If you’re having trouble finding a house, blame it on Toyota — and State Farm Insurance, Boeing, Kubota Tractor, McKesson Corp. and dozens more corporations moving tens of thousands of workers to North Texas.
Each year, more than 60,000 people come to the Dallas-Fort Worth area to fill thousands of jobs; Toyota alone is bringing almost 4,000.
That’s made the D-FW area one of the hottest home markets in the country, driving up prices to unheard of levels.
The strong demand for housing has also created one of the biggest home shortages in decades. It’s a tough time to buy, both for the people moving here and longtime residents.
Armin Salehi, who relocated to North Texas with Toyota’s headquarters move to Plano, looked for a house for more than three months.
“It’s very difficult with how crazy the market is — very hard to find a preowned home not significantly overpriced,” said Salehi, who started his search late last year.
Salehi said he looked at about 50 homes, including one built in 1989 with no updates. “It had nine offers on it,” he said. “It was already overpriced.”
After banging his head on the preowned market, Salehi went with a new townhouse in Carrollton. He transferred from Toyota’s office outside Cincinnati.
“It’s a 10-minute commute to my new office in Plano,” he said. “I went about $80,000 over what I was budgeting for. I got a roommate to help ease the pain.”
For some, it’s still a ‘bargain’
While North Texas residents are gasping over the run-up in prices, buyers relocating from the West Coast and the Northeast think the area is a bargain, agents and analysts say.
“With most of California and the bigger East Coast cities, their median prices are well above ours,” said Ted Wilson, a principal with Dallas-based Residential Strategies. “They come here and can afford it and put money in their pocket.
“Toyota captures the headlines, and some of their people are coming here with big equities from California.”
Wilson said that the “relo business” has been a boon to North Texas housing — particularly the builders. “The builders tell me corporate moves have really bolstered their sales,” he said.
Out-of-towners are snapping up dozens of new houses at the 2,000-acre Windsong Ranch community under construction on U.S. Highway 380 in Prosper, where prices start at about $350,000.
“We’ve sold a lot of houses to Toyota people,” said project developer Craig Martin of Terre Verde Group. “I have almost 100 Toyota relos. Relocations make up a little over 40 percent of our buyers.”
Martin said the largest share of his out-of-town homebuyers is coming from California — about 14 percent. He’s also getting homeowners from other parts of Texas, North Carolina, New York and Kentucky.
“There are people moving in from a lot of different places,” Martin said. “We track their ZIP codes to see where they are coming from.”
Jake Wagner of community developer Republic Property Group said his firm’s Phillips Creek Ranch in Frisco and Light Farms in Celina have been a hit with relocating buyers. New homes in Trinity Falls start at just under $300,000.
“I know we have sold over 100 homes just to Toyota repos” in the two developments, Wagner said. “We encourage our homebuilders to build a high percentage of speculative homes. The ability to have ample product on the ground is a big factor in attracting relo buyers.”
Republic Property has created detailed websites for its communities to make shopping easier for out-of-state house hunters.
“We have invested heavily on the digital side to give a relo buyer in California, Florida, New York or Kentucky a way to really understand the feel and the amenities of the communities,” he said.
Pushing home prices higher
One of the reasons homebuilders have been able to raise their median prices about 55 percent in the last five years is that corporate transfer buyers are willing to pay more, said Page Shipp of MetroStudy Inc.
“They are often dealing with buyers who are used to higher prices,” Shipp said. “That’s one of the reasons they’ve been able to push prices.”
Many of Toyota’s California relos still think North Texas home prices are a bargain.
“It’s amazing the amount of home you can get here for the money,” said Ryan Abenes, who relocated with Toyota’s financial services division. He and his wife bought a new home in the Artesia community in Prosper.
“We avoided any kind of bidding on an older home — a situation a couple of my co-workers got involved in,” Abenes said.
They looked at new houses in Frisco and McKinney before deciding on Prosper.
“One of the things important to me was distance to work, and price,” he said. “Prosper is a growing community, and my wife and I wanted to be a part of that. They have great schools.”
Abenes is originally from the Midwest and lived in a condo in Los Angeles. “Moving out here, I pretty much doubled the square footage for equal or less the price,” he said.
Traffic not a problem
The newcomers aren’t put off by the traffic in Dallas’ northern suburbs either.
“I heard stories about the traffic Dallas was having with all the construction,” Abenes said. “It reminds me of the Midwest — it’s nothing like L.A. traffic.”
The prospect of a long commute didn’t phase Peter Lokken, who relocated with Toyota from Kentucky. He’s rented an apartment in Dallas’ Uptown neighborhood, more than 20 miles from Toyota’s new campus. Lokken said he likes the walkability of Dallas’ close-in neighborhoods.
“The proximity to restaurants, bars, grocery stores and recreation is a major selling point for the area too,” he said. “I am very happy with my decision of neighborhood and have actually extended my lease for another year.”
Lokken travels weekly for Toyota and isn’t chained to a desk at work.
“I’m typically once a week to the office,” he said. “Going from Uptown to Plano, the traffic isn’t as bad as from the opposite direction.”
Most of the corporate homebuyers who work in Plano and Frisco opt for a home in the northern suburbs.
Andrew Blomdal recently relocated from Redondo Beach, Calif., to Anna in north Collin County. He’s about 40 minutes from Toyota in Plano.
“Other than our development, it’s still fields all around us,” Blomdal said. “In the evening, it’s quiet. On Friday nights, you can hear the high school football stadium.”
Blomdal said he wanted a new house, and a big garage was a must.
“I’ve never lived in an area with hail, and I’m concerned about keeping everything covered,” he said. “Our youngest won’t be in school for a few years. It was mainly about the commute time and garage size.”
The family lived in an apartment in California and are first-time homeowners.
“We had talked to a couple of people who had already come out here and got the gist of the market,” Blomdal said. “They said whatever you want, you’d better put an offer on it or it will be gone the next day.”
That’s part of the appeal of buying a new house with relo buyers who are tight on time.
“You have a very short window to work with the people,” said Mary Frances Burleson, CEO of Dallas’ Ebby Halliday Realtors. “We are educating them about the marketplace, and we have to answer a lot of questions.”
Burleson said her firm has classes twice a year to educate its agents on working with corporate move buyers.
“If you go into Collin County — Frisco, McKinney, Prosper — it’s a big part of our business,” she said. “Corporate America has found us, and they like it.”