Real Estate Forum

Real Estate ForumResidentialResidential April 17, 2009

IRR-Residential Valuation Consultants, LLP4200 South Hulen Street, Suite 525

Fort Worth, TX 76109(817) 336-8787 Phone

(817) 336-8792 Fax

3The Residential Real Estate Forum

From the EditorResidential real estate has certainly

been on a rocky road during the current

economic downturn. While Texas – and

Tarrant County in particular – have been

spared some of the dire consequences

visited upon the rest of the country,

we’ve felt plenty of bumps and ruts just

the same.

So, as an organization that provides

the latest news for business owners and

managers in the area, what better time

to take an in-depth look at what is hap-

pening now and what the prospects are

for the future.

We’ve got an array of talent armed

with plenty of data on the current mar-

ket and a glimpse of what comes next.

Our speakers include:

• John Duca, vice president and senior

policy advisor at Federal Reserve Bank of

Dallas, on housing and the economy.

• Ted Wilson, principal of Residential

Strategies Inc., who will examine new

home activity in the area.

• Robert Gleason, director of govern-

mental affairs for the Greater Fort Worth

Association of Realtors, who will deci-

pher the latest legislative changes.

• Dr. Mark Dotzour, chief economist

and research director at the Real Estate

Center at Texas A&M University, who will

provide a real estate forecast and is

guaranteed to be entertaining as well.

• Arthur Sterbcow, president of Latter

& Blum and CJ Brown Realtors, who will

discuss the real estate market today.

This event promises to provide some

valuable information and plenty of news

you can put to use as your business goes

forward, no matter how rocky the road.

Robert Francis

Editor

PublisherBanks Dishmon

EditorRobert Francis

Associate EditorMichael H. Price

Managing EditorCrystal Forester

ReportersElizabeth Bassett, Betty Dillard, Aleshia Howe

John-Laurent Tronche, Leslie Wimmer

ContributorLaurie Barker James

PhotographersGlen E. Ellman, Jon P. Uzzel

ProductionBrent Latimer, Clayton Gardner

Advertising ExecutivesAnn Alexander, Andrea BenfordBob Collins, Elizabeth Northern

Mary Schlegel, Annie Warren

ReceptionistMaggie Calhoun

Business Manager/Director of Events

Shiela West

Fort Worth Business Press. © 2009CONTACT US

3509 Hulen St., Ste. 201

Fort Worth TX 76107

817-336-8300 • 817-332-3038 (fax)

www.bizpress.net

Government’s efforts to help residential market still a ‘wait-and-see’ situationAn interview with Dr. Mark Dotzour, chief economist and research director at the Real Estate Center at Texas A&M University

Dallas-Fort Worth hasn’t seen lot portfolio fire sales…yetAn interview with Ted Wilson, principal of Residential Strategies Inc.

Buyers and sellers should pay attention to their area stats An interview with Martha Williams, Williams Trew Realtors

Downtown Fort Worth high-rise scooped up by California group StarPoint Commercial Properties LLC attracted to the Fort Worth market

The ListHome Appraisal Companies

Real DealsRecent activity on the residential market

Pulte Homes, Centex merge to become top U.S. homebuilder When complete, deal will push D.R. Horton to second place

Dallas-Fort Worth housing starts show first-quarter declineReport shows a nearly 50-percent drop in starts

A plan to stimulate the housing market is missing Obama administration plans only half-hearted

Foreclosures become new investment alternative Investors swarm Tarrant County courthouse looking for deals

Investors renew apartment interestNicole Graffis is rehabilitating a 77-unit, Class C property in central Fort Worth

Fort Worth residential real estate:The good, the bad and the not-so-uglyGuest column from Scott Burdette, managing director of IRR Residential Valuation Consultants

Greater Fort Worth Association of Realtors launches PR campaignNew campaign focuses on local housing industry

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Inside

5The Residential Real Estate ForumFort Worth Business Press

Government’s efforts to help residential marketstill ‘wait and see’ situationBy Aleshia [email protected]

When it comes to the Texas residen-tial industry, few people have donemore research and asserted more opin-ions about the market than Texas A&MReal Estate Center’s Chief EconomistDr. Mark Dotzour.

Though Dotzour said he thinks aturnaround for the states hit hardest bythe housing melt-down could be awhile off, the less-impacted Texas mar-ket will see new life in 2010 with newhome builds rising and a surge in exist-ing home sales. Of course by then,Dotzour said, interest rates will have risen and many buyers may havemissed out on a great opportunity. He recently sat down with a FortWorth Business Press reporter to answer some market questions.

Do you think the $8,000 tax credit for first-time buyers will work to get houses moving?

I think it’s a good idea and people will take advantage of it to a cer-tain extent. It’s such an improvement over the $7,500 tax-free loanthat the government offered in ’08 … In Texas there is some fear thathome prices will start falling like they have on the East and Westcoasts so it is a great incentive, but I’m afraid it won’t turn the marketaround on a dime. What we really need to look for in a turn around isa stabilization in home prices and quite frankly I think part of that willbe when we see prices stabilize in California and Florida because peo-ple across the country are being psychologically impacted by the bigprice drops in those states and they’re taking those psychological deci-sions and applying them to Texas, which doesn’t make sense, butthat’s what’s going on. So in Texas we needed to see a big drop innew home construction, and that’s happened in a pretty dramatic wayin the last two years and that’s good.

Do you think the government will roll out a program for any buyer, first-time or not?

I’ve attended a lot of meetings and seminars around the countryand I don’t sense a lot of urgency in D.C. to encourage people to buyhomes. What I’m seeing is a lot of motivation to avoid foreclosures.The tendency in D.C. is to reduce the incentives to buy homes inAmerica rather than increase them. … Why should we help peoplebuy homes when easy money and too easy credit is what got us intothis in the first place?

…There are two parts to the housing problem: pre- and post-fore-closure. And the government is focusing on the pre-foreclosure prob-lem. It’s a frankly easy fix … My solution would be to give investors anaccelerated depreciation schedule, say five to seven years since youdon’t want them flipping the houses. Require a 25 percent down pay-ment, which eliminates the possibility of foreclosures, and let thoseinvestors pick up all the foreclosed homes on the five- to seven-yeardepreciation so they can take a nice big tax break. Then at the end,waive their capital gains tax. I have no earthly idea why our govern-ment hasn’t thought of this. It’s very similar to what they did in the‘81 tax reform act.

What are the chances the federal government will introduce a programto help subsidize mortgage payments for those at risk of foreclosure?

The chance of that is fairly high. Government right now is juststruggling to find one that works. The problem is it’s not a marketsolution. The market solution to that is foreclosure, but for whateverreason we’ve decided instead not to let the market work so govern-ment is creating this artificial thing … Government would come inand give you a second loan on the property, a second mortgage that

would let you pay down the first mortgage until it’s low enough thatthat payment is about 31 percent of your income and there’s no pay-ment on the government’s second mortgage.

What do you think interest rates will do in the coming year?Mortgage rates are the lowest I’ve seen in my 54-year lifetime. Now

is absolutely the best time to refinance. Period. Frankly, if you’resomebody in your late 50s or early 60s and planning on retiring into adifferent home, now is the best time to do it. Mortgage rates are lowand people are willing to make deals on lots and homebuilders arehappy to build homes. If you’re planning on buying a home and livingthere at least three years, do it.

The federal government is trying to artificially lower interest ratesby using money to buy mortgage securities so for the time being,we’re going to see mortgage rates pushed low … So in the next threeto four months is a great opportunity, but once the government runsout of money to artificially juice the mortgage industry and disen-gages from the market, rates will return to more like 6 percent andmore.

Are you optimistic about the country turning around the current economic situation in its residential market?

There’s a 50 percent chance. The best case scenario is that … if wesee positive corporate earnings in the fourth quarter ‘09 compared toa year earlier. That’s going to be anticipated by a rising stock marketthree or four months earlier so if that does happen, there will be asustained rally in the U.S. stock market somewhere after Labor Dayand that will start to build consumer confidence, which is really at theheart of this problem.

The other scenario is that there won’t be positive corporate earn-ings. Instead there will be a second round of layoffs based on eco-nomic performance. But the huge government bill just passed wasdesigned to give money to states so they wouldn’t lay off people andcreate a downward spiral. So, the worst case scenario is that the gov-ernment attempts to artificially stimulate the economy fail and unem-ployment goes from where it is now to 10 or 15 percent. I’m kind ofhoping the government bailout works.

What do you think the nation’s housing market will look like when that turnaround comes?

Texas’ housing market is likely to turn around more sharply than theU.S. will as a whole. Our inventory of new and available homes is lowcompared to rest of the country. We’re not going to have near asmuch slack to pick up before we need more homes built. So I expectit to begin, I would assume probably in the spring of 2010. My guessis we’ll see new home construction and sales in the spring of 2010will be higher than they were in the spring of 2009.

What will the multifamily market look like after the turnaround?I think the apartment market is going to be soft in ‘09 and ‘10.

Builders and investors misread the market last year thinking foreclo-sures would translate into higher demand for apartments. Instead, itcaused households to grow – brother moves in with brother or a 25-year-old son cancels his apartment lease and moves back home. Theythought people with foreclosed homes would go back into apart-ments. Instead, those foreclosed homes were bought by investors andturned into rentals, which are competition for apartments. That’s whywe’re seeing delinquencies in the apartment market and we’ll contin-ue to see a shakeout in ownership.

What do you consider the markers of a housing market turnaround?When we see stock prices of the major homebuilders in the country

stop going down, then the turn around is starting. Then we’ll seehomebuilders stopping their concessions and you can open up yourSaturday paper and see homes for sale are offering no major conces-sions.

Dr. Mark Dotzour


D-FW hasn’t seen a lot of portfolio fire sales ... yetBy Aleshia [email protected]

Ted Wilson began his career in the 1980s, developing apartments as wellas residential golf course communities. Since 1992, he has been in the analy-sis business, currently a principal at Residential Strategies Inc., a marketresearch and consulting firm that tabulates data quarterly for majorMetropolitan areas.

What changes are you seeing in today’s market? The biggest change of course has been with activity in the market. D-FW

crested with 51,000 homes sold in the second quarter of 2006 and obviouslya lot of that is based on demand driven by loose credit and as we saw inearly 2007, the finance market collapsed and mortgage underwriting stan-dards tightened up. As a result, it’s much more difficult to qualify for buyersso the net absorption rate went down from 51,000 to 19,000, which is a 62 percent drop as far as totalactivity. That’s still not as bad as the 80 percent drop nationally.

What are builders seeing in the current market?Beginning in 2008, builders began seeing slower demand and the economy was shifting into recession

mode. There was a noticeable shift in the market in the wake of the collapse of securities. But things arelooking a little better now. Builders reported seeing an increase in traffic and sales early this year com-pared to last year. Of course it’s still slower than for the same period a year ago. We expect to see themarket continue to erode this year overall.

How does Dallas-Fort Worth compare to other Texas markets?There is a common thread among all Texas markets and that is they are holding up very well compared

to other metro areas throughout the nation. D-FW is holding its own in housing inventory, which isalways a concern at times like these, but has done pretty good at holding down its inventory and offer-ing price stability. Throughout the state, we didn’t see the big price bubble so we’re not suffering asmuch.

But we are all still feeling a pinch. Austin didn’t really get out the lots to the same degree as D-FW sothere’s a little more barrier to entry in Austin and San Antonio tends to be more of a first-time homebuy-er market so it’s a little different than here. In Dallas, we have felt of late more of the reduction in layoffsbecause we have an awful lot of Fortune 500 companies. The good news for D-FW is that we have bal-anced housing. The bad news is we delivered enough lots to satisfy 50,000 homes.

What is the lot situation in Dallas-Fort Worth?We now have a definite surplus of lots. We have a total of 94,000 lots available and we are in the

middle of a downturn where we will probably see a bigger erosion of that supply. It will take years towork down that overhang of lots and as a result, a lot acquisition and development lenders will be atrisk. While values of lots have held up pretty well, loan renewals are coming up and banks are trying tofigure out how to shuffle through that. The absorption rate has slowed and the take down rate bybuilders is not at all what they thought it would be, so we will see.

Are you seeing portfolios of discounted lots becoming available in the Metroplex?So far I haven’t seen the big fire sales. If there are discounted lots available, they’re coming from the

big builders themselves. Bigger banks are waiting to see how the TARP funds are going to play out andwhether there will be the creation of a bad bank to push off their bad loans. That’s the fundamentalquestion right now and one that will surely affect the future prices of these surplus lots, is how is thegovernment going to work with toxic loans and how will that affect banks’ books.

How has the market trouble changed the face of the residential builder industry?

At the peak of the market in 2006, there were just shy of 60 production builders doing 100 units peryear in D-FW. Since then, of those 60, 22 have left the market, sold their assets or declared Chapter 11bankruptcy. That represents about 14 percent of the total business here. And we continue to see increas-ing pressure on builders from lenders with regard to renewing their interim lines of credit. Most havebeen committed. Lenders want more securities, more guarantees, and I’m not sure they’re going to getthat. For big builders, it has forced the hand of many of them. Smaller builders not getting their lines ofcredit renewed really shuts these guys down. It’s an interesting time. On one hand, we see the govern-ment out there saying banks need to make loans, extend credit, but the reality is banks are being muchmore conservative in their underwriting and those extensions of credit. So, most builders are really down-sizing and getting in line with the market. Not surprising, in spite of having contracts with developers,builders are taking lots down as they need them.

All the while, we can hear the drum beat of opportunity funds on the sidelines waiting for that pricedrop. But so far, the dam hasn’t broken. If it does break, though, it could cascade and spill over intoproperty values, making a tough situation a very bad one.

Ted Wilson

There is a commonthread among all

Texas markets andthat is they areholding up very

well compared toother metro areas

throughout thenation.

– Ted Wilson,D/FW partner

for Residential Strategies

Buyers, sellers should pay attention to their area statsBy Aleshia [email protected]

With an ever-evolving national residentialmarket playing in the background, manyTarrant County potential home buyers andsellers have failed to take a good look at howthe local market is out-performing – at leastthat’s Williams Trew founding memberMartha Williams’ take on it. But after 30years as a leading Realtor in Fort Worth(much of that time she has been in the top 1percent of Realtors nationally), she might beon to something.

Williams left a marketing career at TexasAmerican Bank in 1979 and entered the realestate industry as a Realtor with BrantsRealtors where she was the No. 1 producerfor 11 consecutive years. She went on to become a founding member ofWilliams Trew Real Estate Services and said today’s downturn is nothing newas Realtors have been through it all before. Williams’ No. 1 piece of advicefor those thinking about selling or buying is to keep an eye on what matters– how the local market is performing.

What changes are you seeing in the real estate market? The changes in the market are really the consumer concern about the globaleconomy and the media promoting such gloom and doom. We are so fortu-nate to live in Texas where the real estate market is somewhat stable com-

pared to other parts of the U.S. I think buyers are just frozen right now notknowing what to do.

What are buyers’ concerns?Buyers’ concerns are that prices will come down. There will be many morehouses on the market so ‘why buy now?’ ‘Just wait and see.’ [There is also]concern over getting loans with minimal down payment and credit con-cerns.

What are sellers’ concerns?Sellers’ concerns are that prices will go down; That there are a lot of

houses coming on the market in the neighborhoods. They have to pricetheir house realistically if it is going to sell in this market. [The] number ofbuyers are less than last year [and the] market time is more.

How are federal efforts affecting your day-to-day? Are the stimulus packageor the $8,000 tax credit really helping?Federal efforts really have not had much affect. It’s great for first-time homebuyers.

How do you think the Realtor industry will look in the coming years?I think the [real estate] industry will be the same as over history. In toughtimes, a lot of people get out of the business needing steady income. Eightypercent of the sales are made by 20 percent of the agents. Quality will riseto the top and the experienced, true professional agents who have beenthrough this before will thrive. They will have to work twice as hard, butthey will survive and thrive.

8 The Residential Real Estate Forum April 17, 2009

Martha Williams

Downtown Fort Worth high-rise scooped up by California groupBy Aleshia [email protected]

Citing an attractive Fort Worth market, a Beverly Hills, Calif.-based realestate group has picked up downtown Fort Worth’s The Tower building andthe nearby Tower Annex building for an undisclosed amount.

StarPoint Commercial Properties LLC, which opened a Dallas acquisitionoffice in 2007 anticipating interest in the Dallas-Fort Worth market, pur-chased The Tower Complex, which consists of the two buildings along withan adjacent 253-car parking lot and about 70,000 square feet on twounderground levels between the two buildings.

“It’s a tight commercial submarket and a very attractive one and we werehappy to acquire such a property,” said StarPoint Principal Evan Farahnik.

The first two floors of The Tower, at 500 Throckmorton St. in Downtown,boast about 60,000 square feet of office and retail space, which is 98 per-cent leased. The remaining 35 floors hold condominiums that are 98 percentsold out.

Current Tower tenants on the building’s ground floor include The Vault,Cantina Laredo, Qdoba and Potbelly Sandwich Works. Future tenantsinclude a Capital One branch location, Fat Daddy’s Sports and Spirits Café,which is currently in its build-out phase with an anticipated May openingdate, and Vice, a nightclub set to open on the south side of the building atstreet-level. The structure’s second floor mostly consists of office space.

The Tower, formerly known as the Bank One Tower, was renovated in2003 and consists of 294 luxury condo units. Two condominium associationsown the remaining portions of the building as well as most of the parkinggarage.

Farahnik said his company’s interest in The Tower was based on three fac-tors: the sub-market, the tenancy and the potential conversion of the under-

ground space into leasable base-ment-level retail.

“There is some space webelieve we can get creative withand generate some income offof,” Farahnik said.

The Tower Annex buildingboasts some street-level retailspace as well as 70,000 squarefeet of office space currentlyleased to Chesapeake Energy forits appraisal department.

StarPoint commissioned UCRUrban to handle leasing for theproject. Available space will con-sist of 2,000 square feet of retailspace that has never been leasedas well as 2,400 square feet of space that housed The Tower’s sales officeand will be converted into retail space.

Farahnik said his company’s acquisition team continues to scour NorthTexas for investment opportunities and The Tower transaction likely will bethe first of many in the area.

“The market is still so disjointed that we don’t have any goal numbers inmind, but we have equity for good deals in good growth areas as long asthe submarket is good,” he said.

StarPoint Commercial Properties represented itself in the transaction. Theseller, TLC Green Property Associates of Chicago was represented by TomSalanty, executive director in the Dallas office of Cushman & Wakefield ofTexas Inc.


The Tower is a 37-story building indowntown Fort Worth.

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aniza

tion

Inc.


Rank

CompanyAddressCity Postal CodePhoneFaxWeb site

Tarrant County ResidentialAppraisals in 2008

2008 Appraisal Percentages:Residential/Commercial/Other

Total LocalAppraisers

Local CertifiedAppraisers

Total LocalFull-time Staff

Designations onStaff

2008 Appraisals by ValueRange:

Over $500,000$300,000-$500,000$100,000-$300,000

Top Local ExecutiveYear Established Locally

1Appraisal Source Inc.7080 Camp Bowie Blvd.Fort Worth 76116817-763-8000817-763-8017asidfw.com

1,40086/12/2

87

10MAI, SRA and SRPA

000

Robert A. Tyson1986

2

IRR-Residential ValuationConsultants LLP4200 S. Hulen St., Ste. 525Fort Worth 76109817-336-8787817-336-8792thevaluepros.com

1,300100/0/0

86

1SRA

DNDDNDDND

Scott L. Burdette1989

3York & York Inc.2825 Exchange Blvd., Ste. 103Southlake 76092817-329-9211817-329-8291yorkandyork.com

896100/0/0

1010

13SRA

221157630

Greg York1992

4BBAA LLC9800 Verna Trail NorthFort Worth 76108817-738-9595817-738-7773benboothe.com

89210/90/0

31

6DND

590130200

Ben B. Boothe1989

51st Appraisal Choice700 Six Flags DriveArlington 76011817-649-8055972-437-22081stappraisal.com

50080/0/20

31

2RAA and GAA

DNDDNDDND

Michael Shelton1997

5

Jane R. Brausam AppraisalServices4721 Boulder RunFort Worth 76109817-738-7714817-738-3615DND

500100/0/0

11

2SRPA

150150200

Jane R. Brausam1994

7Century Appraisal Group Inc.P.O. Box 486Euless 76039817-235-0655817-796-2744centuryappraisalgroup.com

40098/0/2

22

2DND

40240200

Cynthia Payne2001

7Gregg White Co.8629 Lake Country DriveFort Worth 76179817-237-7571817-237-0775texasrealestateappraiser.com

400100/0/0

11

1IFA, CRA and

candidate memberfor NAIFA

50200150

Gregg White1980

9Wimbish Appraisal Service5504 Brentwood Stair RoadFort Worth 76112817-446-7715817-446-7744DND

30080/10/10

33

2RA and SRA

3267135

Vincent Wimbish1992

10Accurate Appraisals8161 Vine Wood DriveNorth Richland Hills 76180817-577-5795817-887-1353accurateappraisalsgroup.com

14499/1/0

21

2DND

123492

Charles S. German2005

10Stephen East & Associates2904 Steeplechase TrailArlington 76016817-451-2049817-451-2426N/A

144100/0/0

11

1SRA

34596

Stephen East1980

12J. R. Kimball Inc.201 Main St., Ste. 1260Fort Worth 76102817-332-7872817-338-1050N/A

2010/75/15

33

3MAI

DNDDNDDND

J. R. Kimball1968

13Weaver & AssociatesP.O. Box 1083Lancaster 75146972-218-6200972-227-2508appraisaldfw.com

15DND/DND/DND

32

DNDMSA

DNDDNDDND

Jim Weaver1989

14

Republic Appraisals of Texas LP4760 Preston Road, Ste. 244PMB 208Frisco 75034214-618-5474214-618-5475republicappraisals.com

5100/0/0

54

4N/A

DNDDNDDND

Matt Boring2004

15Edwards Appraisal Group4021 Alava DriveFort Worth 76133817-691-4827817-294-0212edwardsappraisalgroup.com

395/0/5

22

2None

20110205

Michael Edwards2003

Area Residential Appraisal CompaniesRanked by Tarrant County residential appraisals in 2008


RESEARCHER: Mary Kennan

Rank

CompanyAddressCity Postal CodePhoneFaxWeb site

Tarrant County ResidentialAppraisals in 2008

2008 Appraisal Percentages:Residential/Commercial/Other

Total LocalAppraisers

Local CertifiedAppraisers

Total LocalFull-time Staff

Designations onStaff

2008 Appraisals by ValueRange:

Over $500,000$300,000-$500,000$100,000-$300,000

Top Local ExecutiveYear Established Locally

16Appraisal Services Inc.777 Main St., Ste. 1990Fort Worth 76102817-335-5757817-335-8422appraisalservicesdfw.com

230/70/0

5DND

5MAI and SRA

DNDDNDDND

Brian K. Huffman1969

16Young Appraisal Company Inc.9141 High Oaks DriveNorth Richland Hills 76180817-428-9776817-428-9777youngappraisalcompany.com

299/0/1

22

DNDDND

DNDDNDDND

W. Paul Young1995

NRBrady Condike Inc.415 S. Morgan St.Granbury 76048877-283-0874817-573-9974bradycondike.com

DNDDND/DND/DND

32

5BS, MBA, SRA and

MAI

DNDDNDDND

Ed Archer2001

NRJudy Ward & Associates2423 E Renfro St.Burleson 76028817-447-7611817-447-4440judywardrealestateservices.com

DNDDND/DND/DND

22

1IFA

DNDDNDDND

Judy Ward1986

NRH. Fielding Chandler & Associates6300 Ridglea Place, Ste. 607Fort Worth 76116817-763-0001817-763-0075hfchandler.com

DND100/0/0

11

1DND

DNDDNDDND

H. Fielding Chandler2002

NRTexas Appraisal Inc.P.O. Box 797585Dallas 75379972-985-3000972-985-3005texasappraisal.net

DND98/0/2

11

3MSA

1114

Craig Cornwall1989

NOTES: DND - Did not discloseSource: participating companiesTo be included on this list, contact [email protected].

Area Residential Appraisal Companies continued

Ranked by Tarrant County residential appraisals in 2008

Foreclosed Arlington apartments sold in all-cash dealA local private investor paid $1.2

million in cash for Arlington SquareApartments, a property that wentback to lender after a defaultedCMBS loan last year.

A Carrollton investor, who wasnot identified, purchased the 70-unitproperty from a holding company in Columbus, Ohio.

Constructed in 1965, Arlington Square Apartments is located at 1500 W.Lovers Lane in Arlington just southwest of the University of Texas atArlington campus.

“When the holding company foreclosed and took the property back, ithad a lot of issues that you typically see in defaulted assets in today’s market[like] high vacancy, low collections, deferred maintenance, etc.,” said MartMartindale, senior director of capital markets with Cushman & Wakefield ofTexas Inc., who represented the seller in the transaction.

Martindale said the seller put about $150,000 of capital improvementsinto the asset to cure some general deferred maintenance and safety issues,in addition to raising occupancy to about 80 percent.

Martindale said the buyer has plans to “continue to renovate the assetand convert it to an ‘All Bills Paid’ format.”

The buyer was represented by Doug Perry and Brad Sumrok of LifestylesRealty.

Greenhill Apartments soldA Southern California investor purchased the 50-unit Greenhill

Apartments from a private investment group for an undisclosed amount.The Class-C complex at 403 Small Hill Rd. is 93 percent occupied. Units

consist of a mix of studios and one-bedroom apartments ranging between430 and 850 sf, with rents between $435 and $595.

Keller Williams represented the buyer.

Partnership purchases Regal Brook ApartmentsDaryl Windland, lead partner for Wind Properties RB LLC purchased a

160-unit apartment complex in foreclosure for $3.3 million.Wind Properties purchased Regal Brook Apartments, located at 8303

Skillman in Dallas, with plans to complete renovations to the property. WindEnterprises LLC will manage Regal Brook.

Cheryl Pogue Windland, with KMM Realty Group, brokered the transac-tion on behalf of Wind Properties.

Stayton project team announcedAfter months of planning, Senior Quality Lifestyles Corp. announced the

team for its pending upscale retirement development, The Stayton atMuseum Way.

Set for construction just off of West Seventh Street in Fort Worth’sCultural District, The Stayton will feature 188 independent living residenceswithin three 11-story towers.

Greystone Communities, based in Irving, was named as developer of TheStayton, which was designed by the Dallas office of Baltimore, Md.-basedCSD Architects.

Landscaping architecture firm Talley Associates, based in Dallas, will han-dle the project’s outdoor development and interior design firm Studio Six 5,based in Austin, will use green design techniques on the project’s interior.

Dallas-based Andres Construction Services LLC, a LEED AccreditedProfessional, will serve as general contractor for The Stayton. AndresConstruction also is the general contractor for the So7 project currentlyunder development on West Seventh Street neighboring the future Staytonsite.

The Stayton project team also includes civil engineer Teague Nall andPerkins, structural engineer LA Feuss Partners Inc., mechanical, electrical andplumbing engineer Reed Wells Benson & Co., lighting designer Scott OldnerLighting Design, JEM Associates for food services, Texas Department ofAging and Disability Services for code officiating and spec writer INTROSPEC.

realdealsAleshia Howe


Pulte Homes, Centex merge to become top homebuilder By Aleshia [email protected]

Big changes continue in the nation’s home marketas the country’s No. 2 builder Pulte Homes Inc. andNo. 3 Dallas-based Centex Corp. have announcedthey will combine to formthe largest homebuildingcompany in the nation,effectively passing up FortWorth’s D.R. Horton Inc.,which has held the No. 1post for several years.

Pulte announced April8 that it will acquireCentex Corp. in a $1.3billion stock-for-stockdeal. The transaction,which also includes $1.8billion of debt, will givethe combined business aliquidity position of morethan $3.4 billion in cashas of March 31.

The companies’ mergercomes at a time whenhomebuilders are strug-gling to cope with slow-ing national home sales,tight credit and waveringconsumer confidence.

Pulte President andCEO Richard J. Dugas Jr.said the acquisition “putsus in an excellent positionto navigate through thecurrent housing down-turn.”

The combined compa-ny will operate under thePulte name and will bebased in Bloomfield Hills,Mich., though its leaderscontend the companywill still have a strongpresence in Dallas.

The combined compa-ny will have a top threeposition among home-builders in 25 of the top 50 markets in the U.S. Themerger makes the new Pulte entity the No. 1 home-builder in San Antonio, and introduces the Pultebrand to the Fort Worth market.

Upon completion of the transaction, Dugas willassume the positions of chairman, president and CEOof Pulte Inc.

Per the deal, Pulte stockholders will own about 68percent of the combined business and Centex share-holders will own the remaining 32 percent.

The new company will have a presence in 59 mar-kets throughout the country and gives Pulte access toCentex’s land holdings throughout Texas as well as inSouth Carolina.

“We believe this is the right combination at theright time in the business cycle. By acting decisivelynow, we’re creating unrivaled firepower to capitalizeon the opportunities in homebuilding that are nowbecoming visible on the horizon,” Centex Chairmanand CEO Timothy Eller said in a statement.

Eller will become Pulte’s vice chairman and also willwork as a consultant for two years following theacquisition’s completion.

Aside from Eller, Pulte’s board will be expandedand will include three other Centex board members.It also will include eight members of Pulte’s currentboard, including founder and Chairman William J.Pulte.

The acquisition, which was unanimously approvedby both homebuilders’ boards, is expected to close inthe third quarter. It is expected to qualify as a tax-free reorganization.

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Dallas-Fort Worth housing starts show first-quarter declineBy Aleshia [email protected]

Dallas-Fort Worth area builders continued to pare starts in the first quarterof 2009 as the latest report compiled by Residential Strategies Inc. shows anearly 50 percent drop in starts for the beginning of 2009 compared to thesame quarter a year ago.

In the first quarter of 2009, builders commenced construction on 2,394new homes, compared to 4,943 units in the first quarter of 2008.

Ted Wilson, D-FW partner for Residential Strategies, said builders pulledback on home starts after a “difficult period for the new home industry” inthe fourth quarter of 2008.

“… The convergence of bad news regarding the credit and equity mar-kets, in addition to the revelation that the U.S. economy was in a deeprecession, caused many new home buyers to cancel orders,” Wilson said inthe company report.

As a result, builders entered 2009 with higher than desired amounts offinished inventory, Wilson said.

The good news for the local market, Wilson said, is builders were able towork through much of the 2008 home inventory during the first quarter of2009, and anecdotal reports from builders regarding traffic and sales “havebeen very good for the past four weeks,” Wilson said. “With these recentlyreported sales I would expect to see a resurgence of ‘sticks in the air’ inApril.”

Closings outpaced starts again for the quarter with 4,096 units closed forthe quarter. The annual rate of closings, including those from the second

quarter 2008 through the first quarter of 2009, stands at 22,606 units. Wilson said the statistics show builders and lenders alike are “proceeding

with caution and discipline” currently with very little speculative building.Despite the declining start activity, D-FW home prices have held up well

compared to other parts of the country. For the first quarter of 2009, medi-an new home price stands at $207,906 in Dallas-Fort Worth, up from$207,755 in the fourth quarter of 2008 and $204,879 in the first quarter of2008.

“The fact that D-FW has a relatively balanced new and existing homeinventory has served the area well during the downturn” Wilson said. “D-FW does not have the supply and demand imbalances that have been disas-trous to home prices in many of the ‘bubble markets’ around the country.”

A plan to stimulate the housing market is missing How to rescue housing? The Obama administration

doesn't have a plan – or, more accurately, has only half aplan. It presupposes that preventing or minimizing homeforeclosures is a formula for revival.

It isn’t.Almost everyone agrees that a housing recovery is

essential for a broader economic upswing, in partbecause housing’s collapse brought on the recession.Mortgage delinquencies triggered the financial crisis.Tumbling home prices (down 26 percent from theirpeak) ravaged consumer confidence, borrowing andspending. Since late 2007, housing-related jobs – car-penters, realtors, appraisers – have dropped by 1 million, a quarter of all lostjobs.

Housing’s distress is too much supply chasing too little demand. Hugeinventories of unsold homes have depressed prices and construction. Giventhat prices rose too high in the “bubble” – homes were affordable onlybecause credit was dispensed so recklessly – much of this painful adjustmentwas unavoidable. But that process should be mostly complete.

Here’s a little-known fact: Housing may be more affordable now than atany recent time, thanks to lower prices and falling mortgage rates (nowabout 5 percent). The National Association of Realtors has an “affordabilityindex” that estimates the family income needed to buy a median-pricedhouse, assuming a 20 percent down payment and monthly mortgage pay-ments equal to 25 percent of income. Affordability is now the highest sincethe index's start in 1970.

Unfortunately, demand hasn’t followed affordability. In January, sales ofnew and existing homes continued prolonged declines, dropping 10.2 per-cent and 5.3 percent, respectively, from December. There’s a buyers’ strike.Why? Shouldn’t lower prices spur demand?

Well, yes. There are many theories as to why they haven’t. Perhapsprospective buyers can’t get loans. Or people are so gloomy that they'reafraid to buy. But the most important explanation is probably deflationarypsychology. If yesterday’s $250,000 house is now $200,000, it may be$175,000 by June. Waiting is better.

Unless this deflationary psychology is broken, it becomes self-fulfilling.The more buyers wait, the more prices fall; and the more prices fall, themore buyers wait. The Obama administration essentially ignores this prob-lem, though it can be addressed.

The simplest way is to bribe prospective buyers not to wait. For example:Give them a 10 percent tax credit, up to $15,000, on the purchase price of

a new home. Anyone who bought a $150,000 home would get a $15,000tax break. The credit would expire in a year. Waiting would be costly. Buyerswould delay only if they thought home prices would drop as much or more.

Precisely this proposal comes from the National Association of HomeBuilders. Normally, it would be an atrocious idea, because it would rewardpeople who would buy anyway and would be skewed toward wealthierbuyers. But now it’s worth trying.

Somehow, we need to cut bloated inventories (13 months of supply forunsold new homes), curb falling prices and stimulate new construction. Thehope is that once buying improves, it would feed on itself. People wouldjoin from the sidelines. The NAHB says its plan would create 250,000 jobsand cost $40 billion – big money but tiny compared with the hundreds ofbillions lavished on recovery programs. The Senate included the plan in itsstimulus, but it was later dropped.

It wasn’t an Obama priority. Some administration proposals, focused onforeclosures, are desirable. It’s sensible to allow Fannie Mae and Freddie Macto refinance older mortgages, at lower interest rates, even if homeowners’equity has dropped below today’s requirement of 20 percent. This wouldreduce defaults and increase borrowers' spending power.

Other ideas seem more dubious. For $75 billion, another proposal wouldsubsidize homeowners so their monthly mortgage payments dropped to 31percent of their income. Because that’s still high, many of these homeown-ers would probably default anyway. Even worse is the “cramdown” propos-al, backed by the administration. This would allow bankruptcy judges to cutmortgage payments. If passed, this would probably raise future mortgagecosts, because lenders would have less access to collateral.

In any case, minimizing foreclosures alone won’t revive housing. If therecession and unemployment worsen, foreclosures will increase, becausepeople without jobs and income can’t meet their monthly payments.

The best way to limit foreclosures is to achieve a housing and economicrecovery by stimulating buying. It's true that the recent “stimulus” planincluded a tax credit of up to $8,000, but that was restricted to first-timebuyers and made “refundable,” meaning people could receive the moneyeven if they didn’t owe taxes. These are younger and poorer buyers – theweak credit risks of today’s crisis. They won't rescue housing.

All this is telling. The administration and Congress, though pledging torestore economic growth, care more about protecting foreclosure “victims”and promoting homeownership among the young and poor. Politics trumpseconomics.

Samuelson’s column is distributed by the Washington Post Writers Group.

The fact that D-FW has a relatively balanced newand existing home inventory has served the areawell during the downturn. D-FW does not have thesupply and demand imbalances that have been dis-astrous to home prices in many of the ‘bubble mar-kets’ around the country.

– Ted Wilson,D-FW partner for Residential Strategies

Robert J. SamuelsonGuest column


What a dealForeclosures offer new investor alternativeBy Aleshia [email protected]

William Blackmon went to the Jan. 6 foreclosure anddelinquent tax auction at the steps of the TarrantCounty Courthouse with his wallet in hand and his eyeon a three-bedroom house in Fort Worth’s NearSouthside appraised at $112,000. After a short bout ofbidding, Blackmon walked away as the proud owner ofthe home for a whopping $37,000.

“I wanted to buy it so I can flip it, sell it to aninvestor wholesale,” Blackmon said, smiling. “You can’tget a much better deal than that.”

As the number of foreclosed homes continues tomount, monthly foreclosure and delinquent tax auc-tions at the steps of county courthouses are becomingmore than a place for seasoned real estate investors –they’re quickly becoming an alternative MLS for first-time investors like Blackmon and first-time homebuyerslooking for a good deal.

“What we’re seeing in many of the counties wecover is more and more individuals are starting to lookat the foreclosures as a good way of purchasing,” saidGeorge Roddy Sr., president of Foreclosure ListingService Inc., a foreclosure listing and tracking service.“Whether it’s for investment for income or to live in, ifyou can buy a house for 20 percent or more undermarket value, then you got a great deal.”

The auctions, on the first Tuesday of every month incounties across the state and nation, typically featuretwo kinds of properties: foreclosed properties sold bythe lender and delinquent tax properties sold by thecounty constable’s office to remediate property taxes owed to the county.

Jason and Diana Dyer attended the January auction for research, withplans to purchase a home with delinquent taxes at next month’s auction.The couple, who live in a local apartment complex, said they are anxious tobuy their first home, but want to make sure they are also getting “a gooddeal.”

“We wanted to buy a foreclosed home, but then a woman at work toldme about the auctions,” said Jason Dyer. “We plan on using our savings tobuy it.”

In both auctions, purchasers must pay cash or with a cashier’s check atthe auction.

Trustees for the foreclosed properties, assigned on a case-by-case basis bythe lender or an attorney hired by the lender, must post the properties forauction 21 days prior to the monthly sales.

That’s where a firm like Roddy’s comes in.Foreclosure Listing Service, like a few other local businesses, sells a list of

properties marked for foreclosure and tracks their outcome at auction.At the Tarrant County foreclosure auction in December 2008, a total of

1,423 properties were listed for sale. Roddy said the average selling price forproperties listed at a recent auction in December, 2008, ranged from 69cents to 73 cents for every dollar of the property’s appraised value, withCollin County averaging 72 cents to 75 cents on the dollar and DallasCounty properties netting between 67 and 68 cents on the dollar.

The bidders for the properties, however, aren’t just third-party buyers.To begin the bidding process, trustees announce a starting bid for each

property submitted by that property’s lender. Roddy said the bid historicallyhas been based on the outstanding mortgage plus any legal fees associatedwith the property, but as foreclosed properties continue to accumulate,Roddy said lenders have started to instruct trustees to open bidding 15 to20 percent lower than the original loan amount – and sometimes lower – sothey can use the auction as a tool to sell the property versus an avenue toclose the foreclosure process.

Even so, most properties at auction are repossessed by the lender, Roddysaid, because if no one bids against the lender’s starting bid, properties

insured by companies such as Freddie Mac and Fannie Mae can be sold bythe lender to the backing companies so lenders can re-cooperate theirinvestment.

But the system still has its flaws.Mike Hana, a real estate investor, attends auctions in several counties, but

said he had trouble finding the trustees for certain properties at the TarrantCounty foreclosure auction. Because of this, he wound up walking awaywith no new properties.

“At the Fort Worth auction, you are on your own,” Hana said. “There are10 to 15 trustees there and you don’t know who is a trustee and who isnot. It’s unfortunate because it doesn’t give you a good chance to get theproperty you want.”

Jim Gaines, research economist at the Texas A&M Real Estate Center,agreed, adding that foreclosure sales throughout Texas and other states willhave to become more regulated to handle the onslaught of foreclosedhomes predicted to hit the auction block this year.

“The sales now are very chaotic and difficult to navigate,” Gaines said.“And the trustees need only to announce their property once during theauction and if no one hears them, they’ve done their job and can leave andthe bank can buy the property for cheap.”

Homes listed to be auctioned at the April 7 event included 1,700 TarrantCounty homes, falling just 75 homes short of the record for most homesfiled for foreclosure auction in a single month, which was set in February2008.

Home postings filed for the Tarrant County April auction were up 32 per-cent compared to the April 2008 filings of 1,288.

Roddy said the increase is just in time as the auctions gain attention as analternate place to buy a home.

“People are getting smart,” he said. “Why buy a new house or one upfor sale when you can get a similar one that’s discounted?”

The auction certainly has made a believer out of Blackmon, who said heplans to return to future foreclosure auctions “as long as I’m makingmoney.”

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Investors swarm the Tarrant County Courthouse each month to buy auctioned properties.


Investors renew apartment interestBy Aleshia [email protected]

After watching her investment money flounder in the stock market,Arlington resident Nicole Graffis was a step away from viewing her mattressas her best investment option.

But after the stock market crash and the real estate market tumbled,Graffis decided to take a chance on the multi-family market – and she hasn’t looked back.

Graffis bought a 77-unit, Class C property in central Fort Worth, at 2901Travis Ave. and quickly began a $275,000 rehabilitation, changing the prop-erty’s name to Travis Gardens.

As the managing partner of a group of 16 investors for the property,Graffis paid cash for the asset after running into financing issues and plansto rehabilitate the complex, raise rent $25 per unit to bump up its cash-flowing potential and execute an exit strategy so she can move on to hernext property.

“In today’s market, it seemed like a great idea and so far, it’s comingalong nicely,” said Graffis, who picked up the property in foreclosure for$1.35 million – more than half a million less than its appraised value. “Iwanted a Class C property that I could put some renovation money into andsee a return – and I found just what I was looking for.”

And Graffis isn’t the only green investor eyeing the multi-family market.After selling a start-up company in 2003, Graffis was looking for a way to

grow her money when she heard of a program called Lifestyles Unlimited, areal estate education and mentoring group with a D-FW office.

Brad Sumrok, lead consultant and multi-family broker in the D-FW officeof Lifestyles Unlimited, said the Houston-based organization aims to educate

its members about real estate – both single- and multi-family – as well ashelp locate properties, broker deals and facilitate financing through its net-work of investors.

Though Lifestyles Unlimited was founded in 1990 in Houston, with the D-FW office opening in 2006, Sumrok said business has flourished in the lastthree months as he has seen a 25 percent increase in members.

Sumrok said a novice typically buys property when the market is up,meaning they are paying more for the property, when they should buy whenthe market is down so they can get a better deal.

“Is it better to buy clothes before or after Christmas? After Christmas, ofcourse, because it’s going to be on sale,” Sumrok said. “It’s the same thinghere. Right now real estate is on sale and … when we find a good apart-ment deal put up at the right price, it’s picked up quick. Maybe it will be onmore of a sale if we wait a bit longer, but no matter what, it’s on sale rightnow and our investors are ready and willing to deal.”

Sumrok said he typically advises investors to look for 20- to 500-unit ClassC properties built in the 1970s and ’80s that can be rehabilitated.

This month, Sumrok said he has several investors poised to close on multi-family properties, including a 388-unit property in Fort Worth and a 70-unitproperty in Arlington. And investors aren’t the only ones calling, Sumroksaid.

“All the brokers in town are calling me now because they know we’rebuying,” he said. “For the last few years, California Investors bought theseproperties sight-unseen, and were absentee owners. Now a lot of theseproperties are in foreclosure and we can pick them up and dust them offand bring them back to life.”

Drew Kile, regional manager of the Fort Worth office of Marcus &Millichap Real Estate Investment Services, said his firm has seen the gamut

Nicole Graffis decided to take a chance on an investment in a 77-unit, Class C property in central Fort Worth, at 2901 Travis Ave.

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of investors coming back to market, looking for multi-family proper-ties.

According to two recent studies released by Marcus & Millichap,multi-family property sales were inconsistent in 2008 as the D-FWNortheast Submarket, which includes Tarrant County property northof Texas State Highway 10 and east of Interstate 35, saw a 66 per-cent drop in sales during 2008 compared to 2007 due to “limitedaccess to capital and elevated investor caution regarding olderassets,” the report stated.

In a ‘flight-to-quality’ strategy, the Marcus & Millichap report stat-ed buyers targeted newer, stabilized assets averaging less than adecade in age, which resulted in median sales price more than dou-bling for the category to $81,500 per unit in the last year.

In Hurst/Euless/Bedford Submarket, however, multi-family assetsales volume nearly doubled in 2008 thanks to the area’s fifth con-secutive year of no new deliveries, which allowed the area to recordthe lowest apartment vacancy rate in the Metroplex, according tothe Marcus & Millichap report.

Still, occupancy levels are expected to contract modestly for thearea, the report stated, due to job loss and a growing number ofClass A renters may transition into more affordable, lower-tier prop-erties this year, which will push top-tier vacancy up and keep rentsflat and concessions high.

“While we’re bullish on the apartment market, you’re going to

have a couple of years here with rents ticking down a bit and occu-pation going down a bit,” Kile said. “Even though the market is inpretty good shape, we’re still seeing people double up in apart-ments or people moving back home with parents. There are goingto be some challenges in the short term, with cap rates up, whichmeans values are down, but locally the demand is going to be theremid- and long-term, which makes this a great time to invest, Iguess.”

Kile said apartment fundamentals typically perform well com-pared to other property types in a downturn.

“Strong population growth in this area through natural causeslike immigration will contribute to multi-family success, and thismarket is set up nicely because apartment development has beenfairly well constrained,” Kile said.

Despite the potential for opportunistic investing, Kile warnedthere could be danger for first-time investors jumping into themulti-family market without doing due diligence.

“The main people we’re seeing get hurt right now are the peoplewho were inexperienced and made bad decisions in the last fewyears,” Kile said. “A lot of people thought they could get into realestate because it was easy and they bought properties they nevershould have … They just need to make sure they’re getting goodadvice and know what they’re getting into.”

Fort Worth residential real estate:The good, the bad and the not-so-uglyThe Good

The value of real estate is strongly influenced by itssurroundings. That is why I believe Tarrant County is oneof the best places in the country to own residential realestate. We are fortunate to have a vibrant downtownarea, world-class museums, historic districts, entertain-ment venues, as well as rivers, lakes and sprawling parkareas that are second to none.

Real estate values here in Fort Worth and TarrantCounty have had their ups and downs, but through it allwe have remained as one of the strongest residentialreal estate markets in the entire country. Each month,Standard and Poor’s releases its Case-Shiller Home Price index, which trackshome prices in 20 of the largest metropolitan areas in the country.According to the most recent data, property values in Dallas and Fort Worthhave declined less than 5 percent, which is the least of any of the 20 mar-kets tracked. This is due to our continued ability to attract a strong anddiversified work force, which has resulted in Dallas and Fort Worth beingone of the fastest growing areas during the past 20 years. It is now thefourth largest metropolitan area in the country. Tarrant County’s rich historicpast coupled with its pioneering visionaries has laid the foundation that ismaking Tarrant County the envy of the country.

The BadWhile home ownership is a worthwhile goal and privilege, it is an expen-

sive privilege that many have found they cannot afford. The elimination ofsubprime mortgages as well as tightening lending standards and mortgagereforms, have resulted in fewer “qualified” buyers being eligible to be buy ahome. This also resulted in record numbers of foreclosures nationally as wellas locally. Although Tarrant County has not seen a significant drop off inhome values, foreclosures are prevalent in our market.

According to information from the North Texas Real Estate InformationService, the number of single-family home sales in Tarrant County hasdecreased 17 percent from a year ago. Furthermore, more than 26 percentof the sales that did occur were foreclosures sales and this does not include“short sales,” which are accounted for separately. Short sales are sales ofhomes where the sellers owe more on their home than it is worth, but thebank is allowing the sellers some additional time to sell their home, albeit ata loss.

To add insult to injury, the Federal Government has imposed several mora-toriums on foreclosures, which I believe are delaying thousands of homes inTarrant County from being placed up for sale. As these moratoriums are lift-ed, there will be a flood of foreclosures. These foreclosures will result inmotivated banks and lending institutions attempting to get these propertiesoff their books. This will cause continued downward pressure on homeprices until the inventory is absorbed. Therefore, the number of homes sell-ing may increase during the next several months, but prices are not going toget better any time in the foreseeable future.

It is hard for individuals attempting to sell their homes to compete withlending institutions that can absorb losses in the thousands of dollars with-out blinking an eye.

The Not-So-UglyAs previously noted, we are not immune to the overall downturn in resi-

dential real estate. However, compared to most other large metropolitanareas, Tarrant County has fared well. Our stability has helped insulate usfrom the roller coaster ride that other regions currently are experiencing.Because we never saw the huge run-up in home prices, we have not seen asteep decline either. This has kept our market moving and not stagnatinglike so many other markets in the country.

The Metroplex has been recognized as a leader in job creation and has adiversified economic base. Our low unemployment rate of 6.7 percent iswell below the national average of 8.9 percent and people migrate to wherethe jobs are. It also helps that Tarrant County is home to several Fortune 500Companies including American Airlines, BNSF Railway, D.R. Horton, XTOEnergy, RadioShack and Americredit. Tarrant County also is home to AcmeBrick, Williamson-Dickey, Justin Industries, Pier 1 Imports, Cash AmericaInternational and GameStop to name a few.

As we go forward our diversified economic base, natural resources, cul-ture and western heritage will all continue to be recognized as ingredientsthat have helped make Tarrant County one of, if not the best, place in thecountry to own residential real estate.

Scott Burdette is the managing director of IRR-Residential Valuation Consultants LLP and has morethan 22 years of experience in the residential appraisal profession. He holds the SRA designation fromthe industry leading Appraisal Institute.

Scott BurdetteGuest column


New campaign focuses on local housing industryBy Aleshia [email protected]

After watching consumer confidence in the local hous-ing market dwindle in recent months, the Greater FortWorth Association of Realtors decided to take mattersinto its own hands with the launching of its TGIFW, orThank Goodness It’s Fort Worth! campaign.

Unveiled to its Realtor members April 8, leaders of thelocal organization hope the campaign will capitalize onNorth Fort Worth’s healthier-than-most home sale and value indicators and downplay the nationalheadlines.

“As a part of our strategic plan, which was written inthe fall of 2008 for the ‘09 year, we assessed how wefelt our market was being affected by the national mediaand we knew our statistics locally and felt like we hadsome good stats to report,” said Sherry Matina, CEO ofthe Greater Fort Worth Association of Realtors, orGFWAR. “We are cognizant that there are pockets of theMetroplex that might be negative in some statistic cate-gories, by in part sales figures and appreciation are bothstable and we wanted to give the buying public the con-fidence to buy in ’09 when there’s a lot of national presspromoting that it’s not a good time to buy.”

According to an opinion survey issued by the GFWARin March 2009, through its Realtor members, organiza-tion leaders had the right gut instinct. Association mem-bers, brokers and affiliates sent electronic opinion surveysto about 1,800 individuals asking for input on the localhousing market. Of those, more than 350 responded –half of which were in the 40 to 59 age range, with evendistribution in older and younger categories for theremaining balance. All but 6 percent of respondentswere homeowners and three out of five valued theirhomes between $150,000 and $499,000.

Of those polled, 66 percent said foreclosures werenegatively affecting home prices and 42 percent ofrespondents said they are delaying real estate decisionsuntil the economy stabilizes.

The home values, however, are where the Metroplexshined, Matina said. In the public opinion survey, 3.5 per-cent of respondents said home values in their area wereincreasing while 45.1 percent said their area values weredeclining. The largest group – 51.5 percent – reportedstable home values in its area.

“Fort Worth may be the last place in the continentalU.S. where you can buy a really nice house for $100 perfoot. We just didn’t see the crazy rise in prices aroundhere and we didn’t see the fall-out. We’ve just beenbouncing along at 2 to 3 percent a year,” said BrantsRealty Broker/Owner Clay Brants, who also chaired theGFWAR Public Relations Task Force.

Brants said homeowners he has spoken to are con-cerned about the national market, but haven’t been ableto separate what’s happening in the local market. Casein point, he said, was a newspaper article he read inJanuary in the Fort Worth Star-Telegram, which featuredan Associated Press story asking readers ‘Have we hitbottom in the housing market?’

“It was a story about a New York guy who invested ina Florida house for like $80,000 and it was only worth$40,000,” Brants said. “… That doesn’t have anythingto do with North Texas and we quickly realized that theStar-Telegram, in an effort to cut costs, had cut reportersand was running these stories written by some guy in awindowless office in New Jersey about people in NewYork who were losing their shirts. Meanwhile, people

here are reading that and thinking our market is suffer-ing the same fate. And that’s just not the case.”

Matina said her organization took a cue from a Realtororganization in Tulsa, Okla., which launched a similarcampaign with the tag line ‘It’s a good thing you’re inTulsa,’ which highlighted the local industry. Soon after itslaunch, the Oklahoma Association of Realtors picked upthe effort and soon the story was picked up by newspa-pers across the state and eventually by USA Today news-paper.

“It improved their buying public’s moral and showedtheir area buyers that their market was not as all theother places being covered by the national news,”Matina said.

GFWAR brought in local public relations firm PaigeHendricks Public Relations Inc. to bring the campaign tofruition by creating a logo, a tag lineand a library of print- and camera-ready art for Realtor members to usein their own marketing.

“We wanted to take on the drivingforce role behind this; really give ourmembers some information to standon when they do their own advertis-ing and marketing to clients,” Matinasaid.

After reviewing the survey results,Matina said she was surprised to seea lot of people think they want to buya house, but not many think theywant to sell because they are con-vinced they couldn’t get a suitableoffer.

“But with rates these low, there’sgoing to be an increased demand forproperties and we have to havesomething to sell them,” Matina said.

As home builders are at a relativestand-still, Brants said he agrees withMatina.

“With builders putting the brakeson new home building activity …investors are trying to snap up all ofthe foreclosures so we need peoplewith existing houses to step up andput theirs on the market,” he said.

Brants said the slow down in newconstruction in North Texas during the past two yearsdrastically has reduced the number of new homes avail-able to area buyers – and once consumer confidencecomes back and more people are in the market to buy ahome, consumer confidence will create an instantdemand for properties.

“We’re already short of good properties to sell rightnow,” he said. “And people are looking to buy, but theyhave one to sell, too. But if they can’t find one they like,they’re not going to sell theirs and it creates a stand-still,which is crazy because of the rates right now.”

Thanks to federal government aid, the national mort-gage rates are at historic lows – a factor Matina said was“not just a pivotal factor, but the pivotal factor in all ofthis.”

“Interest rates are crazy low and we’ll never see themlike this again,” Brants said. “They’ve got to come up tofight inflation and I think people who are a little scaredto buy now are going to look back in five years andthink ‘why didn’t I pull the trigger?’”

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