Dallas Developer ‘Throws In The Towel’ On Condos
The Dallas News reports on the condo bust in that city, with the subtitle, ‘Three recent projects have been canceled, but no reason to panic.’ “At times it seems like all of Dallas is going condo. From high-rises in Uptown to new projects in the ‘burbs, residents are embracing the lifestyle. Even businesses have gotten into the act, buying office condo space instead of leasing.”
“But in the real estate industry, there can be too much of a good thing. Developers of an Addison condo complex have canceled the project after pre-sales failed to meet expectations. It’s the third Dallas-area condo deal to be dunked in two years.”
“Last September, an Oak Lawn condo conversion, the Rienzi, switched back to rentals after a slow sales start. Before that, the Caruth apartments near NorthPark canceled a condo conversion after months of marketing.”
“So what does this mean for the local condo market? There is no sign of a condo crash like we saw in the late 1980s. With the collapse of the regional economy back then, it wasn’t uncommon for condos to lose half their value or more.”
“And in North Texas, it’s not the same situation you find in Las Vegas, where more than a half-dozen high-rise residential buildings have gone under before the first spade of dirt could be turned. Construction costs were rising faster than sales prices.”
“Like any real estate deal, unless the price, location and quality are a hit with consumers, the project won’t fly. Only time will tell how many North Texas residents will want to live in a high-rise. That holds for office condos, too.”
“In late 2004, developers announced they would turn the 2525 McKinnon office tower near the Crescent into office condos. But recently they threw in the towel and hired Stream Realty to lease the building.”
This is a good example of how these condo projects were created to take advantage of a boom, not to satisfy some pent up demand for urban living. From a little farther down in the same report:
‘ The town of Fairview and developer MGHerring Group have reached an economic development agreement that will provide about $50 million in incentives for development of the Village at Fairview, a 1 million-square-foot, mixed-use shopping center on U.S. Highway 75 in Collin County.’
These condo projects got similar goodies; that’s how the Texas RE business works.
From high-rises in Uptown to new projects in the ‘burbs, residents are embracing the lifestyle.
What a joke. Nobody’s “embracing the lifestyle” of apartment living, especially in the “burbs” where you don’t even have the typical urban attractions to compensate. The only thing people are embracing is the same speculative mania that is now turning to financial nightmare for thousands of Floridians. In the case of Dallas, many of them probably aren’t even Texans. Californians, most likely.
True dat. There’s a reason condos are always the first to go down and the last to go up! Nobody willing embraces the lifestyle of cramped, noisy, difficult, public living.
Very likely Californians. I recently was told of a neighborhood, not too far from me, where the neighbors are all getting together to go on a “business trip” to Texas. They are going to use some of their equity, pool it together and buy some “investment properties” I’m keeping a mental note NOT to drive down that street when sh!t hits the fan. Can you imagine how pissed off, bitter and resentful they are all going to be at each other. Each blaming the other for this grand idea.
I am just FLOORED. Don’t these people *read* at ALL? Use common sense AT ALL? I’m with you, LA….when the sh*t hits the fan, you don’t want to be in the area.
Sad…just sad. [(mumblin' under my breath) Frikkin' dumbasses] I just want to SHAKE them.
BayQT~
Agreed, it’s sad-
But not too surprising either… does anyone remember the quote by the famous _________ so and so “when the shoeshine boy is talking about stocks to buy, it’s time to get out of the market”
Someone please post the actual quote??
My only point here is that ignorant DICKHEADS will always chase the “quick money”… usually at the tail end of a cycle, where they indeed will be roasted!
No, these are Californians. Trust me, they don’t read.
While it’s highle possible that they don’t read, let’s give them the benefit of the doubt and say they read the LA Times. I read it every morning, and there hasn’t been ANYTHING negitive about the real estate market. Last week when people were picking on Lansner, I kept thinking how lucky the OC Register readers were to at least have someone tracking and reporting something, even if the reporting wan’t as bearish as many would have liked it to be. At least there is some light shed on what is going on. Readers are at least give a bit of a “heads up” and can then go on to other sources to investigate further if they like. But if you look to the LA Times as your only source of news, then you are in the dark.
OOps sorry fo the typos
Hopefully you still get the gist
That’s why CA will go down with Dallas. CA speculators will be forced to sell their CA homes to pay for the big losses in Dallas.
They used equity on their OC home to buy in Vegas, then when that tripled they pulled equity to buy in Phoenix, then moved on to Texas with Phoenix equity money.
I believe Idaho is another one where the rolling bubble is driving up prices now… Boise I believe…
It’s that game of R.E. Musical Chairs GetStucco mentioned a couple of weeks ago…
I thought I heard that Salt Lake City was a new investor target as well…can anyone confirm?
“… about $50 million in incentives …”
Whose $50 million pays for those incentives?
Just saw the first “Public Auction” sign in my town in CT. For the past 16 years I’ve lived here, I have never seen it. It’s quite a contrast to those colorful balloons and smiling realtor faces. My 11 yro daugher has a project on “Great Depression”. Do you think I should show her the sign?
I saw my first foreclosure sale ad in the weekly “Residences” real estate section in our local paper (the Palm Beach Post) this past Sunday. I forget the exact price, but it was a relatively upper-middle class home (in a neighborhood called Abacoa, listed for something like $450,000 - $500,000).
None of this suprises me. Ben, that D Magazine article I sent you was commissioned by local RE agents and condo developers, I am certain. They want to get their projects sold to the dummies from out of state before the window closes for good. Nobody but nobody wants to live in an expensive condo in Dallas, Texas. As I have said repeatedly, for what you pay for one of those, you can buy a house in the Park Cities.
At least they are wise enough , or lucky enough, to cancel these projects .
i can feel the energy today here at hb2. you know, like a bully in the playground who finally gets knocked down and everyone rushes over to kick him.
and so it is made possible with the world wibe web.
hey ben, yer doin a great job today.
Let’s face it — we have a strong wind at our backs!
I hope San Diego is paying attention. . . Our downtown condo glut is the canary in the coalmine for the rest of the County.
At least they offer nice views of the harbor from the upper floors. Too bad so few people actually live up there…
I say: “San Diego condos for everyone!”
Why anyone would want a condo in Texas is beyond me. In DC, I can see it as this area is so overcrowded, but there’s enough land in Texas that you could give every man, woman, and child on the planet earth their own private acre.
‘Three recent projects have been canceled, but no reason to panic.’
FIRE!!!
Read about AP
New Home Sales Down by Most in 9 Years
Friday March 24, 1:19 pm ET
By Martin Crutsinger, AP Economics Writer
New Home Sales Plummet in February by Largest Amount in Nearly Nine Years.
“WASHINGTON (AP) — Sales of new homes plunged by the largest amount in nearly nine years in February while the median price of a new home dropped for the fourth straight month, providing fresh evidence that the nation’s once-booming housing market is cooling off.”
I’m confused. Wasn’t the news good yesterday on sales?
That right , within one day opposite news ……interesting
The existing home sales were reported by the NAR. The new home sales were reported by the Commerce Department.
I’d rather trust the less evil, the Commerce Department. Why would anyone buy a more expensive used home when new ones are getting cheaper?
Reason is “NAR is lying thru its teeth!!!”
I have not read their details - but CAR, MAR all the XYZ AR’s are coming out with weak data. New home sales confirm it.
It could be that “seasonal adjustment” caused this discrepancy, but how can NAR data be different than the regional realtors.
January was warm, so seasonally adjusting with make data more optimistic, agreed. So, are regional realtors reporting “raw” data??
Anyway, either NAR lied or their later data must come worse than regional guys. You have to adjust the “seasonal” data, so that if you increase january, you reduce june. The total comes out as 1.
whatever the consequences, pending sales are being reported down by ~30% all over, therefore april data will be weak too. This market is now TOAST!!! We are crossing the inflection point, therefore the only unresolved question is the slope or speed of decline after the sring ralls fails to materialize !!!
BTW, my claim of 30% down comes from a san diego realtor’s website http://bubbleinfo.squarespace.com
He seems to a good guy, though seems concerned about his future prospects.
Vstn, thanks for the plug,
I’m concerned about sellers who NEED to sell their house like they need air to breathe, who hire an agent who is clueless.
The sellers get lousy advice and list too high, scramble too late, and end up either losing big money, or the house, or both.
My intention is to at least have a community resource for people to see the facts, and hopefully make the right decisions for themselves, with or without the help of their agent.
I wish the RE machine would provide the same data across the country, heck, IF I CAN DO IT, SO CAN NAR!
bubbleinfo.com
P.S. See you at La Paloma?
“So what does this mean for the local condo market? There is no sign of a condo crash like we saw in the late 1980s. With the collapse of the regional economy back then, it wasn’t uncommon for condos to lose half their value or more.”
Sure glad to hear that won’t happen again this time…
I’ve been reading this guy’s articles for a while now. He is a complete shill for the local RE industry. His illogic never amazes me. The great condo crash of 2007 is on its way.
never ceases to amaze me. I wish I would proof a little better in the morning.
I exchanged emails once with Burns. He truely doesn’t get it.
Come on ya all, you aren’t thinking clearly. We are about to see all them baby boomers retire and they is gonna need a high rise condo that can eventually morph into nursing homes for their elder years. They’ll already be paying the room rent, food can be catered in, and a clinic and pharmacy can be established on the ground floor. The property owners might have to pay a little to retro fit wider doorways, a ramp here or there, and maybe increase access to the shower. The state can even give the building a break on property taxes if they only allow those buying in to be 65 yrs old or older. I can see it now, SD elder square as a tourist stop.
‘Three recent projects have been canceled, but no reason to panic.’
NOTE TO SELF: when news organizations across the country continue to preface article content by saying the likes of “meltdown of the market is not a possibility” or “no reason for panic”… start hedging bets that PANIC WILL INDEED SET IN, and it’s just a matter of time before the herd does start to trot to the exits.
FIRE!!!
Slightly OT, but this article reminded me of the recent Larry King interview of THE DONALD.
Larry asked about his real estate projects and he rattled off a bunch of condo conversion projects he is currently building- but his body language was suggesting apprehension… I think even the Donald knows it’s over. The national market has indeed been TRUMPED.
Ironic. He got killed in the last real estate bust too. You’d think he would have learned.
You’d think his lenders would have learned…
But then remember the old saying about the guy who borrowed enough so that he owned his bank; The Donald at least learned one useful trick at Wharton…
If the Donald now knows that RE is toast, why will he be in SF tomorrow to continue pimping it on, along with all of the other RE speakers (please note sarcasm).
San Francisco Upcoming Special Events:
Saturday, March 25, 2006
SAN FRANCISCO - Real Estate Wealth Expo - One Weekend Can Make You A Millionaire with Keynotes Donald Trump and Robert Kiyosaki, 08:00 AM to 09:00 PM
$179 Weekend Pass - The Keynote Hall is now Sold Out. GOOD NEWS! We have opened up a Satellite Room. This room is located right in the convention center and you will see all the Keynote speakers Live on Video. Of course, you can also attend all 72 seminars and the Exhibit Hall. These 72 seminars ARE IN PERSON.
SAN FRANCISCO - Real Estate Wealth Expo - One Weekend Can Make You A Millionaire with Keynotes Donald Trump and Robert Kiyosaki, 08:00 AM to 09:00 PM
$499 VIP Weekend Pass (MAIN HALL) - See All the Keynote Speaker Up Close! Includes Exhibit Floor, 72 Free Seminars, VIP Check In, VIP Seating for Keynotes Donald Trump and Robert Kiyosaki. Very Limited Seating Includes both Sat. & Sun. Admission.
SAN FRANCISCO - Real Estate Wealth Expo - One Weekend Can Make You A Millionaire with Keynotes Donald Trump and Robert Kiyosaki, 08:00 AM to 09:00 PM
$179 Satellite Room - $50 Off for the Next 300 people! This room is located right in the convention center and you will see all the Keynote speakers Live on Video. You can attend all 72 seminars and the Exhibit Hall. These 72 seminars ARE IN PERSON. The Satellite Room is selling out too…register ASAP!
Well said Need 2 Leave CA…
Why is The Donald in San Fran??
Because the ultimate R.E. PIMP got caught with his own pants down… and nothing like using his FAME to try to have Book + Tape merchandising SALES cover his @$$ets.
because he is getting paid to speak.
These Learning Annex “wealth expos” are just ways for people to get a large captive audience in order to hawk their wares (books, seminars, cds, tapes, dvds) that relate to real estate investing. They are also useful in “bucking up” the speculators/investors with cheerleading tactics that would make a timeshare sales meeting look tame.
However, these seminars are also an excellent way to find out where the next wave of lemming real estate investments will happen…”no, no, no, ABQ is SOO last month, we’re advising our clients to invest in Buffalo, NY…”
I went to a local RE investment club out of curiousity. Some people talked about going to these things. The people that at the RE club that went were not the sharpest tools in the shed and I felt like they were totally being taken advantage of. It’s sad.
Unbelievable! Suze Orman and Robert Kiyosaki, both of whom have warned that the end of the bubble is near, are participating. I wonder how they sleep at night, knowing that people will be financially destroyed trying to actually follow the “advice” given here. Oh, and Magic Johnson too — can’t wait to hear what he has to say about becoming a real estate mogul. Like listening to Larry King talk about how to play basketball.
Note to self: Laugh really hard at the people that use their equity to run up real millionaire debts in one weekend.
And as for Dallas not crashing now, as in the 1980s. Remember, back then, they did not have all this exotic financing. So it should be OK for these floppers.
I can’t believe my luck. Two years from now my daughter will be going to school in a bubblezone. We’ll buy a condo for diddleysquat (that’s a low price for those of you in Yorba Linda) and save thousands in housing costs.
Well, Donald did get caught with his pants down, with child #5. Better sell a lot of tapes this weekend. Donald, wife, and baby are so proud.
Well said about ultimate PIMP in RE.
You’d have lotsa kids too if you had flaming orange hair…
Reading posted comments in this blog the past few weeks has been insightful, dead-on accurate and best of all, some have not lost their humor during a time of upcoming complete economic implosion. What many may figure as a “get what they deserve” - I sense that this will be bigger than the dirty 30’s…actually, history books this will be the “be all” of economic crisis! Do people believe that a drop of 30 -40 - 80 % will smack around those flippers and those who took on too much debt, this time round, there’s no saving anyone> Thinking of selling - try 7 years when cities resort to tearing down unwanted homes to reduce supply. This is only the outter images of what our little minds can forsee. “hopefully wrong” but our fragile society is based on an illusion - for years we have become believers that excess brings wealth, so lets create even greater excess -but soon - gone. Need to get some bread, fill up the car with gas - well, lawlessness will engulf our society. The images of Mad Max seem to be not so unbelievable when the entire ecomony comes to a halt…do you think Bin Landen has forgotten or doesn’t know what the american economy is facing - he’ll strike when the coals are red hot…that will be the death nail. So, stock up water and canned foods?….would, but don’t let the neighbors know - when rational thoughts turn to irrational thougths..dig a deep hole and hope no one comes a knocking. Thats my silly 2 cents. As my granddad used to say…there will be a time when our faith in the system is gone….then the only faith will be from above cause that will be the only thing to save you!
The Donald has also been trying to get developers to pay him money in exchange for the right to promote their projects as something he’s involved with. Tried that here in Minneapolis; the developer told him, “Hell, no.”
Trump’s in the mortgage business, too:
Among other deals in the works, Trump Mortgage has also been hired as exclusive broker to hypothecate a $25 million mortgage for a 200,000-square-foot building in Columbus, Ohio, in which Trump would sell the mortgage to another investor. Finally, Trump has been retained to bring in equity and debt on a 64-unit condominium development in Hendersonville, N.C., a highly upscale area, in a deal expected to close by early May. Trump Mortgage is also exploring potential projects in the Dominican Republic, Central America and South America for resorts.
Ridings couldn’t end this morning’s interview without stating the standard Trump line. “As Mr. Trump has said, we want to be the biggest and the best in the mortgage industry,” he said. “Our goal is to create a safe and simple place for people to acquire financing. We know we’re going to make plenty of money, so we want to (focus on) helping the client.”
From an article at http://www.commercialpropertynews.com/
By the way, that site’s also conducting a poll on the future of the condo market:
“In what inning would you place the national condominium development and conversion market?”
Our goal is to create a safe and simple place for people to acquire financing.
That says it all. Financing isn’t supposed to be easy to obtain. It’s supposed to be hard. That’s what used to keep idiots from getting money for bad investments.
7th inning. Just finished the stretch and the “Ball Game” song is done. They are hoping for the home heros to rescue in the bottom of the inning. Small crash in top of 8th. And the big one (long lasting) for the 9th. These comments are precious. I only wish we were there to heckle the Annex sheeple, wearing a Mr. Housing Bubble T-shirt.