| Steve Brown: New-home sales, starts increase 04/13/2001 By Steve Brown / The Dallas Morning News The pre-owned home market is showing signs of a slowdown, but there's no stopping the residential building sector – so far.
| Top office investment markets |
Dallas' suburbs ranked No. 8 in a recent study that evaluated investment opportunities in suburban office markets. The top 10:
1. San Diego
2. Austin
3. Sacramento, Calif.
4. Washington
5. Phoenix
6. Denver
7. Boston
8. Dallas
9. Atlanta
10. Orange County, Calif.
SOURCE: Integra Realty Resources Inc.
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New-home sales in the Dallas-Fort Worth area were up about 1 percent in the first quarter of 2001 compared with a year ago. And new-home starts rose by more than 3 percent.
"In the face of a slowing national economy, local housing activity set new records in the first quarter of 2001 due to continued strong job growth, falling mortgage rates and increased residential development," said Michael Dewers, manager of American Metro/Study Corp.
Builders sold 7,135 single-family homes in the area in the first quarter and started about 7,542 houses.
Mr. Dewers said the market is strong, but he sees signs of cutbacks. "For the first time since the stock market peak in March 2000, builders have started to express a slowdown in aggregate demand for upper-end production homes and custom homes," he said. "The biggest slowdown seems to be for product in the $250,000 to $450,000 price range."
And Mr. Dewers predicted that builders would have a hard time raising prices, even if interest rates continue to fall.
"Our historical report on house prices shows that some builders are lowering prices on homes in many parts of the metroplex," he said. "With a roaring stock market, escalating wages and a tight labor market, builders were able to raise house prices considerably over the last three years. Those times are changing as home buyers' wealth and job security erode."
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Brokerage and research companies used to scramble to be the first out with the quarterly office market update. But lackluster first-quarter leasing may have changed that. Office demand was much weaker in the early months of this year, and no one is in a hurry to bear bad news.
| New home sales and starts |
Sales and starts of new homes continued to be strong in the first quarter of 2001. Here's a comparison of first-quarter sales and starts since 1991:
1st quarter - Starts - Sales
1991 - 2,835 - 2,798
1992 - 3,795 - 2,404
1993 - 4,386 - 3,737
1994 - 5,313 - 4,516
1995 - 4,257 - 3,951
1996 - 5,706 - 5,030
1997 - 4,991 - 4,928
1998 - 6,360 - 5,685
1999 - 7,838 - 6,336
2000 - 7,287 - 7,043
2001 - 7,542 - 7,135
SOURCE: American Metro/Study Corp.
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When the first-quarter office numbers are released, look for only a modest gain or a slight decline in Dallas-Fort Worth-area office occupancy. Office developers and investors hope that the leasing slowdown – like the nation's economic slowdown – turns out to be short-lived.
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Office building owners can find one bit of good news in a new report by Integra Realty Resources Inc. The New York-based appraisal and consulting group picked the suburban Dallas office market as one of the country's top choices for investors. Dallas ranked eighth, just ahead of Atlanta. San Diego was the top pick, followed by Austin.
Integra predicted that suburban office values will rise slightly – by 4.3 percent – during the next three years. But downtown office values will fall by .5 percent between 2001 and 2003, the company said.
Dallas was the only downtown with a decline on the list of almost 50 cities.
Steve Brown is Real Estate Editor of The Dallas Morning News.
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