Photo courtesy Patrick McDonnell/Downtown Dallas Inc.

Photo courtesy Patrick McDonnell/Downtown Dallas Inc.

If the last year is any indication, 2015 is shaping up to be another banner year for real estate development in Downtown Dallas.

This is according to downtown advocates, urban planners, and real estate and development experts, who gathered Friday to talk about city living in downtown at a panel, sponsored by the Dallas Business Journal.

Moderated by John Crawford, President and CEO of Downtown Dallas Inc., an advocacy group for Downtown Dallas, the panel shared candid insights into past successes, lessons learned, and where the area is headed in the future.

“There’s a pretty distinct spirit and energy in Downtown Dallas and we’ve reached a point of permanency, as far as what downtown has become,” said Crawford. “Residentially, we continue to be about 94 percent occupancy in all the buildings that have been converted and the new construction and depending on who you talk to, we have between 6,000 and 8,000 units under construction from 2015 to 2017. There’s an urban lifestyle that is continuing to catch on down here.”

Panelists included Theresa O’Donnell, Chief Planning Officer for the city of Dallas; Yogi Patil, an Associate at HKS Architects Inc.; Steve Shepherd of the Downtown Residents Council; and Michael Tregoning, President of Headington Company. Jump to read more!

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Home For Sale Sign Dallas

With Texas and Dallas clocking in a small uptick in inventory, everyone’s wondering if we the market is poised to stabilize soon and if our time of scarcity and rising prices is over.

According to the latest report from CoreLogic, not so much.

“Home prices are continuing to rise fueled by ongoing tight supply, low rates, and aggressive investor buying on the East and West Coast,” said President and CEO of CoreLogic Anand Nallathambi. “The expected surge in the number of homes for sale has not materialized to date as many homeowners are staying put and waiting for better economic times and higher prices in the future.”

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NetWorth Before and after 2When we think about the buying side of the residential real estate market, the vision that most often pops into our heads is a young couple, eager to get the keys to their first-ever home.

Of course, that’s not always the case. There are all different kinds of transactions, but the Dallas residential real estate market is becoming more and more appealing to foreign investors. It’s a trend recently discovered by NetWorth Realty principal Mark Bloom and investor Derek Abel.

“The Chinese are investing in the U.S. and specifically Dallas for three reasons: Diversifying investments, new real estate restrictions in China, and the low cost and volatility of property prices,” said Abel. “The Chinese investor is accustomed to flipping properties in China, as this is an extremely popular type of investment.”

Networth Before and After

It sounds like an interesting concept, especially with a pool of investors that can buy a greater number of homes, therefore ensuring a greater return on investment and less risk. And while “flipping” seems synonymous with buying a property, renovating, and then selling that property on MLS, that’s not the kind of transaction NetWorth handles. As Bloom tells it, the properties are presented to investors, who purchase them through a holding company a la carte. From there, Bloom and Abel handle the legwork.

“Mark and I have worked together to create a company that has created a pipeline for Chinese to directly invest in real estate in the Dallas area,” Abel said. “We provide them with market information for purchasing the property, contractor management, and marketing the property for sale. This provides a full-service company for foreign investors to use to invest money in real estate in Dallas with minimal time and effort.”

The company works specifically with Dallas properties, which make very attractive potential investments, Bloom said. After purchasing and selling several properties, Mark has seen that when the purchase price of a potential property plus the amount of repairs adds up to around 70 to 80 percent of the home’s value, that property will show a 15 to 40 percent return on investment in 3 to 6 months. It’s not a hard-and-fast formula, but it works for NetWorth’s purposes.

To me, that seems like a pretty sound investment, which is one of the reasons that the Chinese are looking to buy in Texas.

“At first it was difficult to get some foreign investors to look past New York, Los Angeles, San Francisco, Miami, etc. as Dallas, Houston, Austin, and San Antonio are often overlooked by foreign real estate investors,” Bloom said. “Once we got into numbers and statistics, it was easy for the Chinese investors to see that they were the early adopters in this situation, and if they made the proper inroads now, they would be able to take advantage of years, if not decades, of sustained growth in several major metropolitan areas in the great state of Texas.”

It’s heartening to see that Dallas, and even the whole state, is seen as an attractive investment all over the globe. We’ve been saying for a long time that because of our stable market, Dallas has been able to recover from the housing crisis much faster than markets such as Miami, Atlanta, and much of the East Coast.

Still, foreign investment in single-family homes is still a relatively new concept, Bloom said.

I’m curious: Most of our readers are Realtors who work with single-family homebuyers that will occupy the home they purchase. What do you think about foreign real estate investment in the single-family market?

This home in Palatka, Fla., was the most-viewed property on coldwellbanker.com.

Journalists are notorious for being bad with numbers. I won’t lie — I got a C in calculus and I was so proud of it. But that’s not to say I can’t appreciate data and statistics (I aced statistics, by the way!).

That’s why I love this idea from Coldwell Banker’s Blue Matter blog, which breaks down trends inside the homebuying process. This month, Coldwell Banker statistician Weiman Dong and COO Budge Husky take a gander at data for the month of May on the Coldwell Banker website and come up with some interesting results.

As far as location goes, Texas came in second to only California as the state where people who searched for their next home on coldwellbanker.com were looking to move. Other runners up include New York, Pennsylvania, and Illinois.

But when people were searching for specific cities, Dallas came in fifth, following New York, Chicago, Houston (!!!), and Los Angeles.

Houston, people? Really? The Bayou City? I used to live there and the humidity and paleolithic mosquitoes are the reasons I will not go back.

OK. Now that I’ve got that out of my system we can talk about that cute house at the top of the post. That was the most-viewed listing on the Coldwell Banker website. The former bed and breakfast has seven bedrooms, five baths, and $275,000 worth of adorableness. The price range for the top ten most-viewed properties spans from an $89,000 home in Holt, Mich., to a $65 million mega-mansion in Los Angeles.

I can’t wait to see what they look into next!