D

Dallas Real Estate Construction: Is Green The Next Bubble?

From the looks of my landscaping bill, yes — that’s my dead Cherry Laurel by the front door.

Lovely.

Talking green innovation and building, this author says hell yes.

Don’t Faint: A Shortage of New Construction In Dallas Real Estate?

That’s what Steve Brown wrote Friday, but this little quote peeped right out at me because I’ve had this nagging fear —

“Tim Jackson, a Collin County custom builder who is president of the Home Builders Association of Greater Dallas, predicts new-home prices will rise next year unless starts increase.

“We just can’t get the funding to start new houses,” Jackson said. “I’m fortunate to have a good relationship with a local lender, and they allowed me to start a speculative home four or five months ago.

“But I doubt they would allow me to start another one,” he said. “Even if we have a customer who wants to build, they are oftentimes finding it difficult to find construction financing, too.”

What’s my fear? That all the elements putting the brakes on the market — in effect, constipating it — will ultimately raise prices on construction costs, new homes, taxes, closing costs, materials and labor so much that homes will be out of the average or lower-income individuals grasp.

Dallas Real Estate: Is The North Texas Condo Market Finally on its Knees?

The Fort Worth Star Telegram’s Mitchell Schnurman says yes, that both Dallas and Fort Worth share a glut of condos but that Dallas is in more trouble because we have more unsold units — more than 400 vacant properties, a host of million dollar plus homes, and about one foreclosure for every four condo units posting.

It could be worse — we could be Miami. And I’ve heard that condos in Austin are moving like molasses, this in a town where parents often buy real estate for their UT undergrads.

I agree with Schnurman and the folks he consulted — Residential Strategies’ Ted Wilson and RECON’s James Gaines: too many condos were built. They knew it, we all knew it. As I was purging papers for our move to Saint Paul Street last week,  I found a brochure from the Cresta Bella — remember that? And Museum Tower was supposed to break ground this spring or fall. Schnurman says Mandarin Oriental pulled the plug last summer; I heard the writing was on the wall last March. And a reader asked me this week what, if anything, could be done with that sad Stoneleigh Residences shell — the ghost condo is the view from her front window. The Ritz opened The Tower Residences last Tuesday — all of phase one sold, though re-sales are slow and have seen two foreclosures, and the new 95-unit Tower Residences has 30 units left to sell. (David Farmer reminded me how bullish I was on the Stoneleigh; I still think it’s an excellent location for a high-rise. I asked what they thought would happen to that shell — nothing, I was told, until someone starts lending some money.) What was their secret to success? Great timing.

Here are the problems: a lack of financing in the jumbo market  ($417,000 or above in Dallas); if you do obtain funds, getting an appraisal through the new Home Valuation Code of Conduct; and in fact getting any money at all. Buyers are also skiddish over HOA’s, which I hope to examine more on this blog.  But why do lenders get the heebie jeebies still with Dallas condosl? Last Wednesday night at The Travis, one of the developers told me it was like pulling teeth to obtain financing on those units, but they did get a bank to sign on. I maintain that the real estate market would be a whole lot healthier if the lenders would just start lending again — not to anything that has a pulse, but to qualified people.

The good news is that Dallas now has 30,000 people living downtown — and I saw with my own eyes last weekend how we are becoming a city that never sleeps. (Yes!) The units will get absorbed, but it will take time, a few foreclosures,maybe even an auction or two.

Meantime, hold the cranes, please. Just please pass the credit.