Tuesday, September 18, 2012

Dallas-Fort Worth Housing Data is Missing Part of the Market Picture

This year most of the news about the local housing market has been good. But how good is the data these reports are based on?

Pre-owned home sales in North Texas have risen 16 percent in 2012 and median sales prices are 7 percent higher, according to the multiple listing service. That’s the database real estate agents use to display home sales listings and record completed purchases. Those MLS listings also provide information for Internet marketing sites including Realtor.com and others.

And every month we report the health of the local housing market based on those MLS results. There’s only one snag. Not everything is in there. Hundreds of properties are sold every month in the Dallas-Fort Worth area and never wind up in the MLS reports.

“That’s always been the case,” said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University. “We never have known all the new homes being sold because a lot of the builders don’t use the MLS.

In neighborhoods where competition for houses is strong, agents aren’t even putting their listings in the MLS. With these so-called hip pocket deals, houses are bought and sold in under-the-table transactions. Also, sellers of exclusive properties are shy about letting the world know what their house fetched on the market. And they will sometimes require the real estate agent not to disclose the price at closing.

In Texas, where property sales data is deemed by state law to be confidential, there’s really no way of tracking down the withheld sales prices. Real estate agents estimate that about 10 percent of homes sold in the market trade without the help of a Realtor. Those properties aren’t in the MLS, either. Economists and consumers have to make do with what’s left. And fortunately that’s still a big slice of the pie.

The motivation is the owners want to keep their values hidden so you don’t get a big tax bill,” said Ted Wilson of Dallas-based Residential Strategies. “That hurts the market because there are no comps to use” for sales appraisals.

Steve Brown

Real Estate Editor 

Dallas Morning News 


Mortgage Headlines Sound Worse Than the Truth of Near-Record-Low Rates

The latest headline about home loan costs isn’t what homebuyers want to read. “Mortgage Rates Move Higher for Third Consecutive Week,” said Thursday’s announcement from mortgage giant Freddie Mac. As ominous as that sounds, mortgage costs actually haven’t moved much this year. And the most recent increases for fixed-rate 30-year home loans — from a nationwide average of 3.49 percent in late July to 3.62 percent this week — are just chicken feed.

The rise in rates since last month would add about $15 to the monthly payment on a $200,000 conventional loan. That won’t get you a tank of gasoline. Current average home loan rates are still well below where they were a year ago.

Thanks to the Federal Reserve — which has basically promised to keep the lid on borrowing costs until 2014 — mortgage costs should be the least of the worries for homebuyers.
“In fact, we wouldn’t be surprised if rates dropped some more,” said James Gaines, an economist with the Real Estate Center at Texas A&M University. “We’re not necessarily saying they will, but it wouldn’t be a surprise. Rates will be volatile within a fairly small range for the rest of the year.”
Homebuilders also aren’t fretting about higher borrowing costs. National Association of Home Builders’ chief economist David Crowe said any increase in mortgage rates during the remainder of the year won’t be appreciable. “Arrival of a Quantitative Easing 3 [another round of bond purchasing] by the Fed would also keep them down,” he said.
Local mortgage folks say that the tiny rise in mortgage rates over the last month has gotten a mixed reaction from their customers. “This slight increase has increased my volume by nearly 50 percent,” said Bill Parker of Old Capital Residential Lending. “I’m telling folks that rates always rise quicker than they fall so I am recommending that they lock a rate that hasn’t been seen since the late 1950s and early 1960s.”
But Mark Raskin of PrimeLending said rate increases so far haven’t spooked his customers.“The educated consumers realize that rates are still ridiculously low,” Raskin said. “With sub 4 percent rates, does a one-quarter point increase really make a difference?” “Psychologically, we always want the very best rate ever available,” Raskin said.
For sure, homebuyers and refinancers understand the wisdom of locking in these low mortgage costs. During the second quarter, more than 95 percent of mortgage refinancing was with fixed-rate loans, according to Freddie Mac.

Steve Brown
Real Estate Editor
Dallas Morning News

Thursday, September 13, 2012

Redos of Old Dallas Landmarks in Days Gone by Usually Wound Up As a Mess

Demolition crews are busy down on Main Street tearing apart Dallas’ first skyscraper. 

When the old Praetorian Building opened in 1907, it was the tallest tower in the Southwest with (gasp) 15 floors. Folks paid a quarter just to go up on the top floor and take a look.
More impressive than the staggering height was the outside of the $800,000 office building. Every inch of the Praetorian Building’s exterior was covered in classical architectural details — granite pillars, terra cotta detailing, gold ornamentation and such.
The old building was stripped to its bare bones and covered in a “modern” facade of yellow and white checkerboards. After the building sat empty for more than a decade, the current owners decided the only thing they could do was tear the mess down.
Downtown’s once beautiful Cotton Exchange building on St. Paul Street — designed by legendary local architects Lang & Witchell — also got a 1950s full metal jacket that covered up all its fine brick and stone exterior. In the 1990s, investors knocked it down to make room for a parking lot.

And the even older Cotton Exchange on Akard Street had the same remodeling treatment. It’s gone, too.

Other downtown buildings that had mid-century makeovers have been left sad derelicts.

The century-old Butler Building across from Dallas City Hall lost its original Romanesque-style facade to a dreadful 1960 redo. After several failed redevelopment plans, it’s still vacant.

The old 1025 Elm Building — built as an office tower for the Texas & Pacific Railway — languished for years after a 1959 remodeling saddled it with a forgettable metal and glass skin. It’s finally being converted into a Hilton hotel.
They were trying to compete with all the new developments,” Doty said. “You had property owners downtown trying to modernize their buildings and make them look new and sleek.”
Alas, today’s new and sleek lasts for only a flash, then we are left with something far less.

Steve Brown
Real Estate Editor
Dallas Morning News 

Dallas-Fort Worth’s Rosy Housing Market Has a Few Thorns

   Sales of new and pre-owned houses are rebounding sharply this year, and prices are moving higher again. And real estate agents are reporting that in some cases, they are seeing what amounts to bidding wars for choice properties.
By all counts, Dallas-Fort Worth is seeing one of the strongest housing market turnarounds in the nation, a sharp contrast to the declines this sector saw during the recession.

So what could go wrong?
Like everything else, it depends on jobs, the experts agree. “It’s all about the economy,” said Bernard Weinstein, an economist at Southern Methodist University. “The downside risk is that we slip into a double-dip recession or something like it.”
As long as companies keep adding jobs in the D-FW area and folks keep moving here from California and elsewhere, demand for homes will grow. Uncertainties about the world economy and political catfights in Washington could also hold back homebuying, economists say.
“The risk out there is that the broader economy still hasn’t caught fire,” said Alex Villacorta, director of research and analytics at Clear Capital, a California-based housing analyst. “With the election cycle heating up and unemployment still historically high, it could put a damper on things.”
And Villacorta observes that the double-digit increases in housing activity in some markets, including Dallas, are coming off a very low point and probably won’t last. Pre-owned home inventories have declined to just a five-month supply in North Texas, the lowest level in a decade. And there are just 2,735 finished new homes available, a record low.

A shortage of lots and a potential lack of labor could keep the lid on home construction, Crowe warns. If that happens, prices could spike.

“As long as new homebuilding can respond to demand, house prices cannot rise much faster than cost of supply,” Crowe said. “When demand overwhelms that ability, then you get [what the market saw in] 2004 and 2005.” That was when home prices went crazy and fueled a bust.

Steve Brown 
Real Estate Editor
Dallas Morning News 

1960s Glitz Bites the Dust as Bulldozers Raze Richardson Hotel

For the last few weeks, I’ve been watching them tear down a landmark in Richardson. Most folks probably think it was just a flea-bitten, hot sheet motel. Good riddance, they are saying. I’m talking about the faded old Continental Inn on North Central Expressway. The city of Richardson recently bought the old motel just north of Spring Valley and has wasted no time knocking the place down.
But I keep seeing the way it looked back in the 1960s, when there were palm trees out front and fancy cars pulled up under the neon-lit porte cochere. Back then it was called the Dallas Continental Inn — even though the property was in Richardson. When the motor inn opened in 1961, it was considered one of the most deluxe accommodations in the Dallas area.
The Continental Inn cost almost $2 million to construct and was a big hit with travelers along U.S. Highway 75. I remember looking for the building’s colorful exterior and lighted signs when we traveled along North Central heading up to Grayson County to see relatives.
The property was complete with a deluxe restaurant, private dining rooms, swimming pool, landscaped patio and playground for the kiddos. A Continental Inn courtesy car was on hand to run guests to downtown Dallas to shop at Neiman Marcus.
The hotel for years was a favorite venue for wedding parties, class reunions, and meetings of the Rotary Club, builders associations and the like. The Continental Inn and the smaller Como Motel across the highway competed for business with flashing signs and promises of “refrigerated air” in the rooms.
But by the 1980s not even the allure of air conditioning and color TVs could bring first-class guests to the Continental Inn. In recent years the place has been pretty forgettable, covered in coats of beige paint and advertising rooms at $32 a night.
Richardson wants to redevelop the former motel site as a restaurant park with four buildings fronting along the highway. Hermansen Land Development is marketing the triangular property as a “one of a kind” opportunity.

Steve Brown
Real Estate Editor
Dallas Morning News 

Thursday, September 06, 2012

ACS seeks redevelopment zoning for big Dallas property

The owners of a business campus on North Central Expressway in East Dallas want to rezone the property for a major mixed-use development.
Affiliated Computer Services — a unit of Xerox Corp. — is asking the city of Dallas to rezone its 26-acre property at Haskell Avenue and North Central.
The campus is just north of the Cityplace development and has five office buildings and a data-processing facility.
ACS is asking the city to rezone the property for a development that would include almost 2,000 apartments, a hotel, retail and commercial buildings, medical facilities and office space.
ACS says in filings with the city that it is seeking the zoning to “facilitate future redevelopment,” but it says the “campus will remain intact for the immediate future.”
The property has about 650,000 square feet of office space, including a prominent 12-story building at the corner of Haskell and North Central.
The campus originally housed the headquarters for Southland Corp., which owned 7-Eleven Inc. Southland built the Cityplace complex next door and moved its operations there in the late 1980s.
ACS has owned its property, which extends along North Central from Haskell to Carroll Avenue, for more than a decade.
In 2010, Xerox acquired ACS in a $6.4 billion deal.
Since then, real estate agents have speculated that the complex might be downsized or consolidated in another location.
Brokers have also said that Xerox representatives have asked them about the potential for a sale of the property.
Getting the campus rezoned for multiple uses would improve the value of the real estate. The property is valued for taxes at more than $20 million.
“It makes sense to clean up the zoning into one classification that would be consistent with nearby properties such as the Cityplace,” said Kevin Lightfoot, ACS’ vice president of corporate communications.
“Redevelopment or a sale could be an option, but at this time Xerox plans to continue operations at this location for the foreseeable future.”

Steve Brown 
Dallas Morning News

Design District apartments in Dallas sold

A rental community in Dallas’ booming Design District has been purchased by a North Carolina real estate investor.
Bell Partners Inc., a nationwide apartment investment and management firm, bought the 4-year-old Alta 1900 Lofts at Hi Line Drive and Oak Lawn Avenue.
Bell Partners bought the 3.7-acre apartment complex from developer Wood Partners, which built the four-story project.
Terms of the sale were not disclosed. The property is valued on the tax rolls at $26.9 million.
The rental community has been renamed Bell Design District.
“As we continue to build out our portfolio in select target markets, we are pleased to acquire this well-located, high-quality property,” Jon Bell, president of Bell Partners, said in a prepared statement. So far this year, the Greensboro, N.C.-based investor has acquired more than $330 million in apartment properties around the country.
The 35-year-old company has almost $5 billion in properties in 16 states with more than 68,000 apartments.
The Design District apartments property that Bell Partners purchased was one of the first new rental communities built in the former industrial area northwest of downtown Dallas.

Steve Brown
Dallas Morning News

Company leases Uptown Dallas office space

Uptown’s 17Seventeen McKinney office tower has landed another major tenant.
 TopGolf Inc. – the golf entertainment firm – has rented 14,350 square feet on the eighth floor of the building, which is located just north of Woodall Rodgers Freeway.
 _Along with another recent 25,342 square-foot lease to advertising firm Ackerman McQueen, the deals have taken the building owned by Granite Properties up to 65 percent leased.
TopGolf is moving its headquarters to Dallas from Chicago.
 The company currently has seven of its entertainment facilities – including two in the Dallas area. The centers combine an interactive golf experience with a restaurant and sports bar.
Granite Properties high-rise is currently the only new office project in lease-up in the Uptown market.
Several additional buildings are planned.
“Location matters, and Uptown is the place to be, especially with Klyde Warren Park opening” this fall, said Granite COO Greg Fuller. “We’re seeing a lot of activity.”
Ackerman McQueen is moving its Dallas-area office from Las Colinas to 17Seventeen McKinney in March.
Steve Zimmerman of The Retail Connection and Chris Herrmann and Harlan Davis of CBRE Group negotiated TopGolf’s lease in the building. And Scott Collier and Greg Burns of Jones Lang LaSalle represented Ackerman McQueen.
Robert Jimenez and Jim Kirchhoff represented Granite in both property negotiations.
Earlier this year, international business consulting firm Bain & Co. leased two floors in the 17Seventeen McKinney building. Bain moved its offices from Las Colinas.
Other tenants in the building include Colliers International, Huitt Zollars and Red Bull.

Steve Brown
Dallas Morning News

Tuesday, September 04, 2012

Klyde Warren Park GRAND OPENING

Park Contact: Joanna Singleton
Jackson Spalding
 (214) 269-4401
Grand Opening Contact: Tony Fay
Fay + Sawers Productions
                                                                                                                          (972) 273-0794


Festivities are open to the public and set for Oct. 27-28

DALLAS (September 4, 2012) – North Texans will celebrate the grand opening of Dallas’ new “front lawn” with a free two-day celebration made possible in part by Chase. The Woodall Rodgers Park Foundation today announced that the financial institution has signed on as title sponsor of Klyde Warren Park Grand Opening Celebration, slated for Saturday, Oct. 27, and Sunday, Oct. 28.

“Klyde Warren Park is taking shape as a beautiful oasis right in the heart of Dallas,” said Elaine Agather, Chairman of Chase in Dallas. “Together, we are creating something lasting that future generations will enjoy with their children and grandchildren.”

In February 2010, Chase donated $3 million for the park’s construction, becoming one of the key donors in the final phase of the project’s capital campaign. Chase has 15,000 employees and 242 branches in North Texas.

Said Jody Grant, Chairman of the Woodall Rodgers Park Foundation: “Chase stepped up during our capital campaign and showed an incredible commitment to making the Park a reality. They have been wonderful partners, very interested in supporting our ongoing programs. They were also very excited to be involved with the grand opening. Their underwriting, as well as the financial commitment of all our opening weekend sponsors, will help us stage an event that allows thousands the opportunity to participate in the historic opening of this wonderful new urban retreat.”

Highlights of the two-day Grand Opening festival, which will spread across the Park’s 5.2 acres and adjacent Arts District, include a dedication ceremony, an outdoor performance by the Dallas Symphony Orchestra, a Saturday evening concert on the Great Lawn’s Muse Family Performance Pavilion and sneak peeks at the Park’s on-going programming. The opening will coincide with the final weekend of Art in October, the annual celebration of the Arts District.  

Film actor and Dallas native Owen Wilson serves as the event’s Honorary Chair.

Further event details, including entertainment schedule, how to obtain free tickets for Saturday night’s “Concert for Dallas” and parking instructions will be announced in September.

Additional Grand Opening sponsors include: Fossil, Oncor, Sheila and Jody Grant, Museum Tower, Texas Capital Bank, Tenet Healthcare/Melissa and Trevor Fetter, Hunt Consolidated, Nancy and Randy Best, TXU Energy, Ernst & Young LLP, 2000 McKinney, Albertsons, Boardwalk Auto Group, Carlson Capital, LP, Vinson & Elkins L.L.P., Coca-Cola Refreshments, Ducky Bob’s Event Specialists, GoVision, Hall Wines, Ben E. Keith Co., Kirtland Records, Potbelly Sandwich Shops, Republic National Distributing Co., Todd Events and DJ Lucy Wrubel.

# # #

About Klyde Warren Park
Klyde Warren Park will serve as a central gathering space for Dallas and its visitors to enjoy in the heart of the city. The 5.2-acre park will create an urban green space over the existing Woodall Rodgers Freeway between Pearl and St. Paul Streets in downtown Dallas. Plans include a performance stage, restaurant, shaded walking paths, a dog park, a children’s garden, great lawn, water features, an area for games and much more.

To volunteer or make a donation, visit www.parkdallas.org or call 214.716.4500.

Uptown hospital building sold

A Florida-based real estate investment trust has purchased an Uptown medical complex.
Carter Validus Mission Critical REIT Inc. paid $31 million for the Baylor Medical Center at Uptown, an acute-care hospital at 2727 E. Lemmon Avenue at North Central Expressway.
The 3-story, 62,000-square-foot medical project was built by a unit of Duke Realty, which sold the property.
The facility opened early last year on the site of the old Mary Shiels Hospital and contains 24 in-patient beds, six operating suites, a four-room emergency department and a medical imaging center.
"We consider the tenants of this facility, Baylor Health Care System and United Surgical Partners International, to be two of the most respected names in the healthcare arena and we are excited to add this property to our portfolio of mission critical real estate assets,” John Carter, CEO of Carter Validus Mission Critical REIT, said in a statement.
Carter Validus Mission Critical REIT was formed in 2009 and invests in income-producing properties including data centers and healthcare facilities.
Carter Validus in August bought the Texas Data Centers at 1221 Coit Rd. in Plano and 5000 S. Bowen Rd. in Arlington for $45.9 million.

Real Estate Editor

Dallas Morning News