The West 7th development.

A young friend of mine named John J. Stathas is a law student over at Texas Wesleyan Law School in Fort Worth who has been telling me for awhile why he loves Cowtown. I mean, Fort Worth. So I asked him to write it down and tell me why:

Slowing sipping on an ice cold bottle of Shiner the warm gentle October sun bakes down on my skin with that all important Vitamin D.  The soft twang of an acoustic guitar slices through the ambient chatter.  The smell of red meat on a grill tickling my nose.  If you ever find yourself in such a scenario then you’re likely over here in my town, Cowtown.

I can’t say exactly where I am though.  Not because I’m sworn to secrecy or anything, but because I could be at any number of locations nestled along the Western edge of Fort Worth in the new exciting community known as West 7th.

It’s no secret these days that Texas has become the fastest growing state in the country.  And no city has benefited more from this population boom than Fort Worth.  From 2000 to 2006, Fort Worth saw its population increase by 20%.  This trend has not tapered off either.  Some estimate the current population to almost double in the next 20 years.

We all know that our state’s economy is the major driving force behind the overall explosion, but why has Fort Worth seen such a tremendous benefit?  In this writer’s modest opinion it’s simple.  Fort Worth provides a new and attractive alternative to other cities around the state.

More and more these days people (especially us young ones) are looking for that perfect blend of urban and modern.  The Urban Village is making a comeback all across the country and Fort Worth is right in stride with the trend.  Fort Worth has several areas where this cultural change is happening, but none as rapid as West 7th.

Simply put, it’s the place to be.  Old staples like Chimy’s Cerveceria and Fred’s continue to attract, while new spots like Tim Love’s Burger Shack (known affectionately as “Love Shack”) seem to be popping up almost daily, providing new places to discover.   I hesitate to begin enumerating all the local establishments because there are just too many.  Each bar or restaurant has it’s own unique vibe, yet the patrons seem to all be from the same crowd.  Just young-hearted people all searching for their daily peace of mind.  And in West 7th they easily find it.

From burgers and beer to high end dining, West 7th has it all.  A place where you can live, eat, play, and walk to it all.  And no, that’s not a typo, I said walk.  Believe it or not, Texans are quickly discovering the simple joys of walking places.  This is perhaps the greatest achievement of the Urban Village movement, although personally I still like the endless amount of bars and restaurants a little more.

So the next time you feel like enjoying a cheeseburger on a patio, margaritas in the moonlight, or just a simple stroll through a bustling neighbor, take a look at West 7th out here in Fort Worth and I think you’ll be pleasantly surprised.

“The “Had Enough? Vote Republican!” model is so popular this fall, you’d think a kind of amnesia gas is seeping out from our storm-sewer drains. But then a strong sense of the past has never been a signal feature of the Dallas psyche.”

The Fountains also live about a block from the tollway in a 1960′s era house, so the “amnesia gas” could be auto pollution.

I spent the better part of my day talking about “Z” sales with experts, because I have been concerned about them for awhile. But now I am more concerned. I received an email from my AOL HousingWatch editor asking for a story after they got Fountain’s piece through Google : what’s this Z price stuff? Is keeping low-selling prices out of the computer system building a level of unreality into Texas real estate, what Fountain calls “poisonous”?

“It’s poisonous,” my friend Mark Kreditor told me over lunch, speaking of the Z phenomenon. It might help support the market in the short term by keeping lower prices out of the system, “but it’s like a drug that keeps you pumped up — after a while it catches up with you.”

I don’t think Z sales are supporting the market at all, and neither do many of the people I spoke with. And I’m concerned that Fountain’s “reporting” has not been accurate. (Note to self: send letter to CU classmates at NYT.) Veteran appraiser DW Skelton has been talking about Z sales for years, saying they are hurting our market values, not keeping prices artificially high.  As I have told you before:  Realtors “Z” out a home’s selling price to keep it confidential, non-disclosed. The last listing price of the home goes into the computer. D.W. tells me appraisers are not permitted to use “Z” sales for a primary comparable unless the sales price is in a public data base. If “Z”d out, it’s not public. The new appraisal management companies that have come about as a result of the HVCC also do not use “Z”d sales. It can only be used on a HUD 1 secondary form. “Z” sales could, in fact, be slowing our market down.

Non-disclosure may very well be a Bible Belt leftover. It was intended, say experts, to keep the taxing authorities from knowing the price of the home for taxing purposes and also to keep homestead sellers from revealing to neighbors how much they paid for ranch land. Or, in later years, keep people at church or in the boardroom from knowing how much you paid for your mansion.

“At one time it worked, ” says Skelton. “In my opinion, it doesn’t, anymore.”

If a home sells for less than listed, MLS numbers do not reveal the actual sales price and are therefore not accurate. If the home sells for MORE than listed price, and the sale price is “Z”d, the market is also artificially, and incorrectly, low.

Bottom line: “Z”ing  is keeping appraisers from having accurate numbers, particularly in high-end sales. Would you buy a stock if you only know how much 50% of the buyers paid for it?

We looked at the MLS sales for Preston Hollow, 9/2009 to 9/2010: 27 sales over $2,000,000, 45% “Z”d out.  Park Cities, same time frame, 50 sales over $2 million, 25 or 50% “Z”d out.  The more expensive the property, the more “Z”d out sales: 8 properties $5 million and over sold in Highland Park in this time frame, 6 prices were “Z”d out.

So who cares, let the rich get screwed on their McMansions, they can afford it. The “Z” phenomenon is spreading, as Kreditor points out. Lakewood, area 12: 134 sales of homes $500,000 and above, and 18 were “Z”d sales. But of 10 homes that sold for $1,000,000 and more in Lakewood last year, half were not reported. Plano: 18 sales  over a  million last year, 7 or 40% “Z”d out.

So it looks like even homes in the $500K range can be ripped off by this non-disclosure. Another agent had more good points:

“As for the non-disclosure issue that this author brings up, with so few sales out there, it could cut both ways. If you don’t disclose because you’re trying to hide what you paid, you potentially could end up hurting your own value if you had to sell within a year or two. As an agent, I do use prior sales of a potential listing in order to get a feel for what it should expect to sell for now, depending on how long someone has owned it, that’s a helpful tool for the seller and myself. As an agent, it’s very hard to guide a seller if the best sales out there were not disclosed and obviously, when the appraisal is done, the appraiser can’t use those sales, either. I think as agents, we shouldn’t be encouraging this but as a buyer, it is your right.

I do take issue with the author saying that Dallas is “not a normal market”. I’d ask him to describe a “normal” market right now. Are Las Vegas or Phoenix where prices have plummeted, “normal”? None of the country is experiencing normalcy at the moment.

I also happen to think it makes a huge difference in the part of Dallas you’re investing in…in every city there are better parts of town to make an investment than others. I’m curious, if this is such a bad city to own rental properties in, why do it? Why hasn’t this person-Mark Kreditor (kinda a funny name considering the subject at hand)-sold his Dallas investments and gotten out of this “cesspool”? I assume there is some sort of upside or he wouldn’t own anything here at all. I mean, he’s had 20+ years owning property here according to the article, which one would think, is more than enough time to get a feel for the rental climate and practices of renters.

Another point is-do we want Dallas crawling with investors? I say-No. That’s how so many of these markets were so adversely affected by the downturn in the housing market. I don’t think we want speculators flocking here and buying everything in sight up. That might help temporarily but it isn’t a recipe for long term health.”

And this: I’m told that Realtor now must report ALL  sales figures in the North Texas MLS, or suffer a $1000 fine? Anyone know if this is actually happening?

Walking through the front door and past an elegant aquarium filled with exotic tropical fish and coral, you’ll be reminded of Miami. Continue through the sweeping dining room, past the kitchen decked out in Sub-Zero and Wolf appliances and granite-slab counters, and into the dramatic great room floating above the trees, and you’ll get a sense of New York City design coupled with an upstate New York countryside view. A board conference room and library overlook the pool and forest beyond, perfect for those who prefer to work from home. In fact, with a movie theater, gym, and saltwater infinity “floating” pool just steps away, you never really have to leave the grounds.

Quality infuses every detail of this home: the silent, automated window coverings; the exquisite wood cabinets; the wood-lined elevator complete with a state-of-the-art phone system. In the master suite, which along with an adjacent patio is suspended above the trees, the blinds move with the touch of a finger, and the artfully rendered light fixtures provide peaceful illumination.

But for all its ethereal beauty, Oak Mount Place has rock-solid vitals: built in 2009, the home has 6026 square feet, four bedrooms, four-and-a-half baths, and three decks overlooking the woods and that gorgeous pool and spa. Walls of glass surround the kitchen, family and living areas, but the area is so secluded, those automatic window coverings might not even be necessary.

This house—designed by Mark Domiteaux, built by Ron Smith of Quorum Design + Construct, and expertly decorated by Ron’s wife, interior designer Abby Smith—would be right at home in Malibu. Lucky for you its owners chose North Dallas, where it’s available for a mere $2,750,000 (in Preston Hollow it could easily fetch $5 million). Before you sneeze at the price, go see it. Very motivated sellers who have put their heart and soul into this home are ready to say goodbye, and I have to tell you, the interior rivals that of a certain famous white house on Northaven Road.

Listed with Suzy Hotchkiss of Ebby Halliday.

It’s going to be tough, and you have a choice: either redo the bath and then sell the home, or lower your price because you have a second class master bath. But you can implement some quick, fairly cheap tricks to make that second class bath look like it might be able to fly business class, at least in photographs. Then, my dears, you can go all out and call it a SPA BATH.

1. Use light colors. Got icky dark wallpaper from another century on the walls? Spend some money here getting it off and getting the walls glazed and painted a light color palette — whites, creamy beige, yellow or light seafoam green. (No hospital greens here, please.)

2. Add simple black and white photographs of ocean waves on the walls. (Yes, you should have art in the bathroom.)

3. Use all white towels and fabrics, white bath mats and rugs. Gives it that clean, crisp, super sanitary feel. It goes without saying to replace the shower curtain if you have one.

4. Play calming music in the master bath at all showings,

5. Accessorize: fill clear glass cylinders from a florist with seashells or river rock. Roll towels and arrange in a pretty hemp basket. Don’t over-do the towels. You can also roll towels into open shelves to conceal bathroom clutter. The only color you need on the towels should be the monogramming on hand towels.

I know what you are thinking. I have a husband, yes. I keep a roll of paper towels under every bathroom sink and have trained him to use those rather than soil my $50 hand towels.

6. Slick trick: invest in a towel warmer — all you need is an outlet. Adds an extra oomph to your bath verbiage: “Spa Bath with towel warmer!”

7. Buy a new toilet seat. What are they, $20 at Loews? Like a face-lift for your commode.

All of which means Kari and Kirby’s 29th floor W condo is back on the market and now reduced to $10, 750,000. From 11,750,000. Go for it!

But I was shocked to see that Forest Lane was number 69, with 939,146 annual hours of delay that cost us $20.43 million, and Lemmon Avenue number 67 on the list with 297,671 annual hours of delay that cost us $6.47 million.

So much for saving time and fuel costs by living close-in. Jump for the chart:

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“In 1988 he was lured away from Six Flags to become president of the nonprofit State Fair of Texas, where, in 2008, his total compensation for overseeing the three-week spree of pig shows, fried food, and midway rides was $758,918.”

That is apparently high for folks in his field. And I can tell you, that’s way higher than most physicians with umpteen years of education make. Ditto many CEO’s and attorneys. Further, the State Fair of Texas is a non-profit that is not exactly going gangbusters — it’s losing money (on paper). I quote the brilliant Will Arbery yet again:

“If McKoy deserves his handsome compensation, as (Tom) Dunning believes, shouldn’t the State Fair have more to show for it? Shouldn’t it be adding to its cash reserves for a rainy day (or month), instead of operating at a loss on paper—especially since the fair’s ability to pay its $1,150,000 annual rent to the city depends on its financial health? Most of the State Fair’s profits get “pumped back into Fair Park,” as both Dunning and McKoy put it, pointing to the numerous roof renovations. McKoy describes himself as merely a tenant of Fair Park. His fellow Fair Park tenants, as it turns out, are among the few willing to voice any displeasure with McKoy and his managerial style. They have what could best be described as an uneasy relationship.”

I see this as a real estate story, for several reasons. I found out that full time tenants at Fair Park, like the Dallas Summer Musicals, have to pay the State Fair more than $100,000 for parking even though the State Fair is in operation only six weeks of the year. Will’s article said something to the effect that the State Fair crowd helps increase the visibility of folks who might attend the summer musicals, but the last time I saw your typical State Fair type reveler with fried turkey drumstick in hand at a musical, well, I cannot tell you. Little in congruent.

And then there’s this: the State Fair requires that FP business tenants must vacate the premises for three months a year. What the heck kind of a real estate deal is that? In my humble real-estate saturated opinion, Fair Park could be a vibrant home of commerce and entertainment for 365 days a year. The architecture is gorgeous — and next might come re-gentrification of the ‘hood surrounding which is not, to tell you the truth, very pretty right now. The home pictured here is listed for $28,500. Exception: a little pocket of great townhomes on Commerce, 3800 block and at least one buyer sinking SERIOUS dollars into a home down there, last I heard. It’s all very do-able, and the tax revenues bouncing off this could be a huge boost to our fair city.

But no, we’d rather raise property taxes and throw everything on the backs of the homeowners.

So I looked up McKoy’s home, and turns out he lives in fairly modest digs for a guy bringing in more than $700K per year before taxes. He’s over in Lake Forest:  house valued at $1,060,900. Bought it in 2003 from Forest Hillcrest Partners. The old rule of thumb was that you could afford a home that was about three times your annual income. For McKoy, that would be a home worth $2,100,000.

Maybe he’s just really conservative.

In a few hours you will have a rare chance to go behind the locked, guarded gates over at The Creeks of Preston Hollow. This is a once-in-a-lifetime chance to enter those pearly Hillwood gates at Inwood Road and Royal Lane. It just so happens Erin Mathews and the Mathews Nichols team has  snagged listing the ten remaining building sites at the Creeks of Preston Hollow, and she’s having a very rare open house today (Sunday) from 1:00 to 4:00 p.m. We are talking primo Preston Hollow building lots, most homesites more than one acre, at recently reduced pricing ready to rock and roll. If you’ve always wanted to see inside The Creeks but found the gate and guard forbidding, today’s your chance.

Note: I’m wrapping up a visit in Pebble Beach at the Concours D’Elegance and will be bringing you vacation House Porn Supreme in a few. Was in a to-die for home overlooking the Pacific yesterday… stay tuned.

I have many European details (daddy was from the Mediterranean, but mama was French),  I am a custom-built home on large corner lot, kind of like an artificially inseminated but perfect baby. I have smooth as silk hand- finished walls, nine-inch mouldings (wowzers!) , over sized windows, vaulted ceilings. In other words, I am a big, beautiful woman. My yard is fenced, about 150 by 200 (huge clue right there) with an outdoor kitchen and waterfall pool that muffles all noise, not that you get that much in my ‘hood. Also, I am under two million dollars,  but priceless.

Where am I?

“Lawyers and other representatives for the owner/developer and lender declined to comment.”

(Note: sometimes if an attorney refuses to talk to a journalist, we assume the client, in this case, Crescent, won’t talk either.)

Pitchford and Allie Beth Allman’s Kyle Crews, who is marketing the Tower Residences, also disagree with statements made in the article by Mike Puls, a well-known and respected Dallas condo consultant, that one of the biggest hurdles facing condo sales at the Ritz and elsewhere are appraisals:

“Part of the problem is that the Ritz-Carlton condos, like other $1-million-and-up condos in Dallas, are priced substantially higher than they’ll appraise for, which prevents buyers from getting loans and gives pause to wealthy buyers who don’t need loans but still don’t want to overpay, Puls said.”

Appraisals are one of the dirty little secrets of this turmoiled market, as one local appraiser has told me. What once took 30 days is now taking 90 or more, delaying sales, though many Realtors don’t like to talk about it. Even so, Pitchford tells me that the Ritz is having ZERO PROBLEMS with appraisals, averaging $720 a square foot, but some — gulp — even higher!

“We have closed 15 Ritz Carlton Residences so far in 2010, valued at over $24 million….we are off to a great start,” says Pitchford. “The second half of the year looks even stronger and we really feel great despite the challenges of 2009.”

Thirty-five units have closed in The Ritz Carlton Tower Residences, and 18 of those buyers obtained mortgages on the homes. (The rest were cash sales.) Pitchford tells me all 18 appraised at or above contract price.  Comps are coming from cash sales, the first phase of the development, which is now sold out, and from surrounding areas such as Highland Park, making adjustments for land. Not to diminish phase I, but Ritz Carlton Tower Residences is a costlier animal, says Pitchford; units were build when costs were higher, the project came on later in the boom cycle and features more amenities, such as it’s own pool. The average size of RCTR units are smaller, 2000 square feet,  versus 3000 square feet in phase I.

As for the lawsuits, Pitchford could not comment — the first one has been settled, second pending, but he wonders whether DBJ’s Hethcock even read Crescent’s response to the De La Cruz petition.

A source who wishes to remain anonymous because she sometimes works with Crescent/Ritz tells me that Crescent and the Allie marketing team are 100% cooperative on supplying all information for appraisals — other condo units are not as cooperative. Still, she says, it is hard to apply 2008 values in 2010. Both Pitchford and Crews claim appraisals are not problematic at The Ritz, but that’s not the case elsewhere.  The  Home Valuation Code of Conduct, or HVCC, implemented last May, was designed to “enhance the integrity of the home valuation process”.  Agents and appraisers tell me it is, in reality, a huge backwards swing of the pendulum to counter all the loose-goosey lending and appraisals that went on during the boom. (What agents hate: you get stuck with “impartial” appraisers from Nebraska appraising local properties, like the guy in a turban who went over to the Mayfair recently and didn’t know that the counters in the kitchen were made of granite because he had never seen granite in Garland.) It applies only to FHA financed properties, which are well below even the cheapest unit at The Ritz. But private investors lending out jumbo money are even tougher than the feds — if you cannot provide investors with all information, solidly fresh comps, it is very, very difficult to make value on these properties, especially condos. The culprit is the market: in order for it to get healthier, buyers need to be able to obtain mortgages on properties. Washington is window dressing and shouting that  it wants to help, but in reality, current federal policy is making home financing harder than ever, which I think is going to crimp the market even more.  Sayōnara.

“People live in New York because it is like no place else — pulsating with life, energy and a wealth of choices — but there is some recognition among city planners that it could be a kinder and gentler place in which to grow old.”

Today I interviewed a realtor, Michael Hall, who specializes in the Upper West Side. Manhattan, he told me, is becoming an island of wealthy, suburbanized families. They tend to flock to the Upper West Side, where they buy 3 and 4 bedroom apartments at $1000 a square foot and send their kids to private schools.  

School-aged kids today, but by 2030, the number of New Yorkers age 65 and over  is expected to reach 1.35 million. That’s a 44 percent increase from ten years ago. New York is wisely thinking of its pocketbook. With a third of the nation’s population  over 50, guess who holds the purse-strings and half the nation’s discretionary spending? So it might be well worth a few modifications, slowing down a few traffic lights, adding a few art classes and some extra benches and bathrooms, those necessities of getting old.

“What people say they want most of all is to live in a neighborly place where it is safe to cross the street and where the corner drugstore will give them a drink of water and let them use the bathroom. They ask for personal shoppers at Fairway to help them find the good deals on groceries. They want better street drainage, because it is hard to jump over puddles with walkers and wheelchairs.”

Interesting to be experiencing this when I read that some folks in Casa Linda are suing to block a senior citizen center from being built on Tranquilla –things not so tranquil on Tranquilla Road, apparently. Of course that may be a different situation, and certainly life for seniors in Dallas will be much different from life in New York City.  But it got me to thinking: How will Dallas prepare for the onslaught of seniors? Will they all live downtown, how will they get around, walkers and all, and will Dallas be a good place to grow old?

Thank GOD I can still get TaTa tamers and peroxide at Ulta.

What he told me was fascinating and a good lesson in looking below the surface of a recession. Because believe it or not, smart people manage to make money even when the sun isn’t shining so brightly. And the Heritage success story is really a real estate story: their expansion came about in part because they got some good deals on real estate, because of the recession.

Heritage may have started as a coin auction house, but they now sell art and antiques, coins, currency, entertainment memorabilia (which is going gangbusters), historical, stamps, jewelry and time-pieces, movie posters (ditto), natural history, rare books, and sports collectibles, 30 categories in all. They opened a gallery in Beverly Hills Feb 1 and are opening — are you ready? – another new location on Park Avenue and 57th Street in New York City September 1. We are talking the highest rent district in the U.S.A. Sotheby’s and Christie’s might as well take a ten year coffee break.

September 16, 2008: the day the financial markets started to crash. Greg Rohan has it etched in his memory. He says he was with one of his biggest clients shortly thereafter and asked how he was doing.  I’m down a half a billion, the client said, but I don’t have to start flying commercial yet.  Naturally, Greg wondered how clients would react post 9/08 and how Heritage should position itself. For all wealthy people, he says, the recession was a wake-up call. Some had to lower their style of living to fly commercial first class rather than private, others had to fly coach.  And buying habits changed, too, except that people who have the collecting gene have it during lean times as well as fat.  They collect but steer towards the rarest of the rare items across the spectrum, not so much common items. Common means items that will always come along, like a bus.

Because of that, as far as collectibles, today the best of the best is still worth as much or even more than it was pre- September 20, 2008. Really good items are worth maybe 10% less than pre-crash, common items are generally worth 15 to 25% less.

Rohan thinks that about June, 2009, people settled into their new-found wealth status (worth less on paper, well you can’t take it with you) and adjusted, hence started spending again. And collecting. That’s where the uptick came from.

“I think Dallas is indicative of the rest of the country,” says Rohan. “If it’s something they want, they’ll buy it.”

Even better: Rohan knows folks who made money — they sold collectibles in early 2009 at a 15-25% loss then turned around and bought stocks and real estate that had dropped 50% or more.

And Heritage had always wanted to expand to the east and west coasts but never anticipated opening both offices simultaneously. Voila, the real estate market had dropped so much that a well established company like Heritage, with solid gold credit, negotiated leases with a big stick , 35% off Beverly Hills, a whopping 50% off Park Avenue.

Which is now fueling their expansion. The company’s business has expanded over the last ten years, averaging a steady growth rate of 10 to 15% a year, this over the greatest recession since the Great Depression.

Which is why I picked up the phone.