Published: 02 July 2010 7:34 AM
Dallas custom homebuilder Kelly Clark is finishing work on his latest project in Dallas’ Forest Hills neighborhood.
The $1.45 million house has five bedrooms and six baths and is within walking distance to White Rock Lake
“We’ve been working on that house 18 months,” said Clark, who’s about a month away from finishing. “I shut down construction after the crash and quit building while I waited for the economy to come back.
“No one was going to buy that house in the depths of the downturn,” he said. “I started the project back up six months ago.”
Since then, he’s had more “tire kickers” looking at the 6,127-square-foot home, which replaced a much smaller 1950s home that was knocked down.
Other speculative homes in the popular neighborhood off Garland Road are now sporting sold signs.
And builders across Dallas are once again shopping for lots where they can build pricey, close-in homes.
So-called teardown homebuilding almost shut down last year when the economy and housing market hit the wall.
But as the economy has improved, the rumble of bulldozers knocking down old houses to make way for new construction is starting to be heard again.
“While there are certainly some pockets in the teardown markets that continue to struggle, we have noticed that the East Dallas markets of Lakewood and the M Streets are seeing some increased activity,” said housing analyst Ted Wilson of Residential Strategies Inc.
“Likwise, the more moderate price points in the Park Cities and Preston Hollow – primarily under $2 million – are in better shape than they were a year ago.”
Residential Strategies estimates that in the first quarter, builders started more houses in close-in Dallas neighborhoods than they had since lat 2008.
Construction was up in Lakewood, parts of East Dallas, the Park Cities and North Dallas. At the ame time, the number of finished vacant house in most these areas went down.
“The number of finished, vacant units has declined and the corresponding supply has now dropped to under a five-month supply,” Wilson said. “That is a good sign indicating that excess inventory is getting mopped up.”
Starts of teardown house are still less than a quarter of what they were in the Dallas area three years ago, Residential Strategies’ numbers show. And sales of these houses in the first quarter were almost 70 percent below their peak in mid-2007.
But builders who stuck with the market say it’s turning the corner.
Barclay Builders is finishing a $749,000 spec house in Oak Lawn, and owner Michael Lorra is starting work on two more.
“I just poured a foundation for a house in Lake Highlands and am starting one in Lakewood next week,” Lorra said. “There is a very limited supply of houses in the markets I work in and good demand.”
Lorra bought his Oak Lawn lot on Bradford Drive from another builder who tore down an old house but then dropped the deal.
“It’s getting harder to find lots in this neighborhood because most of the houses are in good shape,” he said. “Over the past seven and eight years, all the junk houses were basically bought up.”
Builder Ron Davis is running into the same thing in the East Dallas neighborhoods where he builds.
“You can hardly find anything in Lakewood for under $300,000,” said Davis, who just closed several home sales.
“We are fixing to start four more house – two are sold and two are speculative,” he said. “Business has been pretty good, mostly coming from referrals and relocation buyers.
“The buyers aren’t out in droves, but the ones that are, are serious buyers.”