Mortgage rate, stock market and other economic fluctuations will always have an effect on consumer confidence, but DFW area builders have been able to adjust, improving cycle times and leveraging costs.
DALLAS—In its latest new hire, Trendmaker Homes hopes to capitalize on a metro known for its strong employment growth and housing affordability. Dallas-Fort Worth, which ranked in the top five nationally for population growth in 2017, has a significant portion of its population in the prime homebuying demographic of the 25-to-44 age cohort.
Bruce French was hired as vice president of land acquisition and development of Trendmaker’s newest homebuilding division in Dallas-Fort Worth. French will focus on growing the company’s acquisition efforts for future communities. In this exclusive, he discusses the strength of the local housing market, what’s ahead for the second half of the year, challenges and location trends.
GlobeSt.com: What is unique about the DFW housing market? French: Strong job growth, continued population expansion and relatively good housing affordability have fueled the Dallas-Fort Worth housing market in recent years. Despite a tepid last two quarters in the metro area, the residential sector can still rely on strong drivers such as its business-friendly climate. Mortgage rate, stock market and other economic fluctuations will always have an effect on consumer confidence, but area builders have been able to adjust, improving cycle times and streamlining construction costs. The Dallas-Fort Worth metro has seen area wages starting to climb again and job growth continuing to exceed 3%, all very good signs for the housing market.
GlobeSt.com: What land acquisition and development opportunities and challenges will homebuilders in DFW face in the second half of the year? French: There will continue to be plenty of homebuilding opportunities in Dallas-Fort Worth, which was ranked the number one overall real estate market coming into 2019 by Urban Land Institute and PwC, but it will take considerable skill and teamwork to capitalize on these opportunities. Higher density in-fill tracts and repurpose uses from commercial to residential zoning will always be highly sought after. Moving inside to out, new infrastructure improvements, most notably the extension of the Dallas North Tollway will put suburban tracts of land on developers’ radar that historically did not have good enough access.
Through ventures with developers and other builders on larger tracts of land, special financing districts can be created to reduce development costs. Also, seeking out distressed land situations where the owner may need to reset lot sales prices can allow for builders to offer attainable new homes. That’s a situation where TRI Pointe Group’s financial resources could enable the bulk purchase of lots and allow a seller to pay down development debt.
Of course, with opportunities come hurdles. The usual challenges of land costs, which continue at record-high levels in most submarkets as well as project approvals have affected builders in the Dallas-Fort Worth area. Also, weather has delayed many projects planned for delivery in the first half of this year, negatively affecting builder schedules and business plans.
GlobeSt.com: What are some current location trends, and where is Trendmaker Homes looking to acquire and build? French: The focus in the Dallas-Fort Worth metro continues to be the acquisition of lots and building in the areas with the highest job growth along with infrastructure expansion, which are mainly in the northern submarkets. Trendmaker Homes is targeting developed lot opportunities in master-planned communities and projects developed by experienced land developers.
GlobeSt.com: Why are these locations desirable, given the area demographics? French: Situated in the high-growth high-demand corridors near new job creation and expansions, the northern tier submarkets in Dallas-Fort Worth are typically also located in favorable school districts. In addition to those drivers, the extension of the Dallas North Tollway, which connects downtown with cities in Collin, Denton and northern Dallas counties, and plans for the Outer Loop in the south metro, will shorten commute times and open up new residential development opportunities.
Trendmaker Homes is a member of the TRI Pointe Group family of premium regional homebuilders.
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