dallastophoenix
06 February 2004, 07:18 PM
Timing is right for condos
Apartment developers say
08:41 AM CST on Friday, February 6, 2004
By STEVE BROWN / The Dallas Morning News
Power Properties has renovated almost 600 apartments during the last 10 years. So it might seem odd that the landlord is pitching the idea of homeownership.
But company partner Craig Power – like a lot of other apartment developers – thinks the time is right for condominium conversions.
"We saw a downturn in our rental properties because people were buying," said Mr. Power, who with his brother Braden rehabs aging apartment properties in Old East Dallas and near White Rock Lake.
"We've jumped on condo conversions," he said. "We have three projects going."
With former apartments selling for between $100,000 and $200,000, Power Properties' condo communities near Greenville Avenue offer home ownership at prices close to rental rates.
"Sometimes it makes their costs even lower than renting," Mr. Power said. "We're seeing a strong demand."
With the lowest interest rates in decades, many renters are finding that purchasing a condo or townhouse makes good economic sense.
And that's not just in Dallas.
Condo sales hit a nationwide high in 2003. Almost 900,000 units were sold, an annual increase of 9.5 percent, according to the National Association of Realtors. And those figures don't include many new condo and townhouse units that aren't sold through Realtors.
Condo sales were also up in North Texas last year. Agents sold almost 4,000 units, an increase of about 3 percent from 2002.
And condo prices grew at a faster rate, rising 8 percent. That compares to only a 2 percent increase in the median price of single-family homes sold in the D-FW area last year.
"A lot of condo buyers want to take advantage of the cheap money available," said Dallas real estate agent David Griffin. "If you can pay $700 or $800 or more a month in rent, you can purchase something and keep your payments the same.
"As long as the interest rates remain low, it is very competitive with rental," he said.
Current condo buyers are more confident now than they were in the 1980s, when the condominium market crashed in Dallas and other cities. The late 1980s slump in which many Dallas condos lost more than half their value is considered ancient history.
"It's a different group of consumers now," said real estate agent Bettie Abio. "And what we are seeing now in condos is totally different than what was on the market here before."
Good timing
The boom in condo sales couldn't come at a better time for apartment owners and developers, who are struggling with the highest vacancy rates in more that 10 years.
"Financially, it makes a lot of sense at this point in the market," said Greg Willett, who works for apartment industry analyst M/PF Research, "and it helps the rental market because it takes stock out of the market at a time when we have oversupply."
Mr. Willett said he expects the condo conversion trend to gain steam during the rest of 2004.
"When developers are considering a new building, they can have it pretty much sold out by the time its finished compared with a long leasing time in apartments," he said.
Atlanta's Lucerne Group said it's hoping its Caruth at LincolnPark condo conversion in North Dallas sells out quickly.
Last month, the developer bought the 6-year-old, 388-unit apartment community just south of NorthPark Center shopping mall to sell the units as condos.
"We've just opened to the public nine days ago and we have 26 purchase reservations," said Al Coker, marketing agent for the project. "They are all townhouse-style units with their own garages."
With prices from around $170,000 to $340,000, the condos have attracted a diverse group of buyers.
"We've had a number of empty nesters – people coming from larger homes – and we have people interested in purchasing them as a second home," he said. "I think we will get more young couples as our advertising kicks in."
Higher quality
The quality of apartment units being converted for sale today is much better than in previous cycles, Mr. Coker said.
"Their construction is miles ahead of what it used to be," he said. "The apartment developers recently have had to build units that can compete in quality with homes."
And, as in all real estate projects, location is key to drawing buyers. "We have $600,000 houses right across the street" from Caruth at LincolnPark, Mr. Coker said.
Power Properties is doing its newest condo conversion on Meadow Road west of North Central Expressway in North Dallas.
"We are completely gutting the buildings and doing a Spanish-Italian style," Mr. Power said. "We've already sold 15" of the 140 units.
Power Properties has sold all but one of its condos on University Drive near Greenville and is busy marketing a second project – called Tuscany – on Sandhurst Lane.
"We like to convert garden-style projects which are centered around courtyards," Mr. Power said. "Condos are our main focus right now."
E-mail stevebrown@dallasnews.com
Apartment developers say
08:41 AM CST on Friday, February 6, 2004
By STEVE BROWN / The Dallas Morning News
Power Properties has renovated almost 600 apartments during the last 10 years. So it might seem odd that the landlord is pitching the idea of homeownership.
But company partner Craig Power – like a lot of other apartment developers – thinks the time is right for condominium conversions.
"We saw a downturn in our rental properties because people were buying," said Mr. Power, who with his brother Braden rehabs aging apartment properties in Old East Dallas and near White Rock Lake.
"We've jumped on condo conversions," he said. "We have three projects going."
With former apartments selling for between $100,000 and $200,000, Power Properties' condo communities near Greenville Avenue offer home ownership at prices close to rental rates.
"Sometimes it makes their costs even lower than renting," Mr. Power said. "We're seeing a strong demand."
With the lowest interest rates in decades, many renters are finding that purchasing a condo or townhouse makes good economic sense.
And that's not just in Dallas.
Condo sales hit a nationwide high in 2003. Almost 900,000 units were sold, an annual increase of 9.5 percent, according to the National Association of Realtors. And those figures don't include many new condo and townhouse units that aren't sold through Realtors.
Condo sales were also up in North Texas last year. Agents sold almost 4,000 units, an increase of about 3 percent from 2002.
And condo prices grew at a faster rate, rising 8 percent. That compares to only a 2 percent increase in the median price of single-family homes sold in the D-FW area last year.
"A lot of condo buyers want to take advantage of the cheap money available," said Dallas real estate agent David Griffin. "If you can pay $700 or $800 or more a month in rent, you can purchase something and keep your payments the same.
"As long as the interest rates remain low, it is very competitive with rental," he said.
Current condo buyers are more confident now than they were in the 1980s, when the condominium market crashed in Dallas and other cities. The late 1980s slump in which many Dallas condos lost more than half their value is considered ancient history.
"It's a different group of consumers now," said real estate agent Bettie Abio. "And what we are seeing now in condos is totally different than what was on the market here before."
Good timing
The boom in condo sales couldn't come at a better time for apartment owners and developers, who are struggling with the highest vacancy rates in more that 10 years.
"Financially, it makes a lot of sense at this point in the market," said Greg Willett, who works for apartment industry analyst M/PF Research, "and it helps the rental market because it takes stock out of the market at a time when we have oversupply."
Mr. Willett said he expects the condo conversion trend to gain steam during the rest of 2004.
"When developers are considering a new building, they can have it pretty much sold out by the time its finished compared with a long leasing time in apartments," he said.
Atlanta's Lucerne Group said it's hoping its Caruth at LincolnPark condo conversion in North Dallas sells out quickly.
Last month, the developer bought the 6-year-old, 388-unit apartment community just south of NorthPark Center shopping mall to sell the units as condos.
"We've just opened to the public nine days ago and we have 26 purchase reservations," said Al Coker, marketing agent for the project. "They are all townhouse-style units with their own garages."
With prices from around $170,000 to $340,000, the condos have attracted a diverse group of buyers.
"We've had a number of empty nesters – people coming from larger homes – and we have people interested in purchasing them as a second home," he said. "I think we will get more young couples as our advertising kicks in."
Higher quality
The quality of apartment units being converted for sale today is much better than in previous cycles, Mr. Coker said.
"Their construction is miles ahead of what it used to be," he said. "The apartment developers recently have had to build units that can compete in quality with homes."
And, as in all real estate projects, location is key to drawing buyers. "We have $600,000 houses right across the street" from Caruth at LincolnPark, Mr. Coker said.
Power Properties is doing its newest condo conversion on Meadow Road west of North Central Expressway in North Dallas.
"We are completely gutting the buildings and doing a Spanish-Italian style," Mr. Power said. "We've already sold 15" of the 140 units.
Power Properties has sold all but one of its condos on University Drive near Greenville and is busy marketing a second project – called Tuscany – on Sandhurst Lane.
"We like to convert garden-style projects which are centered around courtyards," Mr. Power said. "Condos are our main focus right now."
E-mail stevebrown@dallasnews.com