Well, its that time of the year again where everyone is packing up and heading off for the holidays.  Some are taking family trip while others are heading home to be with family anf friends.  For me, its back to my home town of Dallas!

As someone who is tied into the international condo markets and watching the housing market statistics from city to city, it is always great to see what is happening with Dallas condos.  Unlike some of the other major markets, Dallas was never overrun with speculators and investors to the same degree that other markets were.  The surges of condo investments and speculating are, as we all know, the driving forces in the overvaluations in the marketplace.  Most Texas cities have seen more steady growth which means condo owners have not seen the huge increases in equity, but they have also now not seen the massive devaluations and foreclosures like other cities.

Many new developments such as the Dallas condos at W Victory Park and The Ritz Carlton are still selling well.  The absorption rates for Dallas condos is still relatively healthy.  Some builders that got in late in the game have not gone through with some of their grand schemes for converting vacant offices to luxury condos, but others are moving forward on huge highrises with units from $1MM. 

Museum Tower in downtown Dallas is looking strong.  One of the interesting issues we see is that the high end of most condo markets are still holding steady...mainly because these condos are purchased by affluent individuals or foreign investors who do not care about the market fluctuations.  In the long run everything will correct like it always does!

As I was mentioning the other day, Downtown Dallas is under a great transition.  Museum Tower will be located just adjacent to one of Dallas's icon office buildings, Trammell Crow Tower (my former place of office when working in Dallas).  This modern luxury masterpiece will offer 42 stories of 125 condos ranging from one bedrooms to 6 bedrooms in size.  These Dallas condos will not be your typical downtown residence.  These high end condos will start at $1,000,000!

The question is: does Dallas have a market to absorb these types of high end homes in the downtown area?  The project will be delivered in 2010, but reservations will start taking place very soon.  Some local real estate experts are concerned about how this will affect another new urban condo/office development already half way sold out...One Arts Plaza.  I do not feel that Museum Tower will affect the sales of One Arts Plaza at all.  These are two completely different product types.  yes, essentially both offer new modern condos but the price points are different and One Arts has a huge head start. 

Museum Tower, though pricey, is expected to do very well.  This will really be the first new construction Dallas condo high-rise of its kind in the downtown area.  Other high end luxury condos in the area include The Ritz Carlton Residences whose sales are going very well. 

Dallas has always been quite a unique real estate market, but has never really been known as a condo market until the past few years.  With new urban centers and residential developments like Victory Park in the heart of the city, more young professionals and families are making the move back to the core of Dallas.  Dallas has had the traditional "sprawl" effect throughout the last 20 years as more people and corporations move to the suburbs. 

The areas immediately surrounding downtown like Turtle Creek and the Park Cities have been developed for years with high end single family homes, hotels, and retail.  Finally developers started looking to the industrial areas around downtown Dallas for new urban development opportunities, new Dallas condo development, new sports arenas, and hotels.  Eventually this trend caught on and new infill projects started popping up all over the place.  The next place to look was actually in the core of downtown which for years has primarily been office and some retail.  There has not been much infrastructure or residential opportunity to give downtown Dallas much life after 6 PM.  Of course, there are areas like Deep Ellum and uptown that thrive with nightlife, but in the actual center of downtown, not much happens after work.  This has started to really change in the last few years.

Being from Dallas, I am a bit biased with my opinion of the city.  Dallas has truly developed into one of the greatest cities in the country over the past ten years.  With so many people looking back to the core of the city and with new mixed-use retail and condos being development in the uptown and downtown area, the face of Dallas has completely changed.  More young affluent professions are seeking the live, work, and play environment and buying new Dallas condos in the city rather than the suburbs or North Dallas.

In my previous blog post I was discussing the creative selling and financing tools builders are using these days to move units.  We discussed bulk purchase as a popular financing vehicle for pre-construction condos and how it is a viable method for builders to meet early pre-sale requirements and hit the sales path with “50% SOLD”.  As a post financing strategy it doesn’t make as much sense because the buy/investor does not typically close on the contract. 

I mentioned the real estate auction as a useful strategy for selling units on the back end.  The auction, like other sales strategies, has been around forever and is not a sign of distress necessarily.  It is a great marketing tool and can create a great buzz about the property early on or towards the end of the sales cycle.  For example, Sheldon Good and Company, with whom NCO is partnered, offers these types of auction services and is one of the most prestigious companies in the country. 

Gameday Centers from Atlanta has been in the business of developing mixed-use luxury condo projects near college stadiums with the intention of providing second homes for avid college football fans.  These new condos come fully furnished and provide college alums a place to live while in town for their favorite sporting events as well as a great investment vehicle.  Owners are allowed to rent the units out in the off-season to anyone over the age of 25.  This obviously excludes most undergraduate students. 

Gameday Centers was in the process of moving forward on a new $20 million condo project near Texas A&M stadium but have recently backed out of the deal with no explanation.  Southeast Property Management CO. owns the two acre parcel and is apparently already in the process of taking on another prominent developer to take over the project.  Whether the original plans will go through or not remains to be seen.  Some early buyers already have deposits of up to $18,000 in the project but will have the opportunity to withdraw at full refund if they do like the plans proposed by the new developer. 

It seems like an interesting concept that would focus mainly on investors rather than end-users or people looking for a primary residence.  Maybe Dallas condos could benefit from this unique idea.  Although I do not foresee too many wealthy SMU alums purchasing condos in Highland Park just to fly in occasionally to see the Mustangs play!  SMU is my alma mater so I have the right to make fun of them as do all the people who have put money towards their football program.