Residential market improves as available land becomes scarce
The first Darling Homes development in Southlake, which is located on Veranda Lane, is underway with 38 lots being built. The new area of residential construction is a relief for the real estate market, but also a source of concern that this is one of the last areas available in the city for residential building.
With the downturn of the economy in 2007, Southlake saw a drop in housing development between 2008 and 2009. But as the market has improved, a conflict has risen: Southlake is running out of room.
"It's really a privilege for us to be [in Southlake]," said Cheryl Turner, Darling Homes vice president of operations. "There's not a whole lot of opportunity [in Southlake]."
The new development, Verandas at Southlake, features patio homes aimed at buyers looking to downsize and simplify their life.
Landlocked
According to the city's 2013 fact sheet report, Southlake has a population of approximately 27,000 people in the 22.4 square miles between Dallas/Fort Worth International Airport and Alliance Airport. The projected build-out population is 34,118.
Ken Baker, senior director of planning and developmental services, said that roughly 80 percent of Southlake's residential land is used.
With Southlake's available residential land disappearing, the Southlake real estate market has picked up momentum, which Southlake Realtor Roxann Taylor has seen become competitive.
"Everyone is looking for land," Taylor said. "It's a great time to be a seller because inventory is lower, demand is higher."
Keller Williams Realtor Danny Force said the scarcity of land increases property values. As of February, he said there are 32 listings for residential areas in Southlake. In 2013, there were a total of 35 lots sold in the city, Force said.
Southlake still building
During the past fiscal year the city approved 188 residential permits to build, and 54 were approved during the first quarter of the new fiscal year. This is a jump from the previous fiscal year's 113 permits and 92 permits the year before that, according to the city's records.
Baker said build-out is projected to be in 2030.
"We base [build-out] projections on a land-use plan," Baker said. "There is no cap on the number of permits that can be issued, but obviously the amount of available land will limit the number of single-family residential units ultimately constructed."
Force said build-out could happen sooner. One of the last major development areas for sale open for residential building is a 42.45-acre tract near Bob Jones Park on White Chapel Boulevard zoned for 33 1-acre lots, Force said. He explained there could be other large lots out there, but landowners are sitting on the property for now.
Current Trends
According to February 2014 North Texas Real Estate Information Systems records, the average property in Southlake has four bedrooms, is 4,200 square feet in size and costs $678,000.
But newer developments, such as the Verandas, are changing the landscape.
Turner said Verandas at Southlake has single-family, single-story homes with three bedrooms, and they will cost between $500,000 and $600,000. She said Darling Homes is targeting empty-nesters and buyers who don't want to leave Southlake but are looking for less expense and maintenance of their homes.
Despite the Verandas lots requiring less space, the lack of available land in the city continues to pose challenges for the homebuilder. Turner said there is not much land for residential use, and even small lots are few and far between.
But the smaller lots are what many buyers are looking for, Force said.
"They want something with as little land as possible," he said. "They don't want upkeep."
Carillon Southlake, located off White Chapel Boulevard and SH 114, is another residential community that is building. In 2012, it had Southlake's largest remaining tract of undeveloped property. Carillon's new developments range from large-acre estates to smaller villas.
Turner said, "We think we will co-exist well because we offer something very different."
