Residential April 17, 2009

Real Estate Forum

,555HVLGHQWLDO
<RXU1DWLRQDO9DOXDWLRQ6HUYLFHV3URYLGHU
,555HVLGHQWLDOKDVEHFRPHRQHRIWKHODUJHVW
DSSUDLVDOFRPSDQLHVLQWKHFRXQWU\ SURYLGLQJ
YDOXDWLRQVHUYLFHVLQDOOVWDWHVWKURXJKIUDQFKLVH
DIÀOLDWHUHODWLRQVKLSVDQGLQGHSHQGHQWDSSUDLVDO
ÀUPV,555HVLGHQWLDOZDVFUHDWHGE\,QWHJUD5HDOW\
5HVRXUFHVWKHODUJHVWLQGHSHQGHQWFRPPHUFLDO
YDOXDWLRQRUJDQL]DWLRQLQWKH86WRVHUYHWKHQHHGV
RIWKHUHVLGHQWLDOYDOXDWLRQLQGXVWU\
$GYDQWDJHVWKDW,555HVLGHQWLDORIIHUVLQFOXGH
‡/RFDONQRZOHGJHDQGH[SHUWLVH
‡1DWLRQZLGHFRYHUDJHDFFHVVWROLFHQVHG
DSSUDLVHUV
‡:LGHO\H[SHULHQFHGDQGGHGLFDWHGDSSUDLVDOSDQHO
‡+DQGVRQDSSURDFKHQVXUHVDFFXUDF\DQGIDVWWXUQ
WLPHV
‡'HWDLOHGTXDOLW\FRQWUROSURFHVVSURPRWHV
FRPSOLDQFHDQGULVNPLWLJDWLRQ
‡$GYDQFHGWHFKQRORJ\SURPRWHVUHDOWLPHVWDWXV
XSGDWHV
‡'HGLFDWHGFXVWRPHUVHUYLFHWHDPV
‡2XWVRXUFLQJDSSUDLVDOPDQDJHPHQWDOORZVOHQGHUV
WRIRFXVRQRULJLQDWLQJDQGFORVLQJORDQV
,55&RQQHFWLRQVLVRXUHDV\WRXVHZHEEDVHG
LQWHUIDFHIRUDSSUDLVHUVDQGFOLHQWV IRUIDVWRUGHULQJ
4XDOLW\$VVXUDQFHSHULQGXVWU\JXLGHOLQHVDQG
FOLHQWSUHIHUHQFHV,QWHQVLYH4$UHYLHZSULRUWR
SURGXFWGHOLYHU\LVSHUIRUPHGE\KLJKO\TXDOLÀHGVWDII
UHYLHZHUVXQGHUWKHJXLGDQFHRIRXU&KLHI$SSUDLVHU
2XWVWDQGLQJ$SSUDLVHU3DQHORXUDIÀOLDWHV
DYHUDJH\HDUVRIORFDOH[SHULHQFH7KHEHVW
DSSUDLVHULVVHOHFWHGIRUHDFKDVVLJQPHQWDVVXULQJ
WLPHO\DQGDFFXUDWHYDOXDWLRQV
)DVW7XUQDURXQGXVXDOO\GD\VRUOHVVIRUPRVW
WUDGLWLRQDODSSUDLVDOSURGXFWVZLWKRXWVDFULÀFLQJ
DFFXUDF\RUFRPSURPLVLQJTXDOLW\
9DOXDWLRQ6HUYLFHVLQFOXGHWUDGLWLRQDO SURGXFWVIRU
&RQYHQWLRQDO)+$DQG5(2DVVLJQPHQWV GHVNDQG
ÀHOGUHYLHZ SURGXFWVLQFOXGLQJ UHWURVSHFWLYHIRUHQVLF
DQGFXVWRPGHVLJQHGTXDOLW\FRQWUROSURGXFWV
LQGXVWU\OHDGLQJWKLUGSDUW\$90SURGXFWVZLWKXOWUD
IDVWGHOLYHU\DQGRXU$SSUDLVHU3ULFH2SLQLRQV
,555HVLGHQWLDOLVGHGLFDWHGWRSURYLGLQJKLJK
TXDOLW\DSSUDLVDOVDQGYDOXDWLRQVWRWKH
UHVLGHQWLDOUHDOHVWDWHLQGXVWU\LQFOXGLQJ
‡0RUWJDJH2ULJLQDWLRQ
‡5HÀQDQFLQJ
DQGSURFHVVPDQDJHPHQW ,55&RQQHFWLRQV ‡+RPH(TXLW\/LQHRI&UHGLW+(/2&
IDFLOLWDWHVFRPPXQLFDWLRQEHWZHHQ,555HVLGHQWLDO ‡5(2'HIDXOW9DOXDWLRQ
DQGERWKWKHFOLHQWDQGWKHYHQGRU ‡3RUWIROLR$QDO\VLV'XH'LOLJHQFH
‡5HYHUVH0RUWJDJH$SSUDLVDOV
&RPSOLDQFHWKURXJKXQELDVHGWKLUGSDUW\YDOXDWLRQ ‡5HORFDWLRQ$SSUDLVDOV(5&
VROXWLRQVWKDWDGKHUHWR2&&276863$3)10$ ‡3ULYDWH0RUWJDJH,QVXUDQFH30,5HPRYDO
+9&&DQGFOLHQWVSHFLÀFJXLGHOLQHV ‡5HVLGHQWLDO&RQVXOWLQJ

&RQVLVWHQW3ULFLQJ GHVLJQHGWRDFFRPPRGDWHHDFK
FOLHQWҋV OHQGLQJQHHGVDQGVHUYLFHOHYHOUHTXLUHPHQWV
DOORZLQJOHQGHUVWRSURYLGHDFFXUDWH*)(V

IRR-Residential Valuation Consultants, LLP

4200 South Hulen Street, Suite 525
Fort Worth, TX 76109
(817) 336-8787 Phone
(817) 336-8792 Fax
From the Editor
Inside
Residential real estate has certainly
been on a rocky road during the current
5 Government’s efforts to help residential market
still a ‘wait-and-see’ situation
An interview with Dr. Mark Dotzour, chief economist and research director
at the Real Estate Center at Texas A&M University
economic downturn. While Texas – and
Tarrant County in particular – have been
spared some of the dire consequences 7 Dallas-Fort Worth hasn’t seen lot portfolio fire sales…yet
An interview with Ted Wilson, principal of Residential Strategies Inc.
visited upon the rest of the country,
Buyers and sellers should pay attention to their area stats
we’ve felt plenty of bumps and ruts just
the same.
8 An interview with Martha Williams, Williams Trew Realtors

So, as an organization that provides

the latest news for business owners and
managers in the area, what better time
9 Downtown Fort Worth high-rise scooped up
by California group
StarPoint Commercial Properties LLC attracted to the Fort Worth market
to take an in-depth look at what is hap-
pening now and what the prospects are
for the future. 10 The List
Home Appraisal Companies
We’ve got an array of talent armed
with plenty of data on the current mar-
ket and a glimpse of what comes next.
11 Real Deals
Recent activity on the residential market

Our speakers include:

• John Duca, vice president and senior 13 Pulte Homes, Centex merge to become top U.S. homebuilder
When complete, deal will push D.R. Horton to second place
policy advisor at Federal Reserve Bank of
Dallas, on housing and the economy.
• Ted Wilson, principal of Residential
14 Dallas-Fort Worth housing starts show first-quarter decline
Report shows a nearly 50-percent drop in starts

Strategies Inc., who will examine new

home activity in the area.
• Robert Gleason, director of govern-
14 A plan to stimulate the housing market is missing
Obama administration plans only half-hearted

mental affairs for the Greater Fort Worth

Association of Realtors, who will deci- 15 Foreclosures become new investment alternative
Investors swarm Tarrant County courthouse looking for deals
pher the latest legislative changes.
• Dr. Mark Dotzour, chief economist
and research director at the Real Estate
16 Investors renew apartment interest
Nicole Graffis is rehabilitating a 77-unit, Class C property in central Fort Worth

Center at Texas A&M University, who will

provide a real estate forecast and is 17 Fort Worth residential real estate:
The good, the bad and the not-so-ugly
Guest column from Scott Burdette, managing director
guaranteed to be entertaining as well. of IRR Residential Valuation Consultants
• Arthur Sterbcow, president of Latter
& Blum and CJ Brown Realtors, who will
discuss the real estate market today.
18 Greater Fort Worth Association of Realtors
launches PR campaign
New campaign focuses on local housing industry
This event promises to provide some
valuable information and plenty of news
Publisher Contributor Receptionist
you can put to use as your business goes Banks Dishmon Laurie Barker James Maggie Calhoun
forward, no matter how rocky the road. Editor Photographers Business Manager/
Robert Francis Glen E. Ellman, Jon P. Uzzel Director of Events
Associate Editor Production Shiela West

Robert Francis Michael H. Price Brent Latimer, Clayton Gardner

Fort Worth Business Press. © 2009
Managing Editor Advertising Executives CONTACT US
Editor Crystal Forester Ann Alexander, Andrea Benford 3509 Hulen St., Ste. 201
Reporters Bob Collins, Elizabeth Northern Fort Worth TX 76107
Elizabeth Bassett, Betty Dillard, Aleshia Howe Mary Schlegel, Annie Warren 817-336-8300 • 817-332-3038 (fax)
John-Laurent Tronche, Leslie Wimmer www.bizpress.net

The Residential Real Estate Forum 3

 Government’s efforts to help residential market
still ‘wait and see’ situation
By Aleshia Howe
ahowe@bizpress.net
When it comes to the Texas residen-
tial industry, few people have done
more research and asserted more opin-
ions about the market than Texas A&M
Real Estate Center’s Chief Economist
Dr. Mark Dotzour.
Though Dotzour said he thinks a
turnaround for the states hit hardest by
the housing melt-down could be a
while off, the less-impacted Texas mar-
ket will see new life in 2010 with new
home builds rising and a surge in exist- Dr. Mark Dotzour
ing home sales. Of course by then,
Dotzour said, interest rates will have risen and many buyers may have
missed out on a great opportunity. He recently sat down with a Fort
Worth Business Press reporter to answer some market questions.
Do you think the $8,000 tax credit for first-time buyers
will work to get houses moving?
I think it’s a good idea and people will take advantage of it to a cer-
tain extent. It’s such an improvement over the $7,500 tax-free loan
that the government offered in ’08 … In Texas there is some fear that
home prices will start falling like they have on the East and West
coasts so it is a great incentive, but I’m afraid it won’t turn the market
around on a dime. What we really need to look for in a turn around is
a stabilization in home prices and quite frankly I think part of that will
be when we see prices stabilize in California and Florida because peo-
ple across the country are being psychologically impacted by the big
price drops in those states and they’re taking those psychological deci-
sions and applying them to Texas, which doesn’t make sense, but
that’s what’s going on. So in Texas we needed to see a big drop in
new home construction, and that’s happened in a pretty dramatic way
in the last two years and that’s good.
Do you think the government will roll out a program
for any buyer, first-time or not?
I’ve attended a lot of meetings and seminars around the country
and I don’t sense a lot of urgency in D.C. to encourage people to buy
homes. What I’m seeing is a lot of motivation to avoid foreclosures.
The tendency in D.C. is to reduce the incentives to buy homes in
America rather than increase them. … Why should we help people
buy homes when easy money and too easy credit is what got us into
this in the first place?
…There are two parts to the housing problem: pre- and post-fore-
closure. And the government is focusing on the pre-foreclosure prob-
lem. It’s a frankly easy fix … My solution would be to give investors an
accelerated depreciation schedule, say five to seven years since you
don’t want them flipping the houses. Require a 25 percent down pay-
ment, which eliminates the possibility of foreclosures, and let those
investors pick up all the foreclosed homes on the five- to seven-year
depreciation so they can take a nice big tax break. Then at the end,
waive their capital gains tax. I have no earthly idea why our govern-
ment hasn’t thought of this. It’s very similar to what they did in the
‘81 tax reform act.
What are the chances the federal government will introduce a program
to help subsidize mortgage payments for those at risk of foreclosure?
The chance of that is fairly high. Government right now is just
struggling to find one that works. The problem is it’s not a market
solution. The market solution to that is foreclosure, but for whatever
reason we’ve decided instead not to let the market work so govern-
ment is creating this artificial thing … Government would come in
and give you a second loan on the property, a second mortgage that
Fort Worth Business Press
would let you pay down the first mortgage until it’s low enough that
that payment is about 31 percent of your income and there’s no pay-
ment on the government’s second mortgage.
What do you think interest rates will do in the coming year?
Mortgage rates are the lowest I’ve seen in my 54-year lifetime. Now
is absolutely the best time to refinance. Period. Frankly, if you’re
somebody in your late 50s or early 60s and planning on retiring into a
different home, now is the best time to do it. Mortgage rates are low
and people are willing to make deals on lots and homebuilders are
happy to build homes. If you’re planning on buying a home and living
there at least three years, do it.
The federal government is trying to artificially lower interest rates
by using money to buy mortgage securities so for the time being,
we’re going to see mortgage rates pushed low … So in the next three
to four months is a great opportunity, but once the government runs
out of money to artificially juice the mortgage industry and disen-
gages from the market, rates will return to more like 6 percent and
more.
Are you optimistic about the country turning around
the current economic situation in its residential market?
There’s a 50 percent chance. The best case scenario is that … if we
see positive corporate earnings in the fourth quarter ‘09 compared to
a year earlier. That’s going to be anticipated by a rising stock market
three or four months earlier so if that does happen, there will be a
sustained rally in the U.S. stock market somewhere after Labor Day
and that will start to build consumer confidence, which is really at the
heart of this problem.
The other scenario is that there won’t be positive corporate earn-
ings. Instead there will be a second round of layoffs based on eco-
nomic performance. But the huge government bill just passed was
designed to give money to states so they wouldn’t lay off people and
create a downward spiral. So, the worst case scenario is that the gov-
ernment attempts to artificially stimulate the economy fail and unem-
ployment goes from where it is now to 10 or 15 percent. I’m kind of
hoping the government bailout works.
What do you think the nation’s housing market will look like
when that turnaround comes?
Texas’ housing market is likely to turn around more sharply than the
U.S. will as a whole. Our inventory of new and available homes is low
compared to rest of the country. We’re not going to have near as
much slack to pick up before we need more homes built. So I expect
it to begin, I would assume probably in the spring of 2010. My guess
is we’ll see new home construction and sales in the spring of 2010
will be higher than they were in the spring of 2009.
What will the multifamily market look like after the turnaround?
I think the apartment market is going to be soft in ‘09 and ‘10.
Builders and investors misread the market last year thinking foreclo-
sures would translate into higher demand for apartments. Instead, it
caused households to grow – brother moves in with brother or a 25-
year-old son cancels his apartment lease and moves back home. They
thought people with foreclosed homes would go back into apart-
ments. Instead, those foreclosed homes were bought by investors and
turned into rentals, which are competition for apartments. That’s why
we’re seeing delinquencies in the apartment market and we’ll contin-
ue to see a shakeout in ownership.
What do you consider the markers of a housing market turnaround?
When we see stock prices of the major homebuilders in the country
stop going down, then the turn around is starting. Then we’ll see
homebuilders stopping their concessions and you can open up your
Saturday paper and see homes for sale are offering no major conces-
sions.
The Residential Real Estate Forum 5
 D-FW hasn’t seen a lot of portfolio fire sales ... yet
By Aleshia Howe
ahowe@bizpress.net

Ted Wilson began his career in the 1980s, developing apartments as well
as residential golf course communities. Since 1992, he has been in the analy-
sis business, currently a principal at Residential Strategies Inc., a market
research and consulting firm that tabulates data quarterly for major
Metropolitan areas.

What changes are you seeing in today’s market?

The biggest change of course has been with activity in the market. D-FW
crested with 51,000 homes sold in the second quarter of 2006 and obviously
There is a common
a lot of that is based on demand driven by loose credit and as we saw in
early 2007, the finance market collapsed and mortgage underwriting stan- Ted Wilson thread among all
dards tightened up. As a result, it’s much more difficult to qualify for buyers
so the net absorption rate went down from 51,000 to 19,000, which is a 62 percent drop as far as total Texas markets and
activity. That’s still not as bad as the 80 percent drop nationally.
that is they are
What are builders seeing in the current market?
Beginning in 2008, builders began seeing slower demand and the economy was shifting into recession
mode. There was a noticeable shift in the market in the wake of the collapse of securities. But things are
holding up very
looking a little better now. Builders reported seeing an increase in traffic and sales early this year com-
pared to last year. Of course it’s still slower than for the same period a year ago. We expect to see the
well compared to
market continue to erode this year overall.
other metro areas
How does Dallas-Fort Worth compare to other Texas markets?
There is a common thread among all Texas markets and that is they are holding up very well compared throughout the
to other metro areas throughout the nation. D-FW is holding its own in housing inventory, which is
always a concern at times like these, but has done pretty good at holding down its inventory and offer-
ing price stability. Throughout the state, we didn’t see the big price bubble so we’re not suffering as
nation.
much.
But we are all still feeling a pinch. Austin didn’t really get out the lots to the same degree as D-FW so – Ted Wilson,
there’s a little more barrier to entry in Austin and San Antonio tends to be more of a first-time homebuy- D/FW partner
er market so it’s a little different than here. In Dallas, we have felt of late more of the reduction in layoffs
for Residential Strategies
because we have an awful lot of Fortune 500 companies. The good news for D-FW is that we have bal-
anced housing. The bad news is we delivered enough lots to satisfy 50,000 homes.

What is the lot situation in Dallas-Fort Worth?

We now have a definite surplus of lots. We have a total of 94,000 lots available and we are in the
middle of a downturn where we will probably see a bigger erosion of that supply. It will take years to
work down that overhang of lots and as a result, a lot acquisition and development lenders will be at
risk. While values of lots have held up pretty well, loan renewals are coming up and banks are trying to
figure out how to shuffle through that. The absorption rate has slowed and the take down rate by
builders is not at all what they thought it would be, so we will see.

Are you seeing portfolios of discounted lots becoming available in the Metroplex?
So far I haven’t seen the big fire sales. If there are discounted lots available, they’re coming from the
big builders themselves. Bigger banks are waiting to see how the TARP funds are going to play out and
whether there will be the creation of a bad bank to push off their bad loans. That’s the fundamental
question right now and one that will surely affect the future prices of these surplus lots, is how is the
government going to work with toxic loans and how will that affect banks’ books.

How has the market trouble changed

the face of the residential builder industry?
At the peak of the market in 2006, there were just shy of 60 production builders doing 100 units per
year in D-FW. Since then, of those 60, 22 have left the market, sold their assets or declared Chapter 11
bankruptcy. That represents about 14 percent of the total business here. And we continue to see increas-
ing pressure on builders from lenders with regard to renewing their interim lines of credit. Most have
been committed. Lenders want more securities, more guarantees, and I’m not sure they’re going to get
that. For big builders, it has forced the hand of many of them. Smaller builders not getting their lines of
credit renewed really shuts these guys down. It’s an interesting time. On one hand, we see the govern-
ment out there saying banks need to make loans, extend credit, but the reality is banks are being much
more conservative in their underwriting and those extensions of credit. So, most builders are really down-
sizing and getting in line with the market. Not surprising, in spite of having contracts with developers,
builders are taking lots down as they need them.
All the while, we can hear the drum beat of opportunity funds on the sidelines waiting for that price
drop. But so far, the dam hasn’t broken. If it does break, though, it could cascade and spill over into
property values, making a tough situation a very bad one.

Fort Worth Business Press The Residential Real Estate Forum 7

 Buyers, sellers should pay attention
to their area stats
By Aleshia Howe
ahowe@bizpress.net
With an ever-evolving national residential
market playing in the background, many
Tarrant County potential home buyers and
sellers have failed to take a good look at how
the local market is out-performing – at least
that’s Williams Trew founding member
Martha Williams’ take on it. But after 30
years as a leading Realtor in Fort Worth
(much of that time she has been in the top 1
percent of Realtors nationally), she might be
on to something.
Williams left a marketing career at Texas
American Bank in 1979 and entered the real Martha Williams
estate industry as a Realtor with Brants
Realtors where she was the No. 1 producer
for 11 consecutive years. She went on to become a founding member of
Williams Trew Real Estate Services and said today’s downturn is nothing new
as Realtors have been through it all before. Williams’ No. 1 piece of advice
for those thinking about selling or buying is to keep an eye on what matters
– how the local market is performing.
What changes are you seeing in the real estate market?
The changes in the market are really the consumer concern about the global
economy and the media promoting such gloom and doom. We are so fortu-
nate to live in Texas where the real estate market is somewhat stable com-
8 The Residential Real Estate Forum
pared to other parts of the U.S. I think buyers are just frozen right now not
knowing what to do.
What are buyers’ concerns?
Buyers’ concerns are that prices will come down. There will be many more
houses on the market so ‘why buy now?’ ‘Just wait and see.’ [There is also]
concern over getting loans with minimal down payment and credit con-
cerns.
What are sellers’ concerns?
Sellers’ concerns are that prices will go down; That there are a lot of
houses coming on the market in the neighborhoods. They have to price
their house realistically if it is going to sell in this market. [The] number of
buyers are less than last year [and the] market time is more.
How are federal efforts affecting your day-to-day? Are the stimulus package
or the $8,000 tax credit really helping?
Federal efforts really have not had much affect. It’s great for first-time home
buyers.
How do you think the Realtor industry will look in the coming years?
I think the [real estate] industry will be the same as over history. In tough
times, a lot of people get out of the business needing steady income. Eighty
percent of the sales are made by 20 percent of the agents. Quality will rise
to the top and the experienced, true professional agents who have been
through this before will thrive. They will have to work twice as hard, but
they will survive and thrive.
April 17, 2009
 Downtown Fort Worth high-rise
scooped up by California group
By Aleshia Howe ground space into leasable base-
ahowe@bizpress.net ment-level retail.
“There is some space we

Photo courtesy of The Hoyt Organization Inc.

Citing an attractive Fort Worth market, a Beverly Hills, Calif.-based real believe we can get creative with
estate group has picked up downtown Fort Worth’s The Tower building and and generate some income off
the nearby Tower Annex building for an undisclosed amount. of,” Farahnik said.
StarPoint Commercial Properties LLC, which opened a Dallas acquisition The Tower Annex building
office in 2007 anticipating interest in the Dallas-Fort Worth market, pur- boasts some street-level retail
chased The Tower Complex, which consists of the two buildings along with space as well as 70,000 square
an adjacent 253-car parking lot and about 70,000 square feet on two feet of office space currently
underground levels between the two buildings. leased to Chesapeake Energy for
“It’s a tight commercial submarket and a very attractive one and we were its appraisal department.
happy to acquire such a property,” said StarPoint Principal Evan Farahnik. StarPoint commissioned UCR
The first two floors of The Tower, at 500 Throckmorton St. in Downtown, Urban to handle leasing for the The Tower is a 37-story building in
boast about 60,000 square feet of office and retail space, which is 98 per- project. Available space will con- downtown Fort Worth.
cent leased. The remaining 35 floors hold condominiums that are 98 percent sist of 2,000 square feet of retail
sold out. space that has never been leased
Current Tower tenants on the building’s ground floor include The Vault, as well as 2,400 square feet of space that housed The Tower’s sales office
Cantina Laredo, Qdoba and Potbelly Sandwich Works. Future tenants and will be converted into retail space.
include a Capital One branch location, Fat Daddy’s Sports and Spirits Café, Farahnik said his company’s acquisition team continues to scour North
which is currently in its build-out phase with an anticipated May opening Texas for investment opportunities and The Tower transaction likely will be
date, and Vice, a nightclub set to open on the south side of the building at the first of many in the area.
street-level. The structure’s second floor mostly consists of office space. “The market is still so disjointed that we don’t have any goal numbers in
The Tower, formerly known as the Bank One Tower, was renovated in mind, but we have equity for good deals in good growth areas as long as
2003 and consists of 294 luxury condo units. Two condominium associations the submarket is good,” he said.
own the remaining portions of the building as well as most of the parking StarPoint Commercial Properties represented itself in the transaction. The
garage. seller, TLC Green Property Associates of Chicago was represented by Tom
Farahnik said his company’s interest in The Tower was based on three fac- Salanty, executive director in the Dallas office of Cushman & Wakefield of
tors: the sub-market, the tenancy and the potential conversion of the under- Texas Inc.

Fort Worth Business Press The Residential Real Estate Forum 9

Area Residential Appraisal Companies
Ranked by Tarrant County residential appraisals in 2008
Company
Address 2008 Appraisals by Value
City Postal Code Tarrant County Residential Total Local Total Local Range:
Phone Appraisals in 2008 Appraisers Full-time Staff Over $500,000
Fax 2008 Appraisal Percentages: Local Certified Designations on $300,000-$500,000 Top Local Executive
Rank Web site Residential/Commercial/Other Appraisers Staff $100,000-$300,000 Year Established Locally
Appraisal Source Inc.
7080 Camp Bowie Blvd. 0
Fort Worth 76116 1,400 8 10 Robert A. Tyson
1 817-763-8000 86/12/2 7 MAI, SRA and SRPA 0
0 1986
817-763-8017
asidfw.com
IRR-Residential Valuation
Consultants LLP
4200 S. Hulen St., Ste. 525 1,300 8 1 DND Scott L. Burdette
2 Fort Worth 76109
817-336-8787 100/0/0 6 SRA DND
DND 1989
817-336-8792
thevaluepros.com
York & York Inc.
2825 Exchange Blvd., Ste. 103 221
Southlake 76092 896 10 13 Greg York
3 817-329-9211 100/0/0 10 SRA 157
630 1992
817-329-8291
yorkandyork.com
BBAA LLC
9800 Verna Trail North 590
Fort Worth 76108 892 3 6 Ben B. Boothe
4 817-738-9595 10/90/0 1 DND 130
200 1989
817-738-7773
benboothe.com
1st Appraisal Choice
700 Six Flags Drive DND
Arlington 76011 500 3 2 Michael Shelton
5 817-649-8055 80/0/20 1 RAA and GAA DND
DND 1997
972-437-2208
1stappraisal.com
Jane R. Brausam Appraisal
Services
4721 Boulder Run 150
500 1 2 Jane R. Brausam
5 Fort Worth 76109
817-738-7714
100/0/0 1 SRPA 150
200
1994
817-738-3615
DND
Century Appraisal Group Inc.
P.O. Box 486 40
Euless 76039 400 2 2 Cynthia Payne
7 817-235-0655 98/0/2 2 DND 240
200 2001
817-796-2744
centuryappraisalgroup.com
Gregg White Co.
8629 Lake Country Drive 1 50
Fort Worth 76179 400 1 IFA, CRA and Gregg White
7 817-237-7571 100/0/0 1 candidate member 200
150 1980
817-237-0775 for NAIFA
texasrealestateappraiser.com
Wimbish Appraisal Service
5504 Brentwood Stair Road 32
Fort Worth 76112 300 3 2 Vincent Wimbish
9 817-446-7715 80/10/10 3 RA and SRA 67
135 1992
817-446-7744
DND
Accurate Appraisals
8161 Vine Wood Drive 12
North Richland Hills 76180 144 2 2 Charles S. German
10 817-577-5795 99/1/0 1 DND 34
92 2005
817-887-1353
accurateappraisalsgroup.com
Stephen East & Associates
2904 Steeplechase Trail
Arlington 76016 144 1 1 3 Stephen East
10 817-451-2049 100/0/0 1 SRA 45
96 1980
817-451-2426
N/A
J. R. Kimball Inc.
201 Main St., Ste. 1260 DND
Fort Worth 76102 20 3 3 J. R. Kimball
12 817-332-7872 10/75/15 3 MAI DND
DND 1968
817-338-1050
N/A
Weaver & Associates
P.O. Box 1083 DND
Lancaster 75146 15 3 DND Jim Weaver
13 972-218-6200 DND/DND/DND 2 MSA DND
DND 1989
972-227-2508
appraisaldfw.com
Republic Appraisals of Texas LP
4760 Preston Road, Ste. 244
PMB 208 5 5 4 DND Matt Boring
14 Frisco 75034
214-618-5474 100/0/0 4 N/A DND
DND 2004
214-618-5475
republicappraisals.com
Edwards Appraisal Group
4021 Alava Drive 20
Fort Worth 76133 3 2 2 Michael Edwards
15 817-691-4827 95/0/5 2 None
110
205 2003
817-294-0212
edwardsappraisalgroup.com

10 The Residential Real Estate Forum April 17, 2009

Area Residential Appraisal Companies continued
Ranked by Tarrant County residential appraisals in 2008
Company
Address 2008 Appraisals by Value
City Postal Code Tarrant County Residential Total Local Total Local Range:
Phone Appraisals in 2008 Appraisers Full-time Staff Over $500,000
Fax 2008 Appraisal Percentages: Local Certified Designations on $300,000-$500,000 Top Local Executive
Rank Web site Residential/Commercial/Other Appraisers Staff $100,000-$300,000 Year Established Locally
Appraisal Services Inc.
777 Main St., Ste. 1990 DND
Fort Worth 76102 2 5 5 Brian K. Huffman
16 817-335-5757 30/70/0 DND MAI and SRA DND
DND 1969
817-335-8422
appraisalservicesdfw.com
Young Appraisal Company Inc.
9141 High Oaks Drive DND
North Richland Hills 76180 2 2 DND W. Paul Young
16 817-428-9776 99/0/1 2 DND DND
DND 1995
817-428-9777
youngappraisalcompany.com
Brady Condike Inc.
415 S. Morgan St. 5 DND
Granbury 76048 DND 3 Ed Archer
NR 877-283-0874 DND/DND/DND 2 BS, MBA, SRA and
MAI
DND
DND 2001
817-573-9974
bradycondike.com
Judy Ward & Associates
2423 E Renfro St. DND
Burleson 76028 DND 2 1 Judy Ward
NR 817-447-7611 DND/DND/DND 2 IFA DND
DND 1986
817-447-4440
judywardrealestateservices.com
H. Fielding Chandler & Associates
6300 Ridglea Place, Ste. 607 DND
Fort Worth 76116 DND 1 1 H. Fielding Chandler
NR 817-763-0001 100/0/0 1 DND DND
DND 2002
817-763-0075
hfchandler.com
Texas Appraisal Inc.
P.O. Box 797585 1
Dallas 75379 DND 1 3 Craig Cornwall
NR 972-985-3000 98/0/2 1 MSA 1
14 1989
972-985-3005
texasappraisal.net
NOTES: DND - Did not disclose
Source: participating companies
To be included on this list, contact listresearch@bizpress.net.
RESEARCHER: Mary Kennan

Foreclosed Arlington apartments sold in all-cash deal

A local private investor paid $1.2
million in cash for Arlington Square
Apartments, a property that went
real
back to lender after a defaulted
CMBS loan last year.
deals
A Carrollton investor, who was
Aleshia Howe
not identified, purchased the 70-unit
property from a holding company in Columbus, Ohio.
Constructed in 1965, Arlington Square Apartments is located at 1500 W.
Lovers Lane in Arlington just southwest of the University of Texas at
Arlington campus.
“When the holding company foreclosed and took the property back, it
had a lot of issues that you typically see in defaulted assets in today’s market
[like] high vacancy, low collections, deferred maintenance, etc.,” said Mart
Martindale, senior director of capital markets with Cushman & Wakefield of
Texas Inc., who represented the seller in the transaction.
Martindale said the seller put about $150,000 of capital improvements
into the asset to cure some general deferred maintenance and safety issues,
in addition to raising occupancy to about 80 percent.
Martindale said the buyer has plans to “continue to renovate the asset
and convert it to an ‘All Bills Paid’ format.”
The buyer was represented by Doug Perry and Brad Sumrok of Lifestyles
Realty.
Greenhill Apartments sold
A Southern California investor purchased the 50-unit Greenhill
Apartments from a private investment group for an undisclosed amount.
The Class-C complex at 403 Small Hill Rd. is 93 percent occupied. Units
consist of a mix of studios and one-bedroom apartments ranging between
430 and 850 sf, with rents between $435 and $595.
Keller Williams represented the buyer.
Partnership purchases Regal Brook Apartments
Daryl Windland, lead partner for Wind Properties RB LLC purchased a
160-unit apartment complex in foreclosure for $3.3 million.
Wind Properties purchased Regal Brook Apartments, located at 8303
Skillman in Dallas, with plans to complete renovations to the property. Wind
Enterprises LLC will manage Regal Brook.
Cheryl Pogue Windland, with KMM Realty Group, brokered the transac-
tion on behalf of Wind Properties.
Stayton project team announced
After months of planning, Senior Quality Lifestyles Corp. announced the
team for its pending upscale retirement development, The Stayton at
Museum Way.
Set for construction just off of West Seventh Street in Fort Worth’s
Cultural District, The Stayton will feature 188 independent living residences
within three 11-story towers.
Greystone Communities, based in Irving, was named as developer of The
Stayton, which was designed by the Dallas office of Baltimore, Md.-based
CSD Architects.
Landscaping architecture firm Talley Associates, based in Dallas, will han-
dle the project’s outdoor development and interior design firm Studio Six 5,
based in Austin, will use green design techniques on the project’s interior.
Dallas-based Andres Construction Services LLC, a LEED Accredited
Professional, will serve as general contractor for The Stayton. Andres
Construction also is the general contractor for the So7 project currently
under development on West Seventh Street neighboring the future Stayton
site.
The Stayton project team also includes civil engineer Teague Nall and
Perkins, structural engineer LA Feuss Partners Inc., mechanical, electrical and
plumbing engineer Reed Wells Benson & Co., lighting designer Scott Oldner
Lighting Design, JEM Associates for food services, Texas Department of
Aging and Disability Services for code officiating and spec writer INTROSPEC.

Fort Worth Business Press The Residential Real Estate Forum 11

 Pulte Homes, Centex merge
to become top homebuilder
By Aleshia Howe “We believe this is the right combination at the
ahowe@bizpress.net right time in the business cycle. By acting decisively
now, we’re creating unrivaled firepower to capitalize
Big changes continue in the nation’s home market on the opportunities in homebuilding that are now
as the country’s No. 2 builder Pulte Homes Inc. and becoming visible on the horizon,” Centex Chairman
No. 3 Dallas-based Centex Corp. have announced and CEO Timothy Eller said in a statement.
they will combine to form
the largest homebuilding
company in the nation,
effectively passing up Fort
Worth’s D.R. Horton Inc.,
which has held the No. 1
post for several years.
Pulte announced April
8 that it will acquire
Centex Corp. in a $1.3
billion stock-for-stock
deal. The transaction,
which also includes $1.8
billion of debt, will give
the combined business a
liquidity position of more
than $3.4 billion in cash
as of March 31.
The companies’ merger
comes at a time when
homebuilders are strug-
gling to cope with slow-
ing national home sales,
tight credit and wavering
consumer confidence.
Pulte President and
CEO Richard J. Dugas Jr.
said the acquisition “puts
us in an excellent position
to navigate through the
current housing down-
turn.”
The combined compa-
ny will operate under the
Pulte name and will be
based in Bloomfield Hills,

Graph courtesy of Centex Corp.

Mich., though its leaders
contend the company
will still have a strong
presence in Dallas.
The combined compa-
ny will have a top three
position among home-
builders in 25 of the top 50 markets in the U.S. The Eller will become Pulte’s vice chairman and also will
merger makes the new Pulte entity the No. 1 home- work as a consultant for two years following the
builder in San Antonio, and introduces the Pulte acquisition’s completion.
brand to the Fort Worth market. Aside from Eller, Pulte’s board will be expanded
Upon completion of the transaction, Dugas will and will include three other Centex board members.
assume the positions of chairman, president and CEO It also will include eight members of Pulte’s current
of Pulte Inc. board, including founder and Chairman William J.
Per the deal, Pulte stockholders will own about 68 Pulte.
percent of the combined business and Centex share- The acquisition, which was unanimously approved
holders will own the remaining 32 percent. by both homebuilders’ boards, is expected to close in
The new company will have a presence in 59 mar- the third quarter. It is expected to qualify as a tax-
kets throughout the country and gives Pulte access to free reorganization.
Centex’s land holdings throughout Texas as well as in
South Carolina.

Fort Worth Business Press The Residential Real Estate Forum 13

 Dallas-Fort Worth housing starts show first-quarter decline
By Aleshia Howe
ahowe@bizpress.net
Dallas-Fort Worth area builders continued to pare starts in the first quarter
of 2009 as the latest report compiled by Residential Strategies Inc. shows a
nearly 50 percent drop in starts for the beginning of 2009 compared to the
same quarter a year ago.
In the first quarter of 2009, builders commenced construction on 2,394
new homes, compared to 4,943 units in the first quarter of 2008.
Ted Wilson, D-FW partner for Residential Strategies, said builders pulled
back on home starts after a “difficult period for the new home industry” in
the fourth quarter of 2008.
“… The convergence of bad news regarding the credit and equity mar-
kets, in addition to the revelation that the U.S. economy was in a deep
recession, caused many new home buyers to cancel orders,” Wilson said in
the company report.
As a result, builders entered 2009 with higher than desired amounts of
finished inventory, Wilson said.
The good news for the local market, Wilson said, is builders were able to
work through much of the 2008 home inventory during the first quarter of
2009, and anecdotal reports from builders regarding traffic and sales “have
been very good for the past four weeks,” Wilson said. “With these recently
reported sales I would expect to see a resurgence of ‘sticks in the air’ in
April.”
Closings outpaced starts again for the quarter with 4,096 units closed for
the quarter. The annual rate of closings, including those from the second
A plan to stimulate the housing market is missing
How to rescue housing? The Obama administration
doesn't have a plan – or, more accurately, has only half a
plan. It presupposes that preventing or minimizing home
foreclosures is a formula for revival.
It isn’t.
Almost everyone agrees that a housing recovery is
essential for a broader economic upswing, in part
because housing’s collapse brought on the recession.
Mortgage delinquencies triggered the financial crisis.
Tumbling home prices (down 26 percent from their Robert J. Samuelson
peak) ravaged consumer confidence, borrowing and Guest column
spending. Since late 2007, housing-related jobs – car-
penters, realtors, appraisers – have dropped by 1 million, a quarter of all lost
jobs.
Housing’s distress is too much supply chasing too little demand. Huge
inventories of unsold homes have depressed prices and construction. Given
that prices rose too high in the “bubble” – homes were affordable only
because credit was dispensed so recklessly – much of this painful adjustment
was unavoidable. But that process should be mostly complete.
Here’s a little-known fact: Housing may be more affordable now than at
any recent time, thanks to lower prices and falling mortgage rates (now
about 5 percent). The National Association of Realtors has an “affordability
index” that estimates the family income needed to buy a median-priced
house, assuming a 20 percent down payment and monthly mortgage pay-
ments equal to 25 percent of income. Affordability is now the highest since
the index's start in 1970.
Unfortunately, demand hasn’t followed affordability. In January, sales of
new and existing homes continued prolonged declines, dropping 10.2 per-
cent and 5.3 percent, respectively, from December. There’s a buyers’ strike.
Why? Shouldn’t lower prices spur demand?
Well, yes. There are many theories as to why they haven’t. Perhaps
prospective buyers can’t get loans. Or people are so gloomy that they're
afraid to buy. But the most important explanation is probably deflationary
psychology. If yesterday’s $250,000 house is now $200,000, it may be
$175,000 by June. Waiting is better.
Unless this deflationary psychology is broken, it becomes self-fulfilling.
The more buyers wait, the more prices fall; and the more prices fall, the
more buyers wait. The Obama administration essentially ignores this prob-
lem, though it can be addressed.
The simplest way is to bribe prospective buyers not to wait. For example:
Give them a 10 percent tax credit, up to $15,000, on the purchase price of
14 The Residential Real Estate Forum
The fact that D-FW has a relatively balanced new
and existing home inventory has served the area
well during the downturn. D-FW does not have the
supply and demand imbalances that have been dis-
astrous to home prices in many of the ‘bubble mar-
kets’ around the country.
– Ted Wilson,
D-FW partner for Residential Strategies
quarter 2008 through the first quarter of 2009, stands at 22,606 units.
Wilson said the statistics show builders and lenders alike are “proceeding
with caution and discipline” currently with very little speculative building.
Despite the declining start activity, D-FW home prices have held up well
compared to other parts of the country. For the first quarter of 2009, medi-
an new home price stands at $207,906 in Dallas-Fort Worth, up from
$207,755 in the fourth quarter of 2008 and $204,879 in the first quarter of
2008.
“The fact that D-FW has a relatively balanced new and existing home
inventory has served the area well during the downturn” Wilson said. “D-
FW does not have the supply and demand imbalances that have been disas-
trous to home prices in many of the ‘bubble markets’ around the country.”
a new home. Anyone who bought a $150,000 home would get a $15,000
tax break. The credit would expire in a year. Waiting would be costly. Buyers
would delay only if they thought home prices would drop as much or more.
Precisely this proposal comes from the National Association of Home
Builders. Normally, it would be an atrocious idea, because it would reward
people who would buy anyway and would be skewed toward wealthier
buyers. But now it’s worth trying.
Somehow, we need to cut bloated inventories (13 months of supply for
unsold new homes), curb falling prices and stimulate new construction. The
hope is that once buying improves, it would feed on itself. People would
join from the sidelines. The NAHB says its plan would create 250,000 jobs
and cost $40 billion – big money but tiny compared with the hundreds of
billions lavished on recovery programs. The Senate included the plan in its
stimulus, but it was later dropped.
It wasn’t an Obama priority. Some administration proposals, focused on
foreclosures, are desirable. It’s sensible to allow Fannie Mae and Freddie Mac
to refinance older mortgages, at lower interest rates, even if homeowners’
equity has dropped below today’s requirement of 20 percent. This would
reduce defaults and increase borrowers' spending power.
Other ideas seem more dubious. For $75 billion, another proposal would
subsidize homeowners so their monthly mortgage payments dropped to 31
percent of their income. Because that’s still high, many of these homeown-
ers would probably default anyway. Even worse is the “cramdown” propos-
al, backed by the administration. This would allow bankruptcy judges to cut
mortgage payments. If passed, this would probably raise future mortgage
costs, because lenders would have less access to collateral.
In any case, minimizing foreclosures alone won’t revive housing. If the
recession and unemployment worsen, foreclosures will increase, because
people without jobs and income can’t meet their monthly payments.
The best way to limit foreclosures is to achieve a housing and economic
recovery by stimulating buying. It's true that the recent “stimulus” plan
included a tax credit of up to $8,000, but that was restricted to first-time
buyers and made “refundable,” meaning people could receive the money
even if they didn’t owe taxes. These are younger and poorer buyers – the
weak credit risks of today’s crisis. They won't rescue housing.
All this is telling. The administration and Congress, though pledging to
restore economic growth, care more about protecting foreclosure “victims”
and promoting homeownership among the young and poor. Politics trumps
economics.
Samuelson’s column is distributed by the Washington Post Writers Group.
April 17, 2009
 What a deal
Foreclosures offer new investor alternative
By Aleshia Howe
ahowe@bizpress.net

William Blackmon went to the Jan. 6 foreclosure and

delinquent tax auction at the steps of the Tarrant
County Courthouse with his wallet in hand and his eye
on a three-bedroom house in Fort Worth’s Near
Southside appraised at $112,000. After a short bout of
bidding, Blackmon walked away as the proud owner of
the home for a whopping $37,000.
“I wanted to buy it so I can flip it, sell it to an
investor wholesale,” Blackmon said, smiling. “You can’t
get a much better deal than that.”
As the number of foreclosed homes continues to
mount, monthly foreclosure and delinquent tax auc-
tions at the steps of county courthouses are becoming
more than a place for seasoned real estate investors –
they’re quickly becoming an alternative MLS for first-
time investors like Blackmon and first-time homebuyers
looking for a good deal.
“What we’re seeing in many of the counties we
cover is more and more individuals are starting to look
at the foreclosures as a good way of purchasing,” said
George Roddy Sr., president of Foreclosure Listing

Photo by Jon P. Uzzel

Service Inc., a foreclosure listing and tracking service.
“Whether it’s for investment for income or to live in, if
you can buy a house for 20 percent or more under
market value, then you got a great deal.”
The auctions, on the first Tuesday of every month in
counties across the state and nation, typically feature Investors swarm the
two kinds of properties: foreclosed properties sold by
the lender and delinquent tax properties sold by the
county constable’s office to remediate property taxes owed to the county.
Jason and Diana Dyer attended the January auction for research, with
plans to purchase a home with delinquent taxes at next month’s auction.
The couple, who live in a local apartment complex, said they are anxious to
buy their first home, but want to make sure they are also getting “a good
deal.”
“We wanted to buy a foreclosed home, but then a woman at work told
me about the auctions,” said Jason Dyer. “We plan on using our savings to
buy it.”
In both auctions, purchasers must pay cash or with a cashier’s check at
the auction.
Trustees for the foreclosed properties, assigned on a case-by-case basis by
the lender or an attorney hired by the lender, must post the properties for
auction 21 days prior to the monthly sales.
That’s where a firm like Roddy’s comes in.
Foreclosure Listing Service, like a few other local businesses, sells a list of
properties marked for foreclosure and tracks their outcome at auction.
At the Tarrant County foreclosure auction in December 2008, a total of
1,423 properties were listed for sale. Roddy said the average selling price for
properties listed at a recent auction in December, 2008, ranged from 69
cents to 73 cents for every dollar of the property’s appraised value, with
Collin County averaging 72 cents to 75 cents on the dollar and Dallas
County properties netting between 67 and 68 cents on the dollar.
The bidders for the properties, however, aren’t just third-party buyers.
To begin the bidding process, trustees announce a starting bid for each
property submitted by that property’s lender. Roddy said the bid historically
has been based on the outstanding mortgage plus any legal fees associated
with the property, but as foreclosed properties continue to accumulate,
Roddy said lenders have started to instruct trustees to open bidding 15 to
20 percent lower than the original loan amount – and sometimes lower – so
they can use the auction as a tool to sell the property versus an avenue to
close the foreclosure process.
Even so, most properties at auction are repossessed by the lender, Roddy
said, because if no one bids against the lender’s starting bid, properties
Tarrant County Courthouse each month to buy auctioned properties.
insured by companies such as Freddie Mac and Fannie Mae can be sold by
the lender to the backing companies so lenders can re-cooperate their
investment.
But the system still has its flaws.
Mike Hana, a real estate investor, attends auctions in several counties, but
said he had trouble finding the trustees for certain properties at the Tarrant
County foreclosure auction. Because of this, he wound up walking away
with no new properties.
“At the Fort Worth auction, you are on your own,” Hana said. “There are
10 to 15 trustees there and you don’t know who is a trustee and who is
not. It’s unfortunate because it doesn’t give you a good chance to get the
property you want.”
Jim Gaines, research economist at the Texas A&M Real Estate Center,
agreed, adding that foreclosure sales throughout Texas and other states will
have to become more regulated to handle the onslaught of foreclosed
homes predicted to hit the auction block this year.
“The sales now are very chaotic and difficult to navigate,” Gaines said.
“And the trustees need only to announce their property once during the
auction and if no one hears them, they’ve done their job and can leave and
the bank can buy the property for cheap.”
Homes listed to be auctioned at the April 7 event included 1,700 Tarrant
County homes, falling just 75 homes short of the record for most homes
filed for foreclosure auction in a single month, which was set in February
2008.
Home postings filed for the Tarrant County April auction were up 32 per-
cent compared to the April 2008 filings of 1,288.
Roddy said the increase is just in time as the auctions gain attention as an
alternate place to buy a home.
“People are getting smart,” he said. “Why buy a new house or one up
for sale when you can get a similar one that’s discounted?”
The auction certainly has made a believer out of Blackmon, who said he
plans to return to future foreclosure auctions “as long as I’m making
money.”

Fort Worth Business Press The Residential Real Estate Forum 15


Nicole Graffis decided to take a chance on an investment in a 77-unit, Class C property in central Fort Worth, at 2901 Travis Ave.
Investors renew apartment interest
By Aleshia Howe
ahowe@bizpress.net
After watching her investment money flounder in the stock market,
Arlington resident Nicole Graffis was a step away from viewing her mattress
as her best investment option.
But after the stock market crash and the real estate market tumbled,
Graffis decided to take a chance on the multi-family market – and she
hasn’t looked back.
Graffis bought a 77-unit, Class C property in central Fort Worth, at 2901
Travis Ave. and quickly began a $275,000 rehabilitation, changing the prop-
erty’s name to Travis Gardens.
As the managing partner of a group of 16 investors for the property,
Graffis paid cash for the asset after running into financing issues and plans
to rehabilitate the complex, raise rent $25 per unit to bump up its cash-
flowing potential and execute an exit strategy so she can move on to her
next property.
“In today’s market, it seemed like a great idea and so far, it’s coming
along nicely,” said Graffis, who picked up the property in foreclosure for
$1.35 million – more than half a million less than its appraised value. “I
wanted a Class C property that I could put some renovation money into and
see a return – and I found just what I was looking for.”
And Graffis isn’t the only green investor eyeing the multi-family market.
After selling a start-up company in 2003, Graffis was looking for a way to
grow her money when she heard of a program called Lifestyles Unlimited, a
real estate education and mentoring group with a D-FW office.
Brad Sumrok, lead consultant and multi-family broker in the D-FW office
of Lifestyles Unlimited, said the Houston-based organization aims to educate
16 The Residential Real Estate Forum
Photo by Jon P. uzzel
its members about real estate – both single- and multi-family – as well as
help locate properties, broker deals and facilitate financing through its net-
work of investors.
Though Lifestyles Unlimited was founded in 1990 in Houston, with the D-
FW office opening in 2006, Sumrok said business has flourished in the last
three months as he has seen a 25 percent increase in members.
Sumrok said a novice typically buys property when the market is up,
meaning they are paying more for the property, when they should buy when
the market is down so they can get a better deal.
“Is it better to buy clothes before or after Christmas? After Christmas, of
course, because it’s going to be on sale,” Sumrok said. “It’s the same thing
here. Right now real estate is on sale and … when we find a good apart-
ment deal put up at the right price, it’s picked up quick. Maybe it will be on
more of a sale if we wait a bit longer, but no matter what, it’s on sale right
now and our investors are ready and willing to deal.”
Sumrok said he typically advises investors to look for 20- to 500-unit Class
C properties built in the 1970s and ’80s that can be rehabilitated.
This month, Sumrok said he has several investors poised to close on multi-
family properties, including a 388-unit property in Fort Worth and a 70-unit
property in Arlington. And investors aren’t the only ones calling, Sumrok
said.
“All the brokers in town are calling me now because they know we’re
buying,” he said. “For the last few years, California Investors bought these
properties sight-unseen, and were absentee owners. Now a lot of these
properties are in foreclosure and we can pick them up and dust them off
and bring them back to life.”
Drew Kile, regional manager of the Fort Worth office of Marcus &
Millichap Real Estate Investment Services, said his firm has seen the gamut
April 17, 2009
 of investors coming back to market, looking for multi-family proper-
ties.
According to two recent studies released by Marcus & Millichap,
multi-family property sales were inconsistent in 2008 as the D-FW
Northeast Submarket, which includes Tarrant County property north
of Texas State Highway 10 and east of Interstate 35, saw a 66 per-
cent drop in sales during 2008 compared to 2007 due to “limited
access to capital and elevated investor caution regarding older
assets,” the report stated.
In a ‘flight-to-quality’ strategy, the Marcus & Millichap report stat-
ed buyers targeted newer, stabilized assets averaging less than a
decade in age, which resulted in median sales price more than dou-
bling for the category to $81,500 per unit in the last year.
In Hurst/Euless/Bedford Submarket, however, multi-family asset
sales volume nearly doubled in 2008 thanks to the area’s fifth con-
secutive year of no new deliveries, which allowed the area to record
the lowest apartment vacancy rate in the Metroplex, according to
the Marcus & Millichap report.
Still, occupancy levels are expected to contract modestly for the
area, the report stated, due to job loss and a growing number of
Class A renters may transition into more affordable, lower-tier prop-
erties this year, which will push top-tier vacancy up and keep rents
flat and concessions high.
“While we’re bullish on the apartment market, you’re going to
have a couple of years here with rents ticking down a bit and occu-
pation going down a bit,” Kile said. “Even though the market is in
pretty good shape, we’re still seeing people double up in apart-
ments or people moving back home with parents. There are going
to be some challenges in the short term, with cap rates up, which
means values are down, but locally the demand is going to be there
mid- and long-term, which makes this a great time to invest, I
guess.”
Kile said apartment fundamentals typically perform well com-
pared to other property types in a downturn.
“Strong population growth in this area through natural causes
like immigration will contribute to multi-family success, and this
market is set up nicely because apartment development has been
fairly well constrained,” Kile said.
Despite the potential for opportunistic investing, Kile warned
there could be danger for first-time investors jumping into the
multi-family market without doing due diligence.
“The main people we’re seeing get hurt right now are the people
who were inexperienced and made bad decisions in the last few
years,” Kile said. “A lot of people thought they could get into real
estate because it was easy and they bought properties they never
should have … They just need to make sure they’re getting good
advice and know what they’re getting into.”

Fort Worth residential real estate:

The good, the bad and the not-so-ugly
Photo by Jon P. uzzel

The Good
The value of real estate is strongly influenced by its
surroundings. That is why I believe Tarrant County is one
of the best places in the country to own residential real
estate. We are fortunate to have a vibrant downtown
area, world-class museums, historic districts, entertain-
ment venues, as well as rivers, lakes and sprawling park
areas that are second to none.
Real estate values here in Fort Worth and Tarrant
County have had their ups and downs, but through it all Scott Burdette
we have remained as one of the strongest residential Guest column
real estate markets in the entire country. Each month,
Standard and Poor’s releases its Case-Shiller Home Price index, which tracks
home prices in 20 of the largest metropolitan areas in the country.
According to the most recent data, property values in Dallas and Fort Worth
have declined less than 5 percent, which is the least of any of the 20 mar-
kets tracked. This is due to our continued ability to attract a strong and
diversified work force, which has resulted in Dallas and Fort Worth being
one of the fastest growing areas during the past 20 years. It is now the
fourth largest metropolitan area in the country. Tarrant County’s rich historic
past coupled with its pioneering visionaries has laid the foundation that is
making Tarrant County the envy of the country.
The Bad
While home ownership is a worthwhile goal and privilege, it is an expen-
sive privilege that many have found they cannot afford. The elimination of
subprime mortgages as well as tightening lending standards and mortgage
reforms, have resulted in fewer “qualified” buyers being eligible to be buy a
home. This also resulted in record numbers of foreclosures nationally as well
as locally. Although Tarrant County has not seen a significant drop off in
home values, foreclosures are prevalent in our market.
According to information from the North Texas Real Estate Information
Service, the number of single-family home sales in Tarrant County has
decreased 17 percent from a year ago. Furthermore, more than 26 percent
of the sales that did occur were foreclosures sales and this does not include
“short sales,” which are accounted for separately. Short sales are sales of
homes where the sellers owe more on their home than it is worth, but the
bank is allowing the sellers some additional time to sell their home, albeit at
a loss.
To add insult to injury, the Federal Government has imposed several mora-
toriums on foreclosures, which I believe are delaying thousands of homes in
Tarrant County from being placed up for sale. As these moratoriums are lift-
ed, there will be a flood of foreclosures. These foreclosures will result in
motivated banks and lending institutions attempting to get these properties
off their books. This will cause continued downward pressure on home
prices until the inventory is absorbed. Therefore, the number of homes sell-
ing may increase during the next several months, but prices are not going to
get better any time in the foreseeable future.
It is hard for individuals attempting to sell their homes to compete with
lending institutions that can absorb losses in the thousands of dollars with-
out blinking an eye.
The Not-So-Ugly
As previously noted, we are not immune to the overall downturn in resi-
dential real estate. However, compared to most other large metropolitan
areas, Tarrant County has fared well. Our stability has helped insulate us
from the roller coaster ride that other regions currently are experiencing.
Because we never saw the huge run-up in home prices, we have not seen a
steep decline either. This has kept our market moving and not stagnating
like so many other markets in the country.
The Metroplex has been recognized as a leader in job creation and has a
diversified economic base. Our low unemployment rate of 6.7 percent is
well below the national average of 8.9 percent and people migrate to where
the jobs are. It also helps that Tarrant County is home to several Fortune 500
Companies including American Airlines, BNSF Railway, D.R. Horton, XTO
Energy, RadioShack and Americredit. Tarrant County also is home to Acme
Brick, Williamson-Dickey, Justin Industries, Pier 1 Imports, Cash America
International and GameStop to name a few.
As we go forward our diversified economic base, natural resources, cul-
ture and western heritage will all continue to be recognized as ingredients
that have helped make Tarrant County one of, if not the best, place in the
country to own residential real estate.
Scott Burdette is the managing director of IRR-Residential Valuation Consultants LLP and has more
than 22 years of experience in the residential appraisal profession. He holds the SRA designation from
the industry leading Appraisal Institute.

Fort Worth Business Press The Residential Real Estate Forum 17

 New campaign focuses on local housing industry
By Aleshia Howe
ahowe@bizpress.net
After watching consumer confidence in the local hous-
ing market dwindle in recent months, the Greater Fort
Worth Association of Realtors decided to take matters
into its own hands with the launching of its TGIFW, or
Thank Goodness It’s Fort Worth! campaign.
Unveiled to its Realtor members April 8, leaders of the
local organization hope the campaign will capitalize on
North Fort Worth’s healthier-than-most home
sale and value indicators and downplay the national
headlines.
“As a part of our strategic plan, which was written in
the fall of 2008 for the ‘09 year, we assessed how we
felt our market was being affected by the national media
and we knew our statistics locally and felt like we had
some good stats to report,” said Sherry Matina, CEO of
the Greater Fort Worth Association of Realtors, or
GFWAR. “We are cognizant that there are pockets of the
Metroplex that might be negative in some statistic cate-
gories, by in part sales figures and appreciation are both
stable and we wanted to give the buying public the con-
fidence to buy in ’09 when there’s a lot of national press
promoting that it’s not a good time to buy.”
According to an opinion survey issued by the GFWAR
in March 2009, through its Realtor members, organiza-
tion leaders had the right gut instinct. Association mem-
bers, brokers and affiliates sent electronic opinion surveys
to about 1,800 individuals asking for input on the local
housing market. Of those, more than 350 responded –
half of which were in the 40 to 59 age range, with even
distribution in older and younger categories for the
remaining balance. All but 6 percent of respondents
were homeowners and three out of five valued their
homes between $150,000 and $499,000.
Of those polled, 66 percent said foreclosures were
negatively affecting home prices and 42 percent of
respondents said they are delaying real estate decisions
until the economy stabilizes.
The home values, however, are where the Metroplex
shined, Matina said. In the public opinion survey, 3.5 per-
cent of respondents said home values in their area were
increasing while 45.1 percent said their area values were
declining. The largest group – 51.5 percent – reported
stable home values in its area.
“Fort Worth may be the last place in the continental
U.S. where you can buy a really nice house for $100 per
foot. We just didn’t see the crazy rise in prices around
here and we didn’t see the fall-out. We’ve just been
bouncing along at 2 to 3 percent a year,” said Brants
Realty Broker/Owner Clay Brants, who also chaired the
GFWAR Public Relations Task Force.
Brants said homeowners he has spoken to are con-
cerned about the national market, but haven’t been able
to separate what’s happening in the local market. Case
in point, he said, was a newspaper article he read in
January in the Fort Worth Star-Telegram, which featured
an Associated Press story asking readers ‘Have we hit
bottom in the housing market?’
“It was a story about a New York guy who invested in
a Florida house for like $80,000 and it was only worth
$40,000,” Brants said. “… That doesn’t have anything
to do with North Texas and we quickly realized that the
Star-Telegram, in an effort to cut costs, had cut reporters
and was running these stories written by some guy in a
windowless office in New Jersey about people in New
York who were losing their shirts. Meanwhile, people
18 The Residential Real Estate Forum
here are reading that and thinking our market is suffer-
ing the same fate. And that’s just not the case.”
Matina said her organization took a cue from a Realtor
organization in Tulsa, Okla., which launched a similar
campaign with the tag line ‘It’s a good thing you’re in
Tulsa,’ which highlighted the local industry. Soon after its
launch, the Oklahoma Association of Realtors picked up
the effort and soon the story was picked up by newspa-
pers across the state and eventually by USA Today news-
paper.
“It improved their buying public’s moral and showed
their area buyers that their market was not as all the
other places being covered by the national news,”
Matina said.
GFWAR brought in local public relations firm Paige
Hendricks Public Relations Inc. to bring the campaign to
fruition by creating a logo, a tag line
and a library of print- and camera-
ready art for Realtor members to use
in their own marketing.
“We wanted to take on the driving
force role behind this; really give our
members some information to stand
on when they do their own advertis-
ing and marketing to clients,” Matina
said.
After reviewing the survey results,
Matina said she was surprised to see
a lot of people think they want to buy
a house, but not many think they
want to sell because they are con-
vinced they couldn’t get a suitable
offer.
“But with rates these low, there’s
going to be an increased demand for
properties and we have to have
something to sell them,” Matina said.
As home builders are at a relative
stand-still, Brants said he agrees with
Matina.
“With builders putting the brakes
on new home building activity …
investors are trying to snap up all of
the foreclosures so we need people
with existing houses to step up and
put theirs on the market,” he said.
Brants said the slow down in new
construction in North Texas during the past two years
drastically has reduced the number of new homes avail-
able to area buyers – and once consumer confidence
comes back and more people are in the market to buy a
home, consumer confidence will create an instant
demand for properties.
“We’re already short of good properties to sell right
now,” he said. “And people are looking to buy, but they
have one to sell, too. But if they can’t find one they like,
they’re not going to sell theirs and it creates a stand-still,
which is crazy because of the rates right now.”
Thanks to federal government aid, the national mort-
gage rates are at historic lows – a factor Matina said was
“not just a pivotal factor, but the pivotal factor in all of
this.”
“Interest rates are crazy low and we’ll never see them
like this again,” Brants said. “They’ve got to come up to
fight inflation and I think people who are a little scared
to buy now are going to look back in five years and
think ‘why didn’t I pull the trigger?’”
April 17, 2009