Housing slows..more apartments in uptown and another big office sale
Steve Brown:Builders cautious about future sales
But Texas, Southwest are showing strength, Horton and Centex say
11:06 PM CDT on Thursday, July 27, 2006
Misery loves company – the old saying goes.
And news in the last week about setbacks for local homebuilders found a wide audience.
First in line to spread word of woes was D.R. Horton Inc., which slashed its earnings estimates, then said it was dropping $57 million to get out of land purchase deals.
Horton officials blamed a rapidly cooling single-family home market – particularly on the West Coast – for its financial setback.
Then this week, Centex Corp. chimed in with its own 31 percent drop in earnings and a $36 million write-off for canceled land deals.
The Centex and Horton disclosures only confirmed what housing economists have been warning for months: Some of the country's overheated housing markets have turned cold.
If there was any good news from these big builders' reports it was that their home sales in the Southwest and Texas are still increasing.
Horton's Texas sales were up 20 percent in the most recent quarter, while Centex saw a 6 percent increase in its Southwest region sales, which includes Texas.
"There are significant differences in markets today," said Centex CEO Tim Eller.
"The Carolinas, Texas and the Pacific Northwest are showing strength."
In California, where sales are spiraling, Mr. Eller blames investors who have bolted from the market.
But even in stronger markets like Texas, builders would be smart to cut back on spec construction and not to count on continued strong sales.
Horton CEO Don Tomnitz had the most insightful comment on the situation.
"Every time we've gone into a downturn in the homebuilding industry, they've always been longer and deeper than we've imagined," Mr. Tomnitz warned analysts last week in a conference call.
Indeed, history shows that's always the case with real estate downturns.
And while North Texas may not be suffering from a real estate price bubble, a sharp drop in home sales can pull the rug out from under the best market.
Fitzhugh apartments
One of the country's biggest apartment builders is working on an in-town Dallas deal.
Trammell Crow Residential has contracted to purchase a development site on Fitzhugh Avenue just east of North Central Expressway.
The location is a block from FirstWorthing's new Cityville rental community.
Crow Residential has already put in a zoning request for the apartment community it plans to build there.
Premier Place
A CB Richard Ellis investment fund has completed its purchase of the 20-story Premier Place office building on North Central Expressway in Dallas.
Located next door to the Mockingbird Station shopping center, Premier Place was sold by Cornerstone Real Estate Advisors, an affiliate of Massachusetts Mutual Insurance Co.
The 400,000-square-foot glass office tower was built in 1986.
Andrew Levy and Todd Savage with Holiday Fenoglio Fowler negotiated the sale with Gary Carr with CB Richard Ellis.
But Texas, Southwest are showing strength, Horton and Centex say
11:06 PM CDT on Thursday, July 27, 2006
Misery loves company – the old saying goes.
And news in the last week about setbacks for local homebuilders found a wide audience.
First in line to spread word of woes was D.R. Horton Inc., which slashed its earnings estimates, then said it was dropping $57 million to get out of land purchase deals.
Horton officials blamed a rapidly cooling single-family home market – particularly on the West Coast – for its financial setback.
Then this week, Centex Corp. chimed in with its own 31 percent drop in earnings and a $36 million write-off for canceled land deals.
The Centex and Horton disclosures only confirmed what housing economists have been warning for months: Some of the country's overheated housing markets have turned cold.
If there was any good news from these big builders' reports it was that their home sales in the Southwest and Texas are still increasing.
Horton's Texas sales were up 20 percent in the most recent quarter, while Centex saw a 6 percent increase in its Southwest region sales, which includes Texas.
"There are significant differences in markets today," said Centex CEO Tim Eller.
"The Carolinas, Texas and the Pacific Northwest are showing strength."
In California, where sales are spiraling, Mr. Eller blames investors who have bolted from the market.
But even in stronger markets like Texas, builders would be smart to cut back on spec construction and not to count on continued strong sales.
Horton CEO Don Tomnitz had the most insightful comment on the situation.
"Every time we've gone into a downturn in the homebuilding industry, they've always been longer and deeper than we've imagined," Mr. Tomnitz warned analysts last week in a conference call.
Indeed, history shows that's always the case with real estate downturns.
And while North Texas may not be suffering from a real estate price bubble, a sharp drop in home sales can pull the rug out from under the best market.
Fitzhugh apartments
One of the country's biggest apartment builders is working on an in-town Dallas deal.
Trammell Crow Residential has contracted to purchase a development site on Fitzhugh Avenue just east of North Central Expressway.
The location is a block from FirstWorthing's new Cityville rental community.
Crow Residential has already put in a zoning request for the apartment community it plans to build there.
Premier Place
A CB Richard Ellis investment fund has completed its purchase of the 20-story Premier Place office building on North Central Expressway in Dallas.
Located next door to the Mockingbird Station shopping center, Premier Place was sold by Cornerstone Real Estate Advisors, an affiliate of Massachusetts Mutual Insurance Co.
The 400,000-square-foot glass office tower was built in 1986.
Andrew Levy and Todd Savage with Holiday Fenoglio Fowler negotiated the sale with Gary Carr with CB Richard Ellis.
posted by Jon Moreau at
9:31 AM
