're projecting at least another 5 percent to 10 percent decline in sales volume this year from 2007 across the state," he said.

"And the trends to date suggest that the metroplex area could be one of the hardest-hit areas in terms of percentage decline."

Government plan could restore confidence locally

BY JOHN-LAURENT TRONCHE
December 24, 2007

The subprime mortgage crisis largely has avoided Dallas-Fort Worth, but residents might still reap the benefits of nationwide efforts to repair the damage.

President George W. Bush’s plans to stabilize the housing market, announced Dec. 7, along with Federal Housing Authority reforms in the Congressional pipeline, are steps in the right direction toward helping homeowners who may be facing steep payments or possible foreclosure, local and national analysts said.

Those efforts should restore confidence in the housing market, even in the Metroplex, where the reality of minimal foreclosures has been overshadowed by “a barrage of negative news” about tumbling home values, said Ted Wilson, a partner at Residential Strategies, a Texas-based real estate research firm.

“Our market is in much better shape than the rest of the country,” Wilson said.

“The reality is that Texas only saw modest increase in housing prices during the first part of this decade so we didn’t really have the inflation issues,” he said. “The majority of what we saw was mortgages that were focused on households that had weak credit scores – where our foreclosures are coming from.”

As previously reported, the Dallas-Fort Worth area has experienced a 7 percent drop in units sold from last year for the January to October period, according to the North Texas Real Estate Information System; the organization’s CEO said that drop is result of the cyclical nature of real estate, and not a housing slump.

Despite the reported stability of the local market, foreclosures are up nationwide; California-based foreclosure tracking company RealtyTrac reported Wednesday a 68 percent increase in foreclosure filings from November 2006.

The White House-endorsed HOPE NOW initiative could assist up to 1.2 million homeowners by helping “subprime borrowers who can at least afford the current, starter rate on a subprime loan, but will not be able to make the higher payments once the interest rate goes up,” according to a statement. Borrowers would be helped by one of three measures: refinancing an existing loan into a new private mortgage, moving subprime

borrowers into an FHASecure loan or freezing subprime borrowers current interest rates for five years.

The plan is a “small step in the right direction,” but more will need to be done to work out the problems in the housing market, said David Hamermesh, a senior analyst in the consumer lending service at TowerGroup, a Massachusetts-based research and advisory firm focused on the global financial services industry.

“My impression of the moves is that the Bush rate-freeze plan is a very limited in scope of its impact,” Hamermesh said. “It only benefits a very narrowly defined set of borrowers.”

However small of a step the plan may be, many agree the initiative will help spark repairs in consumer confidence.

“It will help a limited number of people,” said Mary Trupo, a spokesperson at the National Association of Realtors, “but it sends a good sign to the market that the administration and Congress know there is a problem and things need to happen.”

The Dec. 7 plan is essentially helping homeowners by asking “who can actually stay in the house by getting a rate freeze?” Hamermesh said.

“I give the administration credit for coming up with a solution that does help some people without throwing away money,” Hamermesh said, “without taking government money and throwing it at people who can’t even afford their houses now.”

Local homeowners, potential homebuyers and the Dallas-Fort Worth housing market should benefit from the government’s involvement, even though Wilson said the plan “won’t have as dramatic of an effect in the our market as it might in other markets,” such as California and Florida.

“Anything you can do to assist the consumer is a good thing,” Wilson said, adding “we think a lot of the issues will be cleaned up by the end of the spring or beginning of summer.”

N. Texas housing market expected to do better than nation

10:55 AM CST on Monday, November 26, 2007

By STEVE BROWN / The Dallas Morning News

Confused about where the local housing market is going?

Well, don't look to the economists and research analysts for help.

Most respected housing forecasters agree that the Dallas-Fort Worth area will fare better than rest of the country when it comes to home sales and pricing.

But getting any two economists to agree about anything is tougher than getting a no-down-payment loan.

Here's what the top prognosticators are saying about the North Texas home market.
Moody's Economy.com

What home price decline?

Moody's Economy.com predicts that Dallas-area home prices will go up about 3 percent a year over the next couple of years.

At the same time, it expects double-digit price declines in other cities – especially in California and Florida.

Moody's thinks nationwide home prices will fall by almost 8 percent by the time the current housing downturn bottoms.
PMI Group

No worries for North Texas

The folks who insure mortgages should have an idea where home prices are heading. And PMI Group – one of the country's largest mortgage insurance firms – isn't worried about home prices here.

The California firm estimates that D-FW home prices have less than a 10 percent chance of falling during the next two years.

Case-Shiller Home Price Index

Dallas stands out

The Dallas area was a standout in Standard & Poor's latest Case-Shiller home price index.

Case-Shiller said in a report last month that Dallas home prices were up just 0.5 percent over last year. But that sure beats the national decline, which was 4.4 percent – the biggest such dip on record.

Office of Federal Housing Enterprise Oversight

Even rosier predictions

The federal agency that tracks loans purchased by the country's top mortgage firms – Fannie Mae and Freddie Mac – found that home prices in the Dallas area are still gaining ground.

The latest report found that prices in the Dallas area were up about 5 percent at midyear compared with the same period of 2006.
By the numbers

You decide

North Texas' preowned home sales are down about 7 percent this year.

Nationwide in September, preowned home sales were down by 19.1 percent from a year earlier. For the year, the National Association of Realtors is forecasting a 13 percent sales decline.

The bigger difference between D-FW and the U.S. is in prices.

The latest national report showed that Dallas-Fort Worth had a 3 percent home price decline in the third quarter compared with a year earlier. That's in conflict with local statistics – the local Realtors' group says prices were up 1 percent. It's also a reversal of the National Association of Realtors' midyear report, which said D-FW prices were up 2 percent.

The inventory of homes for sale here is also lower than the national average.
The national outlook

All over the map

Most economists agree that Texas will fare much better than other parts of the country – especially some coastal markets.

"I believe the Texas economy and housing market will be doing relatively well compared to the U.S. totals," said David Seiders, chief economist for the National Association of Home Builders.

What they can't agree on is how long the national slump will last. Here are two extremes.
North Texas*
Preowned home sales 74,918 {TriDown} -7%
Preowned home prices $150,000 {TriUp} 1%
Inventory 6.4 months
New home starts 25,632 {TriDown} -33%
*Year to date through October
U.S.
Preowned home sales 5.04 million* {TriDown} -19.1%
Preowned home prices $211,700 {TriDown} -4.2%
Inventory 10.5 months
New home starts 884,000* {TriDown} -25%
*Annualized, as of Oct. 1

STACKING UP HOME PRICES
Annual change in home prices through first half of 2007:
City Change
Atlanta {TriUp} 3.84%
Boston {TriDown} 1.78%
Chicago {TriUp} 3.69%
Dallas {TriUp} 5.01%
Detroit {TriDown} 3.31%
Fort Worth {TriUp} 3.57%
Houston {TriUp} 5.66%
Las Vegas {TriDown} 0.87%
Los Angeles {TriUp} 2.06%
Miami {TriUp} 7.47%
New York {TriUp} 2.72%
Phoenix {TriUp} 1.57%
San Francisco {TriDown} 0.86%
Seattle {TriUp} 9.89%
SOURCE: Office of Federal Housing Enterprise Oversight

BIGGEST DECLINES
Moody's Economy.com expects the Dallas area to gain about 3 percent in home prices over the next two years while most other U.S. cities see declines:
1. Stockton, Calif. {TriDown} 25%
2. Palm Bay, Fla. {TriDown} 24.9%
3. Sarasota, Fla. {TriDown} 24.8%
4. Reno, Nev. {TriDown} 22.4%
5. Modesto, Calif. {TriDown} 22.3%
SOURCE: Moody's Economy.com
HOW RISKY IS YOUR HOUSING MARKET?
Markets with the least risk of a home price decline, based on price appreciation, economic growth and affordability. An index of 100 means there is a 10 percent chance of home prices falling in the next two years
Least risky
Pittsburgh 85
Fort Worth-Arlington 89
Houston-Sugar Land-Baytown 94
Dallas-Plano-Irving 95
Indianapolis-Carmel 101
SOURCE: PMI Group

WHO'S AHEAD OF LAST YEAR?
Atlanta {TriUp} 0.8%
Charlotte {TriUp} 5.6%
Dallas {TriUp} 0.5%
Portland {TriUp} 2.8%
Seattle {TriUp} 5.7%
SOURCE: Standard & Poor's

Swing in the market is hardest on area construction workers

BY ELIZABETH BASSETT
October 15, 2007

This summer, it seemed that all news about the housing market was negative.

Now, the downturn from the sub prime lending crisis is affecting other industries as well. Despite the sometimes worrying numbers, experts say that most industries affiliated with the housing industry will correct themselves soon.

For the past several years, lending companies were offering nontraditional financing to people who wanted to buy homes. By loaning money to people with sometimes doubtful credit history, finance companies put themselves into a sticky situation and lenders couldn’t make mortgage payments as they went up.

Over the summer, the U.S. Labor Department reported that an estimated 4,000 jobs were lost from July to August, most of them coming from industries connected to the housing market, like manufacturing and construction. The decline was the first monthly decline reported in four years.

At the beginning of October, however, the Labor Department report was revised upward with a gain of 89,000 jobs.

In more than 29 counties in North Texas, about 6,000 existing homes were sold in September compared with more than 7,400 during the same month in 2006, according to a report from the Texas A&M University’s Real Estate Center and the North Texas Real Estate Information System.

Walter Molony, senior public affairs associate for the National Association of Realtors, said that while the business climate is bad for some, others are benefiting. For example, it is the fifth highest year on record for existing-home sales, although down to about 5.78 million homes sold from last year’s 6.48 million.

“People know it’s cyclical,” Molony said of the real estate business.

Sales of houses will self correct, Molony said, but correction is harder for the building industry because it is not as far removed from the manufacturing of homes.

“Builders can’t adjust as quickly to changes in the market,” he said. “It’s like steering a huge ship – you can’t change direction very quickly.”

A hold on building

Ted Wilson, a partner with Residential Strategies, based in Dallas, said that the number of homes being built this year is expected to be around 30,000, as opposed to a high of more than 50,000 in 2006.

“For the Dallas/Fort Worth market, the builders had really been aggressive with the starts and closings,” he said.

As the subprime bubble burst, lending institutions tightened restrictions on loans, including those to builders, Wilson said. As a result, builders have to sell their already built homes or spec homes before they get the financing to build more, he said.

“Obviously, when you look throughout the market, contractors, subcontractors – they’re all feeling the pinch as well,” Wilson said.

Billy McCarty, who owns Jewel Custom Homes Inc. in Fort Worth, said that usually he designs and sells 10 to 12 custom homes per year. This year, he said, he has yet to sell one.

“Around the first of the year, everything just started shutting down,” he said.

Financing is a problem, McCarty said: Like some potential home buyers, builders are finding it more difficult to borrow money. With two spec homes on the ground, McCarty said he has to sell one before he can get the financing to start another.

“As I talk to my subcontractors that I’ve had for years, they’re telling me that the other builders they talk to, it’s about the same,” he said.

McCarty said one blessing is that he takes care of all the planning for Jewel Custom Homes, so he didn’t have to lay off any employees, unlike some larger builders. D.R. Horton, for example, the nation’s largest homebuilder, laid off 3,300 employees this year.

Steve Staley, who owns A+ Staley Moving in Burleson, said that his moving company has been affected by the cautious attitudes the housing market has prompted.

“It was slower this summer than usual,” he said. “We could tell a

difference.”

Summer is usually the busiest time for helping people move to a new home, he said.

“Any time homebuying is down, the moving companies go down,” Staley said.

Advantages for buyers

Despite the downturns, there are some advantages to be found from the subprime bust.

McCarty said that because builders have to sell their spec homes in order to build again, homebuyers can find newly-built new homes at deeply discounted prices.

Additionally, since many homeowners are finding they are having a tough time making mortgage payments or facing foreclosure, pre-owned homes are also being sold at bargain prices, McCarty said.

Wilson said that many people may be afraid of entering the housing market at all because they don’t understand that there are bargains to be found.

“As soon as the deals are gone, they’re gone,” he said.

The National Association of Realtors has seen an uptick in membership this year as about 12,000 people join to take advantage of benefits like ways to continue education and diversify their business, Molony said.

By next spring, the housing market and other industries will be well on the way toward self-correction, Molony said.

Even with stabilization, Wilson said, the construction industry is going to be changed by 2007 and the market’s downturn.

“The reality is it's not going to back up to levels we saw before,” Wilson said.

Dallas & Fort Worth Real Estate Investment Markets Silver Lining

"With all the doomsday news about the housing industry and the mortgage industry surely the sky must be falling", says Chicken Little! I will not dispute the fact that the housing industry is in turmoil and the mortgage industry is tanking... these are indisputable facts. The propblem though with the average news report is that they do not go far enough to see the silver lining! For those daring few that seek real estate investment as a way to create financial freedom in thier lives then I believe they can see more than just a little silver come their way!
We are all taught that when the market is down we buy and when the market is up we sell! We are hearing the news - The market is down! SO BUY, BUY, BUY!!!
For the real estate investor there have been few times in recent history that have been better than this. I caution you to still be careful as you go bravely into that dark night. You need to surround yourself with professionals that can help you navigate through the murky waters of foreclosures, distressedhousing and builder blowouts! People will take advantage at every corner so buyer beware!
The bottom line is this -
The Fort Worth Housing Authority just opened up their waiting list of people who want to be on section 8 and their are now more people than houses.
The Dallas Housing Authority is in the same shape.
Their was recently an article in the Dallas Morning News that asked the question "Where are they all going to live?" 30,000 units short of affordable housing with more people moving in all the time.
Now is a great time to look at investment opportunities in the Dallas/Fort Worth Area. If you need help navigating give me a call I would be glad to help.

Is Dallas losing its livability?

Cost of living grows with city

By DAVID TARRANT / The Dallas Morning News
and DAVID DILLON / Special Contributor

First of two parts

As she considers where to live in Dallas, Lisa Paine looks at the surge in high-end homes and condos that is remaking many neighborhoods.

"Who can afford all those high-priced condos?" she asks.

Amid an upscale housing boom, the city faces a shortage of quality, affordable housing for folks like Ms. Paine, an insurance company customer service agent. The North Dallas apartment complex where she lives will be torn down and replaced by a retail development.

Some residents see apartments as one of the city's biggest problems, but many experts say such apartment complexes and affordable single-family homes are critical to the city's economic vitality and quality of life.

Dallas already lacks at least 30,000 units of affordable housing, according to a mayor's task force. That increases housing-cost pressures on families. In 2005, 42 percent of the city's households were "cost-burdened," paying more than 30 percent of their gross income on rent or mortgage expenses. That was up from a third of households in 2002, according to an analysis by the research arm of Dallas' Foundation for Community Empowerment.

The problem will intensify as newcomers pour into the region. In the next 30 years, North Texas can expect to grow by 3.5 million residents.

About 500,000 are headed to Dallas, including a substantial number of young people and immigrants. That's equal to 220,000 new households, about the size of Plano and Garland combined.

Nearly half of the households will need housing assistance – either in the form of direct subsidies or city programs that create more affordable housing. "They're coming," said Theresa O'Donnell, Dallas' development director, referring to new residents. "Either we stick our heads in the sand, or we find a way to provide for them."

The lack of affordable housing is not just affecting the very poor. It is also having an impact on middle-income households – those making between $53,000 and $80,000 annually in the Dallas area.

"Firefighters, nurses, police officers, teachers, health care workers and other middle-income earners are increasingly finding it difficult to live in the communities where they work," said a Federal Reserve Bank of Dallas report. The term "workforce housing" is often used to define housing that is affordable to such occupations that are a critical need in any community.

Patricia Saldaña, a registered nurse at Baylor University Medical Center at Dallas, would be priced out of her neighborhood near Belmont and North Henderson avenues in East Dallas if she were looking to buy there today. More and more, the small homes are being torn down and replaced with larger homes priced in the $300,000 to $400,000 range.

She bought her home 10 years ago for about $50,000. Now it's valued well over $200,000. "I couldn't afford it today," said Ms. Saldaña, a widow with a 3-year-old son. She has only a five-minute commute to work, which allows her more flexibility and family time. That's not the case for a lot of her colleagues. "We have a lot of nurses that live an hour away."

When rent or mortgage costs exceed 30 percent of a household's gross income, it begins to affect the family's ability to pay for food, health care, clothing, education and transportation. A shortage of affordable housing also hurts the vitality of a city as a whole. Commuting from lower-cost homes outside the city adds to pollution and traffic congestion, and contributes to employee absenteeism and turnover.

"If we don't build affordable housing, we're going to lose our employee base," said Don Williams, chairman of the Foundation for Community Empowerment, a nonprofit focused on development of the city's southern sector. "It's in the interest of Dallas to recruit and retain employers by providing affordable housing close to the workplace."

The idea of workforce housing "assumes that businesses need a workforce close by," said Betsy Julian, a Dallas lawyer and director of the nonprofit Inclusive Communities Project. "This is an issue of family values, how much time people spend with their families. People want to get close to a place where they can live and work – where there's not a huge mismatch between where they work and live."

Since the late '90s, more than 1,500 Dallas homes have been torn down and replaced, including many in East and North Dallas, according to city records. Whole blocks in East Dallas have been leveled – with affordable homes and apartments replaced by upscale townhomes and so-called "McMansions."

The median sales price for single-family homes in Dallas for the first four months of 2007 was $159,000. With property taxes and homeowners insurance, the monthly mortgage on such a home would be about $1,400. That's typically beyond the means of middle-income workers and their families.

Part of the problem is that incomes are not keeping up with home values. Between 1990 and 2005, median home values in Dallas rose 55 percent, but the median household income increased just 32 percent.

The situation is particularly grim for renters. More than 55,000 Dallas renter households (22 percent of all renter households) paid more than 50 percent of their monthly gross income for housing costs in 2000, according to a University of Texas at Austin study.

Though renters make up the majority of Dallas residents, their choices of where to live are narrowing fast. Thousands of apartments from North Dallas to Oak Lawn and Old East Dallas are being torn down and replaced by upscale housing units. Mayoral candidate Ed Oakley is even running on a teardown platform, vowing to take back the city from "crime-ridden apartments."

For Ms. Paine, the crime is that Dallas seems to be turning its back on people like her. Ms. Paine and other residents of Timbercreek's 1,000 apartments – including many working-class families – face eviction after the City Council voted to rezone the area for a 450,000-square-foot Trammel Crow development.

For the past 14 years, Ms. Paine has lived in a $455-per-month apartment near Northwest Highway and Skillman Street. The apartment is not just affordable – it has been a joy. Her balcony overlooks a creek and green space filled with hundred-year-old trees. Mornings she enjoys a cup of coffee while listening to blue jays and woodpeckers, and evenings she walks down to the water to feed the ducks. She expects to get her eviction notice in July. "Nobody gets the view that I have for that money," she said.

Ms. Paine, 46, says she can't find anything affordable near her job in Frisco. She doesn't know where she'll go next, but wherever it is, she knows she'll have competition. "To dump 2,000 people in that market – that's a lot of people looking for a place to live."

One of Ms. Paine's neighbors, Tracey Villegas, is a single mother who works as a bank clerk in Plano. She likes her one-bedroom apartment at Timbercreek, because it's close to major shopping centers, freeways and a new elementary school. "My family is nearby, my job is not too far away and I'm in the middle of everything here," Ms. Villegas said.

Another neighbor, Cindy Hall, 51, who is disabled, likes being close to bus routes and DART. "If you live on Social Security, you can't afford a car," said Ms. Hall, who has lived at Timbercreek for two years. "I'd like to find something around here, but I don't know."
Competitive edge

The city has always prided itself as attractive to business. But shortages in affordable housing make it harder for companies to attract workers, causing cities to lose their competitive edge.

"Employers need access to a diverse base of employees, where you do have a mix of people and a creative environment," said Lyssa Jenkens, chief economist at the Greater Dallas Chamber. Cities have to be "competitive from an employer's point of view and attractive from a resident's point of view. We need a full complement of workers and families to be a vibrant, interesting and attractive area."

When businesses look to invest in a place, "they look for workforce housing," said John Fregonese, the urban planner who wrote the city's new comprehensive plan, Forward Dallas. "Especially in Texas, it's labor that drives new business. The best thing you can do is invest in education, housing and cool neighborhoods."

Stu Jackson, human resources manager for Schepps Dairy, says a workforce that lives nearby helps with employee retention. "If we ran a ZIP code analysis, we'd find that probably 75 percent of our employees live within 12 miles of the dairy," which has been in near Fair Park for more than 50 years.

The ideal is to have affordable housing dispersed all over the city. But opposition to affordable housing initiatives rises in more affluent sectors of the city. Neighborhood groups see it as a destabilizing force that depresses property values. Developers see it as an indirect tax on them and unwarranted tampering with the free market. Politicians would just as soon avoid controversial legal and policy issues that could cost them votes.

"I think we can work that out if we really want to. But the history of Dallas is putting the public housing and affordable housing in one area," said Ann Lott, president and chief executive officer of the Dallas Housing Authority. "It's going to be hard to break that pattern. You have to fight the neighborhood organizations, and you also have to make inroads at City Council. The council was elected by people who don't want affordable housing. Everybody says we need it, but it's hard to get people to do it."
Sense of urgency

Dallas is relatively affordable compared to with other major metropolitan areas on the East and West coasts. But it can't afford to neglect the issue much longer, said Ms. Jenkens, the Dallas Chamber's economist.

"We're in a period of tremendous growth," she said, noting that the region added 180,000 new residents last year – a pace of 500 newcomers a day. "So we're going to see tremendous pressure on our land values in a way we're not accustomed to seeing."

Historically, Dallas has mostly taken a "hands-off" approach to affordable housing – letting the market deal with the issue. "Political willpower at the top, political leadership here – for the most part, it's been uninterested," Mr. Williams said. "The sense has always been [that] the free market will take care of it."

That began to change in 2002, when Mayor Laura Miller appointed the Task Force on Affordable Housing. The task force reported that moderately- priced housing stock was vanishing and low- and moderate-income families were being squeezed into a few declining neighborhoods with deteriorating housing and few jobs.

Jerry Killingsworth, a former banker, took over the housing department in 2002. The successful 2006 bond package included $42 million to spur economic development and affordable housing in the city's southern sector. But the mayor placed a moratorium on the use of federal tax credits for affordable multifamily housing until an FBI investigation is complete.

Key policy changes, adopted by dozens of other cities nationwide, have not been put into action here.

A 2006 affordable housing report card from the University of Texas gave the city Cs and Ds on six key measures, including leadership, production and public outreach. "Dallas has not made the city's housing needs a priority. Lack of commitment has undermined the resources needed to confront housing problems," the report stated. "Thus, in a high-growth city, housing resources are declining and production is limited."

Dallas also can't continue to rely on the federal government, either, which has been cutting back funds for housing and economic development. "They've been cut every year for the last three years, and we don't expect to see increases anytime soon," Mr. Killingsworth said. "We'll just have to look for other sources of funds to make up the difference. The money the feds provide, if it's all you rely on, is just a drop in the bucket relative to the need."

Said Mr. Williams said: "The debate in Dallas has to shift from 'We don't do subsidies,' to 'We will make investments that will pay dividends,'" he said. Unwilling to wait on the city, a group of 30 business and community leaders are is pushing for big changes to help stimulate affordable housing and economic development.

One proposal from Mr. Williams' foundation calls for investing $100 million, raised from federal, state and municipal governments, commercial lenders, foundations and other nonprofits, for new affordable workforce housing. The funds would target the southern sector.

Mr. Killingsworth said it was too early to comment on the foundation's proposal. Nearly all of the city's housing funds – more than 90 percent – come from the federal government, and it's insufficient to meet the city's needs, he said.

Public investment can help leverage new housing and economic development, particularly in the southern sector, where historically it has been notoriously hard to attract private developers, Mr. Killingsworth said.

"If we put a $100 million in, you would hope at a minimum to get $1 billion" in new development, he said.
Political will needed

It's a slippery term that gets tossed around loosely. But experts agree that without strong political will, the affordable housing problem will continue to fester.

"The construction costs [for affordable housing] are so high that the private sector cannot do the job by itself," said Eleanor White, president of Housing Partners, a Watertown, Mass., consulting firm specializing in affordable housing.

Cities with successful affordable housing programs share certain principles, including strong City Hall advocacy, significant public funding, in-house expertise and creative partnerships with neighborhood groups and developers.

Specifically, this means:

• Having a strong City Hall voice for affordable housing. In 2001, Boston Mayor Thomas Menino launched a citywide housing initiative to create 17,500 new units by this month. So far, the program has produced approximately 16,500 units, of which 4,500 (27 percent) are affordable.

Under Denver Mayor John Hickenlooper, the city's downtown is experiencing a housing boom that includes a full spectrum of affordable and market-rate residences. He calls affordable housing a “truth of city life” and speaks persuasively about its connection to healthy, thriving communities.

• Putting your money where your mouth is. Austin just passed a $55 million affordable housing bond issue. Phoenix has passed three smaller affordable housing bond packages in recent years. In Dallas, most affordable housing funds come from the federal government; local funding is minimal. Bond money has been spent on improvements to infrastructure and for land acquisition and not directly for the building of affordable homes.

Putting clear, coherent programs and policies in place at City Hall, so that builders and developers can get the help and expertise they need to do affordable housing.

Neal Sleeper, the master developer for the Cityplace area, said there needs to be more collaboration between the private and public sectors to do affordable housing. "These are very specialized projects, first to know how to finance, and second to know how to operate," he said. "Most people seem to have a hard time to figure out how to put together the mix of private and public financing."

Dallas tends to move from one big project to another, rather than developing strategies to carry out long-term goals, said Mr. Fregonese, the urban planner. "The cities that are successful with affordable housing have in-house expertise" that can help show developers how to produce such projects and still turn a profit, he said.

• Not taking no for an answer. As Dallas lawyer and housing advocate Betsy Julian says, just because you don't have an inclusionary zoning, doesn't mean you have to settle for nothing. You trade and haggle. Dallas, on the other hand, has not shown the political will to extract even modest concessions from housing developers.

A 2006 report to the City Council shows that since the late '90s, the city has provided nearly $125 million in tax increment financing and tax abatements to eight downtown housing projects without getting a single affordable unit in return.

Forest City Enterprises, the mega-developer of the Mercantile Complex on Main Street, received $62 million in TIF money and tax abatements without providing one affordable unit. The story is the same with the Dallas Power and Light building, Republic Center and other high-profile housing projects. The same is true of Uptown, another housing boom with no bottom rung, and of East Dallas, where mansions and upscale condos have transformed neighborhoods.

• Seeing the city as a home and not just a place to make money. "Developers here [in Boston] have a stake in a city that works. Most were born here, and are raising their kids here," said Jeanne Pinado, a Boston community housing leader. "They don't want to let it turn into a city of haves and have-nots. And that makes a huge difference. They don't just drive in from the suburbs to do deals."

Dallas has always promoted its can-do spirit, that every day is a new opportunity to succeed. The opportunity to succeed is still there, but the window is closing fast, Mr. Killingsworth said. "If we want affordable housing in Dallas, we're going to have to require it," he said. "Every day that goes by is another day of opportunity lost."

Study says Dallas fosters solid growth

Dallas Business Journal - 11:50 AM CDT Wednesday, June 6, 2007

The city of Dallas, along with Houston, Phoenix, Atlanta and Charlotte, N.C., offer America's most compelling model for urban greatness, according to a study released Tuesday.

The study, "Opportunity Urbanism: An Emerging Paradigm For the 21st Century," found that Dallas and the other cities would be more successful than others because they focus on creating opportunities for the masses rather than catering to the elite.

"A region's ability to create jobs, offer affordable housing and present entrepreneurial openings to a growing and highly diverse population is the surest sign of urban vibrancy and viability," said Joel Kotkin, the study's main author.

According to Kotkin, while some cities like Boston, New York and Los Angeles can prosper by focusing on the elite, most cities would fare better by focusing on making opportunities for the vast majority of their residents.

The study, which was conducted with The Barbara Jordan-Mickey Leland Institute at Texas Southern University and California's La Jolla Institute, was funded by the Greater Houston Partnership.

Investors Dropped Out of Housing Market in '06:

But Lots of Buyers Are Still Looking for a Vacation Place

Source: The Dallas Morning News
Publication date: 2007-05-01
By Steve Brown, The Dallas Morning News

May 1--Investors hightailed it out of the home market last year, a new report confirms.

But buyers were still shopping for vacation homes.

Sales of homes to investors plunged almost 30 percent in 2006, according to the study released Monday by the National Association of Realtors.

Even so, more than 1.6 million U.S. homes were purchased by investors.

About 22 percent of all houses sold last year were acquired by investors, compared with about 28 percent in 2005, the Realtors' research found.

It was the lowest percentage of investment sales in three years.

"We expected the drop in investment sales because speculators left the market in 2006, which caused investment sales to fall much faster than the primary market," economist David Lereah said in the report.

But buyers of vacation or weekend houses shrugged off worries about a stalling housing market.

About 14 percent of U.S. home sales last year were for vacation or weekend use -- a new high.

Sales of vacation homes increased almost 5 percent in 2006.

At the same time, sales of primary homes dropped about 4 percent.

"The rise in vacation home sales is based on strong demographic and lifestyle factors," Mr. Lereah said.

"The demographics favor vacation home sales because large numbers of consumers are in the prime buying ages, and buyers want recreational property for personal use -- investment is a secondary consideration," Mr. Lereah said.

The Realtors' survey found that the average vacation homebuyer is 44 years old, has a median household income of $102,200 and buys property within a few hundred miles of their primary residence.

The South and West were tops for vacation home demand.

On average, investor buyers were younger and had less income than vacation homebuyers, according to the Realtors' study. And they bought properties a median distance of 22 miles from home.

More than 40 percent of investment buyers said they were making the purchase to diversify their investments and generate rental income.

Investment buyers said they planned to hang onto their property for a median of five years.

The median price of vacation homes purchased was down slightly to $200,000.

The median priced investment home sold for $150,000 -- down more than 18 percent form 2005.

"Anecdotally, part of the drop in the median investment price results from investors shifting away from pricier markets like Florida, Nevada and Arizona, and into affordable locations," Mr. Lereah said.

New aloft Brand Hotel Slated for Dallas Area

March 09, 2007
By Tonie Auer, Southwest Correspondent

Hoping to capitalize on its success with the W brand of hotels, Starwood Hotels & Resorts Worldwide Inc. plans to develop a new line of lifestyle hotels with the first aloft hotel in Texas, located in the affluent Dallas suburb of Las Colinas.

Starwood plans to partner with Dallas-based developer Hillwood, led by Ross Perot Jr., the company which developed the master planned Victory Park in Dallas.

Aimbridge Hospitality, Champ Development and JF Capital Advisors are also partners in the venture. Hillwood will serve as the primary equity contributor, Champ is developing the hotel and JF Capital has provided the underwriting and is managing the debt placement. In addition to having an investment interest, Aimbridge will manage the aloft property once completed.

The 136-room aloft Las Colinas will be the first aloft hotel to be built in Texas and will be located on Texas Highway 114, minutes from the Dallas Fort Worth International Airport and about midway between the cities of Dallas and Fort Worth.

“We are aggressively growing the aloft brand in strategic locations and Dallas--Las Colinas, in particular--is a thriving market and a place we’re excited to be in,” a spokesperson for Starwood told CPN.

Construction is set to begin later this month with a targeted opening for first quarter 2008, the spokesperson said. No financials on the project were disclosed.

Following the success of Starwood’s W Hotels, aloft properties (pictured) will feature urban-influenced design and a social atmosphere with guest lofts featuring loft-like nine-foot ceilings and oversized windows. The aloft line will be designed by David Rockwell and the Rockwell Group. Starwood anticipates the first aloft hotels to open in early 2008, with 500 properties worldwide expected by 2012.

In addition to Las Colinas, the partnership is also looking to develop aloft properties in several other locations throughout the country, including the suburban Dallas area.

Housing boom in far north Fort Worth has impact on 2 districts

Posted on Sun, Feb. 18, 2007
Northern explosion

By SARAH BAHARI
STAR-TELEGRAM STAFF WRITER

A handful of years ago, sprawling pastures covered much of far north Fort Worth.

But in recent years, new jobs and affordability spurred housing growth there, and sprawling subdivisions soon replaced those fields. School districts quickly scrambled to hire demographers and population forecasters, more teachers and principals.

Many parts of the country have seen their housing markets slow down in recent months, but far north Fort Worth is still growing. And two Northeast Tarrant County school districts -- Keller and Northwest -- still face years of dealing with that growth.

"We have a strong community and a strong economy here," Northwest Superintendent Karen Rue said. "That's drawing a lot of people."

Officials in both districts say the key to success is planning and monitoring growth.

But Keller can now see the finish line, while Northwest is still in the early stages.

Across Texas, about 125 districts are considered fast-growing. That means the district's enrollment climbs by 10 percent or 3,500 students over five years.

Keller and Northwest see that much growth every two years.

Projections show the Keller district topping out with 38,000 students in 2014. It now has 28,000 students and adds about 2,000 students each year. A fourth high school will open in August 2009, and district officials do not plan any more major bond elections.

"We're starting to see the beginning of the end," Superintendent James Veitenheimer said. "But it's still a ways off."

The Keller district covers 51 square miles and draws students from nine cities, including Keller and Fort Worth.

Northwest, on the other hand, covers 232 square miles and parts of 14 cities, including Fort Worth, Trophy Club and Roanoke.

It has about 10,500 students, double the number from five or six years ago, and is expected to double its enrollment again in five years. Current projections show the district could reach 44,000 students by 2022.

But, if all parts of the district get developed, Northwest could eventually reach a maximum 114,000 to 120,000 students, district officials said.

Growth to continue

"We have the potential for phenomenal growth," said Dennis McCreary, Northwest's assistant superintendent for facilities, planning and construction.

And that shows no signs of changing.

Overall, Dallas-Fort Worth has escaped the housing slump seen on both coasts, said David Brown, director of the Dallas-Fort Worth office of MetroStudy, a consultant for the housing industry.

But far north Fort Worth is undoubtedly the star in the Metroplex. In 2006, it grew by 6,000 homes, Brown said. The next two fastest-growing areas -- Frisco and McKinney -- had the combined growth of north Fort Worth.

"Job growth and affordability are the big driving factors," Brown said, adding that he has heard of people selling their homes in California and paying cash for a house here.

Homes in far north Fort Worth typically sell for $175,000 to $185,000, housing experts say. The housing market may ease up just a little this year, Brown said. He estimates that 5,500 homes will be built in far north Fort Worth this year.

Ted Wilson, partner at housing analyst Residential Strategies, said developers got a little ahead of themselves last year, causing a surplus. So builders are pulling back.

Even so, Wilson said, far north Fort Worth "has seen extraordinary growth and will continue to be very solid."

Officials in the Keller and Northwest school districts say they do not expect growth to dwindle. But if it does, they will adjust building plans.

Northwest has already adjusted its construction schedule to deal with rapid growth. Officials have moved up the opening of a new school near Harmon and Winter Hawk roads in Fort Worth by a year, to August 2008.

The district will probably decide this spring whether to have another bond election, McCreary said. Northwest voters passed a $224.5 million bond package in 2005.

Services lagging behind

In the Keller district, not much land is left to develop. Now, district officials are watching for construction of large apartment complexes, which could quickly create an influx of students.

"That's always the wild card for us," Veitenheimer said.

In Keller's case, the other wild card has been inadequate streets and sidewalks.

Administrators decided last summer that the roads near the new Trinity Meadows Intermediate and Trinity Springs Middle schools were too dangerous for many students to walk to school.

The city of Fort Worth picked up the tab to bus students who live near three schools in the city until sidewalks, crosswalks and traffic signals are installed. But many residents complained that officials waited until the last minute to make plans.

Then, two children, ages 7 and 9, were struck by cars last fall in separate incidents while walking home from schools in far north Fort Worth.

Fort Worth City Councilman Sal Espino, who represents the area, has promised that the city will work harder to provide relief.

Veitenheimer said the two sides have developed a strong working relationship.

"No one has a magic wand that will create a road," Veitenheimer said. "We both have to rely on each other to be successful."

Northwest hasn't had the same problems, although some Fort Worth neighborhoods do not have adequate streets leading in and out of them, McCreary said.

While officials in both districts concede that growth does present challenges, they say it provides even more opportunities.

"Fast growth is a challenge, but it's better than the alternative," Veitenheimer said. "We're in a good position."

District snapshots

Keller

Student population: 28,000

Schools: 31

Area: 51 square miles, drawing from nine cities

Growth projection: 38,000 students by 2014

Northwest

Student population: 10,500

Schools: 14

Area: 232 square miles, drawing from 14 cities

Growth projection: 44,000 students by 2022

Dallas-FW housing sales fall 5%

Prices slid 2% in December, marking the end of a difficult year

12:00 AM CST on Tuesday, January 9, 2007
By STEVE BROWN / The Dallas Morning News

The Dallas-Fort Worth housing market ended 2006 with another month of declines.

Sales in December were down 5 percent from a year earlier, and prices were 2 percent lower, according to statistics released Monday by the North Texas Real Estate Information System.

"December results look like a continuation of the pattern we have seen all year – home sales generally lower than last year and prices flat to slightly higher," said real estate agent Bob Edmonson of Allie Beth Allman & Associates.

December was the seventh consecutive month of lower pre-owned home sales in North Texas.

Based on last year's monthly declines, total home sales were down about 5 percent for the year.

It was the fourth consecutive month that home prices were down from the previous year. However, median sales prices were up about 2 percent during the year.

Some of the largest sales declines in 2006 were centered in homes priced under $150,000, where buyers were affected more by higher mortgage rates.

Sales of high-priced homes continued to rise last year. The number of homes sold for $1 million or more increased 18 percent.

With pending home sales running about 6 percent higher than this time last year, sales agents are closely watching to see if the market moves higher in 2007.

"We Realtors are an optimistic lot, and January always marks the beginning of the spring market," Mr. Edmonson said.

Industry analysts say it's too early to tell whether 2007 will be a better year for the housing market.

"January and February will probably still have some decline – normal cyclicality," said Jim Gaines, an economist with Texas A&M University's Real Estate Center. "By March and April, expect an uptick. If not, Dallas may have a rough 2007, but I don't think it will."

At the end of December, 41,598 pre-owned single-family homes were on the market in North Texas, 9 percent more than a year earlier.

On average, it took 76 days to sell a house – up slightly from 2005.

But the area still has less than a six-month supply of homes to sell, which is considered healthy.

And with a median price of less than $150,000, Dallas-Fort Worth is one of the most affordable big-city markets in the country.

Jim Fite, president of Dallas-based Century 21 Judge Fite Co., said gross sales commissions at his company were up in 2006.

"We ended up having a very good year," Mr. Fite said. "I'm very happy compared with what's going on around the rest of the country."

Single women take No. 2 spot in home market

Realtors refocus to keep pace with trend

08:58 AM CST on Friday, December 8, 2006

By STEVE BROWN / The Dallas Morning News

Laurie Minchew has been in her new home for only about a week.

But the 35-year-old single woman said she made the right decision to buy the three-bedroom house in Red Oak.

The appeal was both the lifestyle and investment potential of homeownership.

"It was about 50-50," said Ms. Minchew, who was previously living with a friend. "It's still all very new for me, but I like it."

The latest housing industry surveys show that single women are the fastest-growing segment of homebuyers – now second only to married couples. They account for nearly one in four homebuyers and purchase houses at more than twice the rate of single men.

Researchers say it's a combination of social changes and finances that's causing the increase.

"More women are simply living alone – either never married or formerly married – and are much more active in career paths earning more money than ever before," said James Gaines, an economist with Texas A&M University's Real Estate Center.

Mr. Gaines said it is also "no secret that for the past five years or better, homeownership has been a very desirable investment position."

He also points out that "historically this was a small group in terms of homeownership, so any increase will look large in percentage terms."
Also Online

Who's buying houses (.pdf)

Over the last 10 years, single female buyers have been the fastest- growing segment of the housing market, according to surveys by the National Association of Realtors.

This year they make up about 22 percent of homebuyers, compared with 14 percent in 1995, Realtors' research shows. At the same time, the number of married couples in the market has fallen by almost 10 percentage points to 61 percent, and single male buyers have remained unchanged at about 9 percent.

Whatever the reason, homebuilders are catching on to the shift in the market.

"We are looking for opportunities to address this market," said builder Steve Wall, who sold Ms. Minchew her home in north Ellis County. "Having products that address each of the buyer groups is important.

"There was a time when you had a one-size-fits-all mentality," Mr. Wall said. "We have to give people what they want, not what we want to build."

Real estate agents are also refocusing efforts to attract single female buyers at a time when the overall housing market is a bit soft.

"I've had a lot of female buyers this year," said Kim Fowler with David Griffin & Co. Realtors. " My average age of the five or so single women I have sold to this year has been about 28."

Ms. Fowler just sold a two-bedroom condo in Oak Lawn to Laurie Self, who's in her mid-30s.

"The rent just went way up at my apartment – that was part of my motivation," Ms. Self said. "Mortgage rates are good now, and it's a buyer's market."

Ms. Self, a corporate auditor who lives near the High Five interchange in North Dallas, was also interested in moving deeper into the city.

"I saw how real estate prices were going up like crazy," she said. "I can flip it in a few years and have some equity."

It isn't just builders and home sellers who've seen an uptick in single female customers.

"We have had a lot more single female renters than we initially thought downtown," said Ted Hamilton with Hamilton Properties, which has successfully converted several downtown office buildings into rental housing.

Mr. Hamilton estimates that about 40 percent of his single renters are women and that many of them like the security aspect of the buildings.

The turnaround in the central business district has also caught the attention of these renters, he said.

"The more vibrant downtown gets, the more appealing it will be to single females."

Is housing already poised to recover?

Realtors' economist, some Texas analysts disagree about timing

12:00 AM CST on Saturday, November 11, 2006

By STEVE BROWN / The Dallas Morning News

NEW ORLEANS – The top economist for the national Realtors group predicts that the national housing downturn is leveling out and a recovery may be at hand.

Not so fast, say Texas housing analysts, who think that's just wishful thinking and further cutbacks in home sales and prices are ahead.

"The bad news is just about behind us," David Lereah, chief economist with the National Association of Realtors, told industry members meeting Friday in New Orleans. "It appears that we have bottomed out.

"From a sales perspective, the worst may be over," Mr. Lereah said.

The number of unsold homes on the market nationwide seems to have peaked and the volume of pending sales looks promising, Mr. Lereah told thousands of real estate agents who are struggling with the industry's first downturn in more than a decade.

But Texas housing analysts are less sanguine.

While Dallas, Houston, Austin and other Texas cities have so far not seen a dramatic home sales retreat, the nationwide market is not out of the woods yet, they say.

Prediction that the worst is over for housing is "more jawboning, hoping that they can influence things to be at the bottom," said James Gaines, economist with Texas A&M University's Real Estate Center.

"Personally, I think the 2007 housing market will be down across the board and not make significant improvement until sometime in 2008, and that assumes we don't have a recession or anything approaching a recession," Mr. Gaines said.

Dallas housing analyst Ted Wilson agrees that it's too early to see an end to the housing slowdown.

"Yes – a little bit, perhaps wishful thinking," said Mr. Wilson with Residential Strategies.

Major homebuilders are preparing for a significant slowdown, he said.

"In Dallas, about 10 of the large builders currently are on hiatus – not committing on new lot deals," said Mr. Wilson.

"There have also been some significant layoffs with many of the building firms as well – indicative of a more long-term issue than just a blip."

The Realtors aren't the only ones saying that the housing decline is moderating. Former Federal Reserve Chairman Alan Greenspan recently remarked that he believes the home slump is ending and that the current quarter will be better.

The National Association of Realtors says pre-owned home sales have fallen about 9 percent so far this year.

"In '07 it will be a flat year," Mr. Lereah said. "Maybe a 1 percent drop – that's it."

In some cities that didn't see a big run-up in home prices during the last few years, sales are likely to increase in 2007, he said.

"Twenty-three percent of the nation falls into this category – they never experienced the boom," Mr. Lereah said. "Houston, Texas, Austin and Dallas are great examples.

"Some modest price drops will be enough to bring buyers back into those marketplaces."

Median home prices declined slightly in the Dallas-Fort Worth area during both September and October. Home sales in North Texas have been down in each of the last five months.

Nationwide home prices are forecast to rise by less than 2 percent in 2006 and 2007, following a 12.4 percent jump in 2005, according to the Realtors.

In many U.S. cities home prices are already falling.

"Don't be afraid of prices coming down," Mr. Lereah said. "When prices come down, it brings back buyers.

"If they see sellers are more flexible, they are more apt to come back to the marketplace."

Dallas-area real estate agents report that some potential buyers are taking a wait-and-see approach to the market. They are holding back until after the first of the year to determine if housing prices are going down.

"We have sidelined buyers who need to regain confidence," Mr. Lereah said. "If you are a buyer waiting for prices to come down further in your local area, you are gambling."

In overheated housing markets in the West and parts of Florida, there's still no sign that prices have stabilized.

"It's going to be tough," said real estate sales consultant Steve Murray with Denver-based Real Trends Inc. "In some markets it will be 12 months before we see any uptick and in some it will be 24 months.

"2005 marked the end of the great 12- or 13-year bull housing market."

But Mr. Murray also predicted that the worst of the housing shakeout may be past for some housing markets.

The residential sales industry will continue to see changes – even though the market is off, he said. The impact of the Internet on housing sales isn't complete, Mr. Murray said.

"We really haven't experienced the full onslaught of these structural changes," he said. "Consumers do not and will not rely on sales professionals solely, as they did in the past for their housing information.

"They will increasingly rely on the Web for their info."

There will also be fewer real estate agents.

"We are actually predicting an 8 percent drop in membership," Mr. Lereah told Realtors, who enthusiastically applauded the news. "Productivity will get better as we have less members and the quality will improve.

"It's an overall good thing for the industry."

The North Texas housing market has shifted into slower growth.

North Texas home market slows
Dallas-area sales, prices are still rising, but not as robustly as in the past

09:33 AM CST on Monday, October 30, 2006
By STEVE BROWN / The Dallas Morning News

While the Dallas-Fort Worth area isn't seeing the kind of slump some East and West Coast cities have suffered, the rates of home sales and price increases has dwindled this year.

Through the first nine months, home sales in the Dallas area are up about 2 percent from a year ago. Prices are up a scant 3 percent.

Some neighborhoods are bucking the trends. Home sales prices are up 15 percent this year in the Park Cities and up 10 percent in East Dallas. In Keller, prices are 11 percent higher than a year ago, and prices are up 10 percent in Southlake and 9 percent in McKinney.

While Dallas overall has had a "ho-hum appreciation rate," that's not bad, said Mark Dotzour, chief economist at Texas A&M University's real estate center.

"In most decades, people would be thrilled to death to have a 3 or 4 percent appreciation," Mr. Dotzour said. "In Dallas, the economic conditions for a strong housing market are still there – positive job growth, cheap mortgage rates and continued home price appreciation."

The biggest sales increases so far this year have been in Lancaster, 17 percent; Fairview, 15 percent; and Denton County, 10 percent.

Overall sales have trailed down in the last few months, but that may have more to do with attitudes than economics. Builders and real estate agents hear that some buyers are waiting to see if prices will fall as they have done elsewhere.

"It has affected the buyers' perception," said Ted Wilson of Residential Strategies Inc.

Housing is now a drag on the U.S. economy, after years of positive influence, he said. "If the consumer feels they are losing equity in their house, it can curb their spending habits," Mr. Wilson said.

Innovations aim to lure residents to downtown

Dallas: Forgivable loans for buyers, grants for developers on the table

05:19 AM CDT on Tuesday, October 17, 2006

By DAVE LEVINTHAL / The Dallas Morning News

Hoping to lure thousands more residents to downtown, Dallas city officials have begun crafting two incentive programs to that end that are unprecedented locally.

One, targeting prospective condominium buyers, would use a cocktail of public funding sources to offer forgivable loans of up to $40,000 to people earning less than the nation's median family income.

As conceived, qualifying individuals could use the loan toward purchasing downtown residences, many of which have become prohibitively expensive for lower- and middle-income Dallasites. If, however, a loan grantee sells his or her property within 10 years of purchasing it, the recipient would have to repay it in full.

"The idea is to fill the gap between sales price and the mortgage you can afford," said Jerry Killingsworth, director of Dallas' Housing Department.

Downtown developers are required to provide "affordable" units within apartment projects, but many choose to pay the city a fee to skirt the regulation. City officials say they hope to use these payments to help fund the loan program.

Several Dallas City Council members say they like the concept, which would address the city's desire to create 10,000 mixed-income housing units downtown but would avoid government "rent control" policies used by cities like New York.

"It is a new idea. You have to test it and see how it works in the marketplace," Office of Economic Development Director Karl Zavitkovsky said.

Dallas' second incentive plan aims to offer downtown housing developers as yet unspecified tax incentives if they agree to build two downtown projects at once – one on downtown's fringes and another within more developed sections. Developers agreeing to do so would be eligible to receive a public grant on the more remote building, according to city staff's preliminary plan.

The plan is an end-around a situation that has limited City Hall's ability to provide incentives for downtown development projects.

This year, Dallas agreed to stop offering property tax abatements and tax increment funding within a large swath of prime downtown real estate in the Downtown Connection Tax Increment Financing District. Developers working in the district potentially can recoup some property taxes to fund building demolition, environmental remediation, infrastructure improvements and the like.

The city did so in order to appease financiers of Main Street's Mercantile Bank complex redevelopment project, which includes nine downtown buildings slated for renovation into housing. The project is set to receive about $70 million in public incentives, the majority of which is funded by public revenue bonds.

Council member Mitchell Rasansky suggested also providing companies that choose to relocate downtown with cash for each employee who chooses to live within the center city.

City staff plans to brief the council with detailed versions of both plans later this year.

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.

Downtown living enters new era

Aleshia Howe - April 24, 2006

More than 1,200 curious homebuyers crowded the streets of downtown Fort Worth April 1 and 2 to take a tour of living opportunities – an event that signifies a new era of the center city, said Downtown Fort Worth Inc. President Andrew Taft.

“We couldn’t have had this tour a year or two ago,” Taft said. “We weren’t ready for it. But with downtown booming like it is, we had a great response. The fact that we had 1,200 people show up the first time we’ve had an event of this nature is just the tip of the iceberg of downtown’s living potential.”

Since the dreary days of a blighted downtown in the 1990s, Fort Worth’s center city has blossomed into a booming residential market buzzing with activity.

And Taft said the developing area has nowhere to go but up – in every sense of the word.

“When people are looking for a place to live, downtown simply offers things that traditional developments can’t,” Taft said. “Where else can you find the view that The Tower can give from 488 feet high? Downtown living isn’t just an upcoming trend – it’s a trend that’s here.”

According to Integra Realty Resources D/FW LLP, new home starts in the Metroplex set a record-breaking pace in 2005 with 47,324 new, single-family homes – 16,745 of which were in Fort Worth.

Taft said there is a parallel between the general residential market and that of the downtown market.

“Downtown Fort Worth is mirroring the residential renaissance that we see happening across the country,” Taft said. “The downtown strategy of starting with apartments to test the viability of the market then transitioning into condo sales is exactly what we’ve done and it’s worked beautifully, just as it has in other downtown markets. The difference is that we have buildings like the Neil P. Anderson and The Tower to offer. You can’t find spots like those across the country and definitely not at our prices.”

Fort Worth’s Downtown Strategic Plan, released in 2003, calls for 10,000 new units in the greater city corridor by 2013. According to Downtown Fort Worth Inc., a non-profit organization that manages the downtown Tax Increment Finance District, the greater corridor is defined by the core downtown area, Lancaster corridor, Samuels Avenue, lower and upper west sides, upper east side and Fort Worth South.

Currently in the greater city corridor, the total number of units built is 1,871 with an additional 2,436 proposed and 785 under construction.

The core downtown area has seen 500 new units – both rental and for sale – created with 350 new units under construction and nearly 100 undergoing renovation.

Though residential development has been popping up in downtown at a break-neck pace, Taft said he expects the number of upcoming progress to level off soon.

“I expect the pace to take a breather,” he said. “And some of the projects that have been announced probably won’t occur. Just like in any other real estate market, there is a risk of over-saturation – look at Dallas’ office market. It was overly saturated and they are still suffering from it. There is a risk with real estate of overbuilding, but I don’t think we have done that yet. We still have a ways we could go.”

James “Jim” R. Harris, partner in James R. Harris Partners LLC, has researched and spoken on the topic of local residential development at the annual Tarrant County Commercial Real Estate Forecast for the past three years.

During his research, Harris said he spoke with several downtown developers who agreed that the center city housing market is steady.

But the days of developers purchasing cheap, downtown buildings to renovate and market at affordable prices are all but gone, Harris said.

“Up to now we’ve sort of picked the low-hanging fruit in downtown, so cost per unit has been cheap,” Harris said. “Going forward, there are not going to be the inexpensive buildings, so developers will have to raise selling prices per square by 50 percent, to be able to make the same amount on their properties.”

Harris said no one really knows what the future of the downtown residential sector holds, but, according to his research, he doesn’t expect the market to take a dive.

The most telling number for the downtown living sector, Harris said, is the demand per unit per year in the area. According to his figures and what he gathered from developers, Harris said he reported a demand of 150 to 200 units per year during the 2006 real estate forecast.

But, he said, those numbers were based at current prices.

“The market is most likely to remain steady, but level off,” he said. “If there is a demand for 200 or less units per year, then it might take developers longer to fill their units than they originally planned, but they will still fill them. Of course, that demand is based on current prices and that is where the uncertainty comes in.”

Harris said he expects David Porter’s City Place project, which is the rebirth of the former Tandy Center, to be the next big thing to hit the residential market. Last month Porter announced intentions to convert the north tower of the former RadioShack headquarters to office space, adding that the south tower is still slated for residential development.

Harris said the decision to make the north tower office is not a hint at a slowing residential market, but a clear sign of a growing office demand.

“Porter bought those buildings for real cheap, so he could conceivably convert the south tower to residential, offer the units for a competitive price and still come out ahead,” Harris said. “After the south tower opens as residential though, developers will be hard pressed to find an affordable building in downtown to convert to residential.”

The center city residential market took a sharp turn in 2003 when The Tower, a former office building turned condo development, hit the market and never looked back. TLC Realty Advisors converted the 37-story office complex into 298 for-sale condominiums and four penthouses. Taft said The Tower’s success proved the viability of a new generation of for-sale, luxury residential units in the city’s downtown area. Since that time, five condo developments have hit the center city market, joining seven apartment complexes and paving the way for several more projects that are currently in planning stages.

“It’s a whole new world in downtown, post The Tower,” Taft said.

An “unspoken” cooperation between most developers in downtown has formed, Taft said, despite a competitive and time-sensitive residential market.

“Naturally the first developments out of the ground will be in a better competitive position than those that are not complete until a later date, but developers here seem to respect the fact that it is a tight spot they are building in and they are mindful of each other. Of course, there’s always a jockeying for position in any market, and downtown is no different.”

According to questionnaires distributed to some of the 1,200 visitors during the home tour, 45 percent of the interested homebuyers were from Fort Worth and the remaining 55 percent were from surrounding areas – 18 of which came from Arlington.

Williams Trew Real Estate Services represents five of the downtown residential developments, including The Tower and the newly renovated Neil P. Anderson building. Marshall Boyd, managing partner of Williams Trew, said the goal for the April home tour was to get exposure for downtown Fort Worth.

And, he said, it worked.

“We’ve had one sale from the home tour and several more contracts have been let,” he said. “People are excited about downtown.”

According to studies conducted by Downtown Fort Worth Inc., the largest percentage of downtown dwellers is made up of empty nesters and young, single couples.

“A significant number of purchasers in the downtown area have either not had children yet or have already raised their children and are looking to get rid of the big house in the suburb,” Taft said.

Boyd agreed, saying gas prices are also weighing heavy on commuters’ minds.

“With gas hitting $3 a gallon, people who live in Arlington, for example, and work in Fort Worth are realizing that it’s eating away at their income,” Boyd said. “We were happy to see that we were right about the commuting trend – it’s fading out as gas prices continue to rise.”

Boyd added that he spoke with many interested people during the home tour who said the thought of not having to drive to go to a restaurant, movie theater or performance hall was appealing. Many people, he said, were sold on the convenience.

“Of course you have those who don’t want to live in a downtown area, but the fact remains that more and more people are seeing the benefits of it,” Boyd said. “With so many new options in Fort Worth, it’s not a trend that will go away.”

John Wolffarth, a 26-year-old attorney who has lived at The Depot Apartments since September 2005, said the downtown area was the only place he looked when he moved from Austin last year because of its entertainment value.

“I wanted to live downtown basically to have easy access to Sundance Square, restaurants [etc.],” he said. “Plus, I thought there would be other people down here in my age group.”

Though Wolffarth works outside of downtown, he said the “atmosphere of downtown is worth the commute.”

As far as residential design in downtown, Boyd said the sky is the limit.

“It’s interesting how there is really no leading design for the residential space that’s being offered,” he said. “The developers are really doing a good job of spanning the gamut of products. There is a wide array of designs being offered, and no two designers are really doing the same thing. From penthouses to luxury condos to town home projects – they’re all unique in design.”

Taft said although the real estate market is hard to predict, the success of downtown residential will be a contender in the residential sector for years to come.

“No one knows the future, but the residential development in downtown is well thought out, has been well executed and I believe it will continue to be a trend for many years,” he said. “Space may be limited on the ground, but these buildings are tall and can accommodate a lot of units in tall places and that intrigues homebuyers – and it’s not something that is going away any time soon.”

2 townhome projects on way

More than 70 units planned downtown near Farmers Market

08:50 AM CST on Thursday, February 9, 2006
By STEVE BROWN / The Dallas Morning News

Two new townhome projects promise to transform the neighborhood around downtown Dallas' Farmers Market.

Builders Perry Homes and J.G. Moore & Co. have filed plans with the city of Dallas to build more than 70 townhouses on Central Expressway near the Farmers Market.

The townhouses will be constructed on land purchased from Houston developer Camden Property Trust, which has been developing apartments near the market since 1999. Camden also built and sold 17 townhouses on the north side of Canton Street at Central.

Developer Jim Moore has purchased the block to the west on Canton where he will construct 28 townhouses.

"We will be under construction in about four months," Mr. Moore said Tuesday. "We are going to be in the $300,000s price range."

His J.G. Moore & Co. built the award-winning Sundance Row townhouses in Uptown and is currently building other projects in central city neighborhoods.

Perry Homes – which is one of the area's busiest townhouse builders – plans to construct its townhouse community on a vacant block at Central and Marilla, according to filings with the City Plan Commission.

Officials with Perry Homes did not respond to requests for information about the project's timing or cost.

Camden Property has spent more than $100 million developing land east of the Farmers Market into an apartment community. The developer just completed almost 300 units in its project east of Central.

And Camden is negotiating to sell more land around the Farmers Market.

The plan to add two townhouse developments will help the area grow as a residential neighborhood, said housing analyst Mike Puls with Foley & Puls.

"It adds credibility to have more than one developer building there," Mr. Puls said.

He said with all the condo and townhouse construction in Uptown, areas such as the Farmers Market are becoming alternatives for developers.

"We've speculated that something like 100 acres of townhome land have been consumed in Uptown in the last few years," Mr. Puls said. "There is hardly no dirt left in Uptown for these kinds of projects."

Haves, have-nots split housing market

Smaller mortgages falling to foreclosures as high-end sales climb

11:20 PM CST on Friday, January 20, 2006

By BRENDAN M. CASE, STEVE BROWN and IEVA M. AUGSTUMS / The Dallas Morning News

In a healthy local housing market, a sign of trouble has appeared: More people are losing their homes to foreclosure than at any time since the Texas real estate bust of the 1980s.

The causes run from bad luck to bad financial decisions: job loss, divorce, a health crisis, skyrocketing energy bills, out-of-control credit card debt, or a mortgage payment that turned out to be unaffordable.

But there also seems to be a sharpening contrast between real estate markets at either end of the economic ladder.

As residential foreclosures jumped 30 percent from a year ago in North Texas, the average mortgage on foreclosed houses fell to $129,000, compared with almost $146,000 a year ago.

Meanwhile, home sales set records last year, with a strong 20 percent increase in sales of homes priced over $400,000. But there was a 4 percent decrease in sales of homes priced below $110,000.

"What we're seeing develop in the marketplace is the haves and the have-nots," said Craig Jarrell, who heads up the Dallas operations of Pulaski Mortgage Co.

"Either you've got money and you've got a job and you're buying a new house and you're rocking along," he said. "Or you're underwater and can't buy a new house, and can't afford the one you're in and you're going into foreclosure."

Newer mortgages, too

That's not the whole picture, of course. The foreclosure hammer also recently fell on an Addison home valued at $1.5 million, a North Dallas house valued at nearly $870,000 and a Coppell property worth about $430,000.

But Connie Zetterlund, a Coldwell Banker Residential agent who specializes in foreclosed property sales, says she's noticed increasing signs of trouble at lower-priced properties.

"The price ranges are a little lower than last year," she said. "There are a ton of foreclosures out there right now."

That's not the only trend. Ms. Zetterlund has also noticed more trouble among newer mortgages, the ones acquired after the economic downturn earlier this decade.

"I'm seeing a lot of properties bought in 2004 and already going to foreclosure," she said.

In a fix

Consumer Credit Counseling Service of Greater Dallas has seen an influx of people coming in with housing concerns.

"With the low interest rate, people are biting off more than they can chew," said Gail Cunningham, the company's vice president of business relations. "They've been extended a loan that really eats up a significant part of their income."

Even some mortgage lenders, worried about rising foreclosures, warn would-be homebuyers against borrowing too much.

"People a lot of times are getting themselves way overextended, and they're taking some nontraditional products," said Gary Akright, a mortgage broker in Dallas with Dominion Mortgage Corp.

One reason is the range of newfangled products such as interest-only mortgages and certain kinds of adjustable rate mortgages. Designed to hold down costs in the early years, payments on such loans can rise sharply later.

Proponents of such mortgages say they help homebuyers in places where home values are rising quickly, or people who plan to live in a home for just a few years.

But think hard about future costs before taking out a mortgage, says Bonnie Peterson, the director of education and marketing at Consumer Credit Counseling Service of North Central Texas, which serves Collin County.

Ms. Peterson, who is having a house built in Princeton, recently went through the mortgage application process and found that lenders were eager to provide her with more money than she wanted to borrow.

"I was qualified for more, but I didn't think I could afford it," she said. "I want to have enough money to live the life I want to live."

More than half the potential foreclosure victims Ms. Peterson sees at work are able to save their homes, especially when they seek financial advice early, she says.

"A lot of people don't want to talk to anyone, or they wait too long," she said.

Bankruptcy option

Another option is bankruptcy, even though a new law that took effect last year made bankruptcy proceedings more onerous. Filing a Chapter 13 bankruptcy gives debtors up to 60 months to repay some or all of their debts. It stops the foreclosure process and gives debtors a way to make their payments.

"If they want to keep their home, bankruptcy is the way to go," said Richard Venable, a consumer bankruptcy lawyer in Bedford.

The last time home local foreclosures were so high was during the "Oil Patch" recession of the late 1980s and early 1990s.

The good news is that today's foreclosures make up a much smaller percentage of the overall housing market because the residential base in North Texas has more than doubled.

Areawide problem

Another difference: Back then, home defaults were often clustered in specific neighborhoods. These days, they're all over.

George Roddy, whose Foreclosure Listing Service Inc. has tracked North Texas foreclosures for more than 20 years, said, "I remember there were subdivisions in the late 1980s that had huge numbers of foreclosures.

"Today we are not seeing that, and it's so spread out that it doesn't focus on a subdivision or neighborhood," he said.

And while in the '80s most people owed more than what their houses were worth, the latest stats show that foreclosed homeowners have at least some equity.

In the last foreclosure boom, lenders dumped houses and it wasn't uncommon to see property values fall by 30 or 40 percent in a neighborhood, Mr. Roddy said.

Now, some real estate investors are looking at the Dallas-Fort Worth area as a place where bargains can be had for lender sales. So far, however, lenders are seeking top dollar for such homes, even if that means keeping them on the market longer, realtors say.

"We certainly haven't seen the value loss like we had in the 1980s," Mr. Roddy said. "But if the foreclosure numbers hold up like we've seen for February, it could be pretty scary."
BY THE NUMBERS

Data from current foreclosure postings in the Dallas-Fort Worth area
DALLAS COUNTY

Average original loan: $90,822

Average age of loan: five years

Average size of house: 1,616 square feet

Average age of house: 30 years

Average tax value of house: $113,475
DENTON COUNTY

Average original loan: $118,378

Average age of loan: three years

Average size of house 1,922 square feet

Average age of house: 13 years

Average tax value of house: $136,400
COLLIN COUNTY

Average original loan: $129,800

Average age of loan: three years

Average size of house: 1,938 square feet

Average age of house: 13 years

Average tax value of house: $146,282
TARRANT COUNTY

Average original loan: $93,448

Average age of loan: four years

Average size of house: 1,667 square feet

Average age of house: 25 years

Average tax value of house: $102,845

SOURCE: Foreclosure Listing Service

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 inst