Fort Worth Bank Foreclosures Now Including Lots of Condos

by Peter Vernon on cities

Fort Worth bank foreclosures are also now including a lot of condos, just like other cities with a glut of distressed condo units, according to Addison-based real estate research firm and based on data from the Federal Reserve Bank of Dallas.

However, the distressed condo problem in Fort Worth is not as bad as it is in Miami, where there are thousands of foreclosed and vacant condo units, or in Phoenix, where the median condo price has gone down by 43 percent over the past 12 months.

In downtown Fort Worth, there are currently 87 condos available for sale, equivalent to a 30-month condo supply in the city. In Dallas, there are 123 condos for sale which are priced above $950,000, equivalent to a 5-year supply using current sales rates.

Overall, Dallas has over 400 newly-built condos for sale which are still unoccupied. It also has a high foreclosure rate for condo units, accounting for one out of every four condo foreclosures in the whole North Texas region this year.

Local analysts said that condo development projects in Dallas increased after a lot of commercial property projects were launched, swamping the city with condo units that became unaffordable to many of the city’s residents.

As shown in a 2006 report by the Federal Reserve Bank of Dallas, there was overbuilding of townhomes and condominiums in Dallas and in Fort Worth, leading to relatively high levels of Dallas and Fort Worth bank foreclosures in the condominium sector.

In 2007, developers continued to build condos, putting up 662 additional condo units. But in 2008, several developers recognized that the North Texas market has not been absorbing the supply. Mandarin Oriental saw what was coming so it canceled its plan of building 90 high-end condo units in Dallas. It explained its decision that the Dallas luxury market was being swamped both with hotels and residential units.

This year, condo development has significantly slowed, but weak sales in the higher end of the condo market have not been reducing the condo supply. About 90 percent of condo units in Dallas are being sold above $134,000, which is the median for condos throughout North Texas.

Compared to Dallas, Fort Worth condo foreclosures are still manageable. Dallas has over 30,000 residents, including people living in nearby Victory Park and Uptown areas, while Fort Worth has only around 4,000 residents.