More developers are circumventing both builders and realtors and selling directly to the consumer to adapt to today’s credit crunch. And, it works!
Before the bust, I had heard that southwest Fort Worth was the fastest growing segment of what some call the Metroplex — this conglomeration of communities that comprise Dallas-Fort Worth. There was growth, jobs, tons of homes being built and sold out there. Everyone was fat and happy, making money.
(There are still jobs!)
Developer Gary Hazelwood must have gotten that memo, too. The man who created Chateau Du Lac at Lake Grapevine found 1000 acres west of Benbrook at Veal Ranch, with that gently rolling topography that says budding Texas Hill Country. He loved it. “If we do this right,” he said at the time, “we may have no competition.” By doing it right, Hazelwood meant high quality construction and ground amenities much like what he had created at Chateau Du Lac, 90 lots of two-plus acres each with homes starting at about $1.5 million. Think uber high standards, Vaquero-esque. (In fact, Gary told me his company, Westmont Development, built the fence around Vaquero.) The developments, the Bella’s : Bella Flora, a gated, luxurious community of one to two acre lots starting at $125,000, $750,000 ish homes of at least 4000 square feet. Then there’s Bella Ranch, a little less luxe, smaller square footage, lots starting at $49,900 with a 2300 square foot building minimum, but also gated, exclusive, the two separated by a gentle hill.
The highly rated Alda school district was a pleasant surprise.
“School districts are driving real estate purchases.” he told me. With the education draw, Hazelwood had himself a veritable Southlake on the western fringe of Fort Worth.
It was 2007. The lots in Bella Flora were selling just fine, until the financial world as we knew it fell apart. Like most developers, Hazelwood was in a bind. The way it once worked : developers bought land and prepped it for development — put in roads, sewers, all the entitlements. They sold the neatly delineated lots to builders, took their money and galloped elsewhere to do it all over again. But in 2008, the banks froze up credit. Home builders found it nearly impossible to obtain lines of credit to build spec homes. Homebuilding is now back to lows not seen since the 1960’s because in order to build a spec house, builders must put down a substantial chunk of cash on every single spec. Banks clearly want more skin in the game. As a result, home starts are subterranean.
And developers are holding the dirt.
“We switched mindset immediately,” says Hazelwood. He began selling straight to the consumer, let them buy the dirt and hire the builder, then hammer away… all standards within the Bella Ranch or Bella Flora guidelines.
In fact, more developers are using this technique — Bluegreen Communities as well as The Tribute at the Colony. For developers, like everyone else in real estate, there is no more easy sell. Consumer direct sales require more funds for marketing to consumers and more work — no more easy-peasy builder’s lot draw.
It worked. Of 80 total lots in Bella Flora, 58 are sold. One third of younger sibling Bella Ranch is sold. That’s 46 lots in less than a year with 14 homes completed and at least 8 under construction. Even more amazing: the builders who bought lots and built spec homes in the Bellas SOLD THEM prior to completion.
Bella Flora and Bella Ranch are, in fact, one of North Texas’ biggest real estate success stories.
Most developers, said Hazelwood, are selling three lots per year max.
Still, I wondered, what was the draw to southwest Fort Worth? Where are these people coming from, I asked, and where do they work?
Alcon Labs in nearby Burleson. Note to Rick Perry: here’s another soundbite for your campaign. Alcon is adding thousands of jobs. This July, the town of Benbrook announced a partnership with Buxton Co. to develop a 1.5 million square foot open air regional shopping center in southwest Tarrant County called The Trails Town Center. The Trails will be at the southeast corner of Interstate 20 and Winscott Road.
Called a gateway to West Texas, the project should provide more than 6,250 jobs and generate $375 million in annual retail sales.
Are there any shopping centers besides this under construction in the U.S. today? Zero in 2010. New shopping center construction has ground to a halt.
A new tollway is going in on the west side of Fort Worth, there’s hospitals employing young professionals, and families are moving to the area because it’s only a ten minute commute to Fort Worth private schools. Benbrook is hot.
“People want space for their families,” says Hazelwood. “They’d rather move out a little farther to get land — two acres instead of a 50 by 150 lot — to raise their kids. They can be more self-reliant — do solar and wind power, and for a $9000 investment, drill a well: no more water bills.”(In Tarrant County, if you have one acre of land you can drill your own well. Parker County requires two acres.)
Hazelwood is seeing people moving closer to Fort Worth from Weatherford, Burleson and Granbury even as he sees Fort Worth families moving out of the city seeking pastoral peace and quiet. He’s even sold to aging Baby Boomers who want to be closer to great hospitals and their grandchildren in Fort Worth. Right now, residents pay taxes to Tarrant County only — no city taxes, though Hazelwood says there will come a day when this property will be annexed into the city.
But for now, Hazelwood has found and is building the next frontier. Southwest Fort Worth is the gateway to West Texas and the affordable good-life promise it holds. You couldn’t ask for better topography, he says: two lakes, horse stables, golf course and, not too far down the road, cattle grazing.
He’s blazing another frontier, too, at the same time, on the development front.
“We are listening to the buyer,” he says, “really listening because we want to sell these lots. The way we are doing it actually brings us in more for the long haul and connects us to our buyers.”
Hence, buy a lot from Hazelwood before September 30, he’ll cover the principle and interest for one full year.
Now that’s a deal just too good to refuse.