townhome sales

Condos and townhomes are hot properties in DFW so far this year.

North Texas condo sales increased 3.8 percent year-over-year to 1,536 condo sales during the January to May 2016 timeframe. Townhome sales increased 8.2 percent to 1,019 townhome sales during the same period, according to the 2016 Texas Condominium Mid-Year Sales Report by the Texas Association of Realtors (TAR). DFW is the only major metro in the state where townhome sales increased.

“Many young urban professionals and newly retired baby boomers are buying condos, as they provide an affordable alternative to single-family homes and townhomes,” said Leslie Rouda Smith, chairman of the TAR. “These Millennials and retirees don’t want the upkeep of a traditional, single-family home and want to be close to nightlife and amenities.”

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Single Senior Men: You May Never be Lonely or Hungry Again

Single Senior Men: You May Never be Lonely or Hungry Again

In last week’s second of three articles on high-rise demographics, I wrote about Dallas’ youngest high-rise populations. I noted that in those younger buildings, there were usually high rates of non-homestead owners – some as high as 75 percent. I think non-homestead ownership is worth noting because, in addition to owner age and worth, it gives an idea about how these owners react to changes.

Owners claiming a home as a second shelter (subtle, eh?) may be more likely to support (or at least not block) building improvements because they’re less likely to be constrained by wealth (or a lack of it). This may differ from investment/rental property owners who are managing a spreadsheet and are more likely to have a cautious mindset (while still acting to protect their investment).

In Dallas’ oldest high-rise populations, non-homestead ownership is much lower – 13 to 29 percent to be exact. The other difference is building age. The “oldest” of the young buildings were built in the 1990s whereas the “youngest” old buildings was 1984’s Claridge with the overwhelming majority built in the 1950-60s.

In fact, the only buildings from the 1950s-1960s first high-rises not included in the oldest category are those that support a much higher average for non-homestead, rental units. This means the true age makeup of ownership for Preston Tower, “21,” and Turtle Creek North is obscured. I say that these buildings have a high percentage of rentals (versus second home owners) because they have smaller, cheaper units that are easier for smaller investors to purchase.

As of this writing, four of six MLS listings at Preston Tower are rentals. This equates to 67 percent of listings – and that’s just the MLS, other rentals are surely available via other avenues. At “21” the rental listings equal 50 percent.

So where should whist-playing buyers go? How about frisky widowers desiring the pick-of-the-litter of older paramours tussling over who delivers the first “welcome” casserole with a breakfast chaser?

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SoCo Urban Lofts at 1122 Jackson St. has one of the highest ratios of young residents.

SOCO Urban Lofts at 1122 Jackson St. tends to attract a younger crowd compared to Wyndmere.

In the first part of this series I wrote about how unit prices, resident age and income are data points for high-rise buyers to consider before purchasing their castle in the sky. The reason for these calculations is to better understand if a building matches a buyer’s philosophy. Of course this information doesn’t produce a complete picture. It’s also incumbent on any buyer to meet with the building manager of any high-rise under consideration to understand the personality and finances of the building. But much like employment references where many are non-committal rather than honest, it may require astute reading between the lines.

Younger buyers may be more open to change, maintenance, and improvements. But they may also have economic constraints the further away they are from peak-earning years. Meaning that buildings with high proportions of owners in their 20s and 30s may suffer from the same economic paralysis as buildings with majorities in their 70s and 80s. The difference being the younger building will WANT to do new things but can’t.

So, how do you find a building with a sweet spot age range? Jump for more.

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Census Age Distribution Dallas

This is the first of a three-part series on high-rise demographics. In this first part, I’ll cover how resident age, personal finances, and cognitive decline form an intersection that should help buyers better understand a high-rise. These factors are certainly in play in all neighborhoods, but the communality of high-rises makes them more acute. After all, when talking about single-family homes, a neighbor’s leaking roof has no impact on your home a block away.

According to the US Census, the age distribution in Dallas is such that 62 percent of residents are in their home-buying years. The remaining 38 percent are under 24 years old and, aside from trust fund babies, unlikely to be buying real estate.

In Dallas, 9 percent of the population is over 65 years old, empty (or never) nesters with many looking to downsize from suburban family factories to a smaller, more urban, lower-maintenance existence. It’s the “oh crap, the kids are gone – I need SOMETHING to do besides Applebee’s and a movie” syndrome. Otherwise known less charitably as, “the skid mark to Sparkman.”

And then there’s the largest demographic with ages ranging from 25 to 64. This is a big bucket ranging from “starter home” to “forever home” to “next forever home” to empty nest downsizers. Being the largest and most mobile, it’s also the most active in terms of buying and selling.

Since leaving college 30 years ago, I’ve lived in nine homes in five states, (ten/six, counting my second home). All except Dallas were forced career moves. That kind of movement places me clearly above the average (but you suspected that all along, right? 🙂 ).

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Texas Condo Report Mid 2015 Graphic

Condo sales are still brisk compared to last year, but sales have decreased an average of one percent between January and May of 2015, says the Texas Association of Realtors‘ recent report. Using data from the Real Estate Center at Texas A&M University, The 2015 Texas Condominium Mid-Year Sales Report shows that condo and townhome sales are flat or slipping in the four largest markets.

With runaway demand, Austin still leads the price-per-square-foot category, while condo sales actually decreased 12 percent year-over-year in the state capital. Both Dallas and San Antonio posted modest gains of 3 and 6 percent, respectively. Houston condo sales dipped just 1 percent from the same time last year. Jump for more interesting stats.

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Photo courtesy of Ray Bodden

Photo courtesy of Ray Bodden through a Creative Commons license

Texas is the place to be for economic prosperity and job growth, which in turn has made our real estate market one of the best in the nation, according to the 2014 Texas Annual Housing Report, released this week by the Texas Association of Realtors.

Nearly every area of real estate in the Lone Star State continues to get bigger and better, some of it astoundingly so, the report shows. Most notably, growth has happened in luxury home sales, international home buying, relocation activity, condominium sales, and remodeling trends.

“It’s a great time to live in Texas. The high demand for Texas real estate is not being fueled by speculation and investment activity—it’s driven by the thousands of people who move to the Lone Star State daily,” said Dan Hatfield, chairman of the Texas Association of Realtors. “People are moving to Texas from across America and around the world to take part in our state’s booming economy, business-friendly environment, and quality of life.” (more…)

boulder front

Southlake is such a fabulous town, with great schools, incredible shopping, and beautiful neighborhoods. I just love this area, which is perfect for families with school-aged kids. But what if your nest is empty and you’re not expecting a boomerang kid? Downsizing has probably crossed your mind.

That’s what Merlene Ingraham and her husband are doing. They’re selling their barely-lived-in Southlake home and heading closer to Dallas, like many Baby Boomers, so they can be close to the arts.

Boulder staircases

This house is just magnificent, with four bedrooms, four full bathrooms and one half bath, more than 5,800 square feet and the most amazing finish-out you can imagine. Really, I am in awe of 517 Boulder Drive, which is marketed by Dave Perry-Miller agent Christine McKenny for $865,000. Plus, it’s hardly been lived in at all. This home has so much visual impact, from the pristine, white exterior to the twin staircases in the foyer, your eyes will just pop.

Boulder Kitchen

My favorite part of this home, which will surprise absolutely no one, is this bright and beautiful kitchen with cottage-style white cabinets and stainless steel appliances. There’s an ample island, too, for preparing feasts for all occasions or perhaps just being a gathering space for girlfriends as you gab over glasses of Pinot. It’s open to the living area, too, which has high ceilings and huge windows.

Boulder pool:backyard

The master bath is amazing, too, with a soaking tub and luxurious tile, but the place I can see myself relaxing is the backyard. I just love the garden, which has a great English feel with short, wandering hedges. The pool is just beautiful, too. But it’s pretty large for just two people, right? I’m sure Merlene and her husband will find a gorgeous condo near the Dallas Arts District that will give them everything they need.

Museum Toer shell 2010

Museum Tower shell 2010

You may recall that in early November 2012, Museum Tower came out with a gutzy move to spur condo sales: offering buyers an unprecedented two-year, money-back price guarantee.  George Zimmer’s voice kept circulating through my head. At the time, I remember thinking, wowsers, that’s bold and I need to know more about this!

Well, Steven C. Sandborg, Vice President of Sales and Marketing at MT, and I finally got together to discuss the deets. And this is rather unprecedented. Let’s say I go in and buy a gorgeous unit on the 12th floor of Museum Tower for $1,400,000, MT’s lowest priced unit. From the day I close on that condo to the two year anniversary of the closing, I have a contractual right to exercise an option to sell it back to them for the price I paid for it. Or shall I say, this option is included in my sales contract. That option says that I must give the developers 30 days notice that I want to sell my unit back to them for what I paid for it in January of 2013. Then they have 60 days to buy it back.

Simple: If I paid $1.4 million, MT will buy my unit back from me for $1.4 million two years down the road if I choose to move out.

What they are doing, here, is giving buyers an assurance they won’t lose money, guaranteeing their investment will hold it’s value for 730 days. Because of all the controversy surrounding MT’s “reflective problem” in the media, potential buyers may be concerned, and may have expressed concern, that the condos could depreciate in value.

Well, this little clause will sure fix that.

I asked Steve — can the developer say no?

“We cannot say no,” he told me. “This was done to address both current and future buyer concerns about the building because of all the questions that have been raised with the reflective issue.”

This was done, he says, to instill  confidence in the value and future of the building.

“We believe happy people won’t go anywhere,” said Steve. “That’s how confident we are about Museum Tower… it’s value is sterling today and will be in the future.”

Why two years, I asked? Did they think it might take that long to get the Nasher issues resolved, for any controversy negativity to fade off into the sunset?

No, he said, it was just a good number.

“You need two years to make a proper judgement on living in a place,” said Steve. “A year too quick, 18 months might be OK, but two years is perfect.”

Has there ever been a program like this anywhere else? Yes, said Steve: he had heard of a similar program at One Arts Plaza in 2007 and 2008 where 90% of the purchase price was guaranteed in a buy back. It was successful, says Steve, for what they wanted to achieve at the time.

“Museum Tower is going to be a great building, and a very positive investment for Dallas,” says Steve. “And this has definitely helped move some contracts.”

Of course, the hush-hush negotiations between Jack Matthew’s Matthews Southwest and Museum Tower’s owners could change the guarantee — if, for example, new owners (whoever they might be) decide to ditch the offer going forward. Of course, anyone who has already executed a contract with the guarantee is protected.

“Our whole focus all along was to step up sales effort for right now, when the building is finished,” says Steve. “This program will be a real benefit as we move forward.”

Indeed. Museum Tower is hosting a private New Year’s party Thursday night, and the RSVPs have  been so overwhelming the party is sold-out. Not to worry, Steve tells me he has already had to plan for a second party because of more big news….