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Husband, father, inline skater, cycling and triathlon athlete and sometimes coach, graduate civil engineer, commercial and residential and commercial Broker Realtor® working in Ellum, Expo Park, Munger, Peak Suburban, PD 98, PD 269, Swiss Avenue, Baylor PD, all of in-town east Dallas, former home building land acquisitions executive, home builder, home designer (chief architect X3 design solutions), LEED Green Associate (GA), NAHB Green Professional (CGP), NAHB Graduate Builder (CGB), Universal Design and Accessability student and Certified Aging in Place Specialist (CAPS), Advanced Historic Home Specialist certified by Preservation Dallas..........EdgyDad is Biff Bailey of Dallas, Texas

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Fourth Quarter New Home Starts Sag - Light for Higher Prices, Teardowns

DMN Article on MetroStudy's report for 4Q2011. Opportunity seen for upper price range. There has been a flurry of tear downs in my Forest Hills last two weeks......

Last Update: 2012-07-04 11:26:44

New-home sales, starts sink in Dallas-Fort Worth

12:00 AM CST on Thursday, January 6, 2011
By STEVE BROWN / The Dallas Morning News

Homebuilders hoped that 2010 would be the comeback year for the battered Dallas-Fort Worth housing market.

But after a flurry of sales early in the year, buyers retreated, forcing builders to cut back on construction.

North Texas builders started only 3,341 homes in the fourth quarter – 10 percent fewer than in the same period of 2009, housing analyst Metrostudy Inc. said Wednesday.

At the same time, the number of new homes sold in the final three months of 2010 fell almost 20 percent from a year earlier.

"Those numbers are definitely unwelcome news to a sector of our economy that has been down for such a long time," said D'Ann Petersen, business economist with the Federal Reserve Bank of Dallas . "They show the North Texas housing sector is still weak, despite the temporary uptick from the tax credits.

"The high level of foreclosures and existing homes on the market will likely continue to dampen new-home demand and construction in the near term," she said. "The good news is that job growth continues to be positive, and builders' inventories are relatively lean."

Residential starts in North Texas last year were more than 70 percent below where they were at the peak of the market in 2006. And it was the lowest total for fourth-quarter home starts in the D-FW area in almost two decades.

"Certainly there was a lot more optimism in the first part of 2010," said David Brown, director of Metrostudy's Dallas-Fort Worth office. "But the surge in activity early in the year clearly was driven by the homebuying tax credits.

"As soon as they went away, we saw sales drop off," he said. "Sales are not continuing to drop off, but we are not seeing them kick back up yet."

The North Texas new-home market is "bouncing along the bottom," he said. And Metrostudy is predicting only about a 10 percent to 15 percent uptick in new-home building in 2011.

"Our expectation is it will be relatively flat this year," Brown said. "None of the builders we talk to are planning big growth."

Residential buyers who are in the market for a new property won't find much to pick from. There are only 3,500 finished, vacant new homes available in the D-FW area, Metrostudy estimates.

And total new-home supply has fallen to just 5.5 months' – below what is considered a healthy market.

Many traditional new homebuyers have been lured to the pre-owned market, where they are taking advantage of foreclosure sales and depressed prices in some neighborhoods.

"New-home construction isn't going to go anywhere until foreclosures and other distressed properties clear the market," said Jim Gaines, an economist with the Real Estate Center at Texas A&M University . "There are probably some opportunities in upper-price market for custom building, but almost none in the lower, entry-level market."

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