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How Missing the Bubble Hurt Dallas Real Estate

Sure, our home prices didn’t collapse like they did in other parts of the country. But that’s not necessarily a good thing.
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photography by Scott Womack

TO THE SOUTH



How low can the inventory go?


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photography by Scott Womack
THE OVERVIEW: Southern Dallas suburbs, like South Dallas in general, are lower priced and contain an older, less expensive housing stock than their northern counterparts. But that hasn’t insolated them from the effects of the recession. Median prices since 2007 have fallen by as much as 25 percent and buyers have become scarce as loan requirements have increased.

THE EXPERT’S VIEW: “The areas that tend to be more credit challenged have struggled,” says Ted Wilson of Residential Strategies. “But in those areas, builders have worked a lot of that inventory down.” Therein lies the potential silver lining. Inventories to the south of Dallas are the lowest in the entire Dallas area. So if demand comes back—a big if, to be sure—prices are likely to rise.

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ARLINGTON



Where demand is starting to meet supply.


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photography courtesy of Vaquero
THE OVERVIEW: Sprawling Arlington is typically the sales volume leader among communities in the Dallas area. But that volume has taken a hit during the downturn, falling by almost a third since 2007. Even so, median prices have held steady, as have days on the market. And Arlington’s listings-to-closings ratio is among the leaders in the area.

THE REAL ESTATE AGENT’S VIEW: “The prices have pretty well bottomed out,” says Phil Amodeo of the Dee Davey Group, who works in Arlington and Mansfield. “There are still bargains. But you have to expect if it is priced really low around here, you’re going to have competition.”

BUYER BEWARE: “I see people every day who look at prices and say, ‘Oh, we’ve got a buyers’ market.’ But I don’t really see it that way,” Amodeo says. “Yes, prices have softened, but because there is a limited supply, sellers don’t have to really discount their properties. Plus, because we didn’t have that big run-up in prices that happened in other parts of the country, a lot of sellers just can’t afford to reduce their price too much because they’ll be underwater.”


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photography by Elizabeth Lavin


TO THE WEST



The sun has set on the lake. For now.



THE OVERVIEW: The communities surrounding Lake Lewisville—to the north, the mostly moderately priced Lewisville and Flower Mound, plus the pricey enclave of Highland Village, and to the south, the exclusive towns of Westlake and Southlake, plus the up-and-coming Keller—boomed during the housing boom. Prices didn’t necessarily skyrocket, but construction did, as these western Dallas suburbs became favored ground for corporate relocation companies to place their clients. Well, guess what market disappeared almost overnight in 2008? If you guessed corporate relocations, give yourself a prize. The result: sales of high-end homes, especially, have slowed to a crawl, and construction of both high-end homes in swanky Southlake and moderately priced homes in Lewisville and Flower Mound has stopped.

THE REAL ESTATE AGENT’S VIEW: “We have people here who are working, living in temporary housing, and looking to buy,” says Tommy Pennington of Tommy Pennington Realty Group at Keller Williams in Southlake. “But they can’t buy because they can’t carry a new home here and their old home in another market.” So the Dallas area is suffering from the housing bust after all? Pennington thinks so. “Relocation companies used to buy your old home if it didn’t sell right away,” he says. “But they don’t do that anymore. So when we have people moving from Phoenix or Florida or California, they can’t sell their homes there.” That, and stricter lending procedures from the banks, has put a crimp in sales of  homes priced more than $700,000. “Our average sales price in Southlake is around the $600,000 mark, so we see a lot of those homes in the $700,000-and-up range,” Pennington says. “It’s slowed down. But the market for over $2 million has actually died. We can’t even get an appraisal on a house over $2 million because the appraisers don’t have any comparable sales data to work with.”

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WHAT ABOUT WESTLAKE? Sales and prices have certainly been down in the luxe lakes west of Dallas. But median prices in Westlake are up over 2007, and the number of sales per quarter is holding steady, even though Westlake has a high inventory when compared with, say, Keller. So what gives? “Westlake is a unique animal,” Pennington says. “To find homes that are less than $1 million is pretty tough to do. But we’ve seen buyers who have the cash to buy properties as high as $1.5 million.” Some speculate those buyers are seeking a safer haven than may be found in other areas of Dallas. “If you can afford and want to be in that market, Southlake and Westlake are both great locations,” says Cindie Stewart, a real estate agent with Texas Sold Team in Keller. “They are a little more recession proof.”










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