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Commercial Real Estate

In Dallas’ ‘Outer Ring’, Real Estate Deals Abound

Cheaper houses are blooming on the exurban prairie. But for how long?
Cheaper houses around Dallas
Asaf Hanuka
They call it the “outer ring.” That otherworldy name refers to a collection of far-flung former prairie towns encircling Dallas, which are rapidly morphing into exurban boom towns made up of relatively inexpensive homes. The ring stretches from Tarrant County, along the Chisholm Trail Parkway, through Collin and Kaufman counties, along Highway 380. It reaches south beyond Red Oak and north past Prosper.

The communities there have available land that is much cheaper than what can be found closer to Dallas’ “inner ring,” inside I-635. That’s why developers are now building more than 10,000 houses in the outer ring that will cost between $250,000 and $350,000, a price range that was common not too long ago throughout Dallas.

Some real estate agents tell their first-time buyers that if they want to live south of 635, they’ll have to pay $400,000 to $600,000. Anything below that, and they’ll have to consider a townhouse or look at places like Forney, a Kaufman County suburb that’s quadrupled in size since the 2000 Census. Forney has 20,000 residents today. Last year, developers started work on 295 homes in the $250,000 to $350,000 range. More than a dozen new subdivisions are planned in Kaufman County, and nearly two dozen are already underway.

In southwest Tarrant County, the pace of development for lower-priced houses is faster than anywhere else in the area. Much of the new development there has been spurred by the 2014 completion of the 27.6-mile Chisholm Trail Parkway. The projects underway include Northstar, a master-planned residential neighborhood where 410 of an expected 2,200 homes will be offered for sale later this year. Prices start in the low $200,000s.

North of Fort Worth, in Denton County, megaprojects are under construction. In Argyle, a small town of 4,000 halfway between Denton and Flower Mound, Hillwood Communities has planned Harvest, a 1,200-acre development with 3,200 homes built around a working farm. Not far away, in the even smaller town of Northlake, Hillwood is putting 609 homes into Pecan Square, a 1,157-acre development where another 3,000 houses will eventually be offered from $270,000 to around $500,000.

Subdivision builders are offering amenities to draw residents to these far-out places. At Windsong Ranch in Prosper, for instance, 600 of the 2,000 acres are dedicated to wooded parks, bike trails, and playing fields. That’s one reason some builders don’t see parallels to the last housing boom, when a wave of lower-priced, farther-out exurban building began shortly before the market went bust.

Paige Shipp, regional director in Dallas-Fort Worth for real estate research firm Metrostudy, says another major difference is that current development isn’t speculative. “Last time around,” she says, “we were just pushing out to outlying communities to get as many homes built as we could. What builders are doing today is more about providing attainability, about offering an alternative price point that buyers can’t get elsewhere.”

But that lower price point is achieved through a subsidy hidden in highway construction. Many of these houses are going up near recently completed or planned major road projects. It’s an unsustainable pattern of development, especially considering the aversion to car ownership seen among younger people. And then there’s the fact that the North Central Texas Council of Governments believes the region’s roads face a shortfall of around $300 billion. For now, though, the sprawl continues.

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