Relax. Maybe that’s all you need to know. Just relax. We’re doing fine. Read all you want about real estate markets sagging and bubbles bursting. That’s not happening here. The real estate boom never reached Dallas, so the bust won’t either.
Picture Dallas as the slow-moving tortoise, now winning the race.
It’s as apt a metaphor as any. We are the land of steady, if at times unsatisfying, returns. Take Plano. According to North Texas Real Estate Information Systems, in 2000 the median home price rose 7 percent; then 4 in 2001; 3 in 2002; 1 in 2003; 2 in 2004; and, as of press time, 7 again in 2005. The same is true for the rest of North Texas. The median sales price for existing homes has risen about 4 percent each year since 2000. Las Vegas, by contrast, saw its median home price surge 107 percent over the same time span—and 52 percent alone in 2004. Today, however, the home price research company Fiserv CSW says Vegas should expect a 7.9 percent decrease in home prices in 2006 and a 5 percent decrease in 2007. It is, in short, the worst place in America to buy a home. And not far behind it are Los Angeles, San Diego, Phoenix—all the places associated with the housing boom. But not Dallas. Dallas should see a 5.9 percent increase in home prices this year and a 6.3 percent increase in 2007, according to Fiserv CSW.
See? Slow and steady.
But why is it so slow and steady? Well, for one thing, we are bound by nothing in Dallas. Not an ocean nor a mountain range nor, for that matter, red tape. In LA it can take 10 years to go from a tract of land to a key to the house. In North Texas, it takes 18 months for same, says Ted Wilson, a partner at the Dallas-based Residential Strategies Inc. Lawrence Yun, an economist for the National Association of Realtors, says, “On the coasts, there’s a lot of restraints related to sprawl.” But in Dallas, he says, there’s none of that. If we want to build, we build. This spawns McMansions, sure, but the supply of houses also keeps home prices from skyrocketing.
Another reason for our stable growth is, actually, our unstable economy. The dot-com bust hit Dallas-Fort Worth hard. Nobody was hiring in 2002 and 2003. And according to the U.S. Bureau of Labor Statistics, in 2004 and 2005, the time in which other local economies recovered, job growth in the area increased by only 1 percent. That meant people weren’t moving here. That slowed the appreciation of houses in Dallas. But it didn’t stop the people already here from buying them. The interest rates were so low, around 3 percent, that it made sense for Dallasites to buy rather than rent in the years after the bust. Also, people in Dallas could afford to buy. According to the National Association of Home Builders, in 2005, 61 percent of homes sold in Dallas were affordable to families earning $65,000, the city’s median income. (In LA, only 2 percent of homes sold were affordable for a family making the median income there.) And now, a year later, job growth is back, expected to be up 2 percent or more, the strongest growth since 2000. This leads people like Virginia Cook, CEO of Virginia Cook Realtors, to conclude: “Dallas is on the radar as an established market that is growing at a healthy rate.”
Healthier still, closeness to the city’s core no longer means lower levels of home appreciation. With more than $1 billion worth of development in the Central Business District, “now everything south of LBJ is truly prime real estate,” says Robbie Briggs, the chairman of Briggs Freeman Real Estate Brokerage. “And in every area, every pocket, people are renovating.” It’s paying off, too. In East Dallas, for instance, from 2000 to 2005, the median home price rose 53 percent, according to North Texas Real Estate Information System. Perhaps more surprising, the already costly Park Cities home rose 50 percent in value over the same period. It’s such a good investment that people are tearing down houses just to build bigger ones on the same lot. “With more and more focus on downtown,” Briggs says, “all the close-in markets should really shine.”
So welcome to Dallas in 2006, where emerging neighborhoods can be found to the south of downtown (See “Where To Buy Next”) and in huge condos to the north of it (See “The Condo Craze”)—and where there are still great buys everywhere in between (See “What Your House Is Really Worth”).
Welcome to Dallas in 2006. No busts in housing bubbles to be found here. And—sadly—no booms either. But damn if it isn’t a good place to live.
|DOWNTOWN IS THEIR PLAYGROUND: Deborah and Vance Arnold on their terrace at 1999 McKinney.|
The Condo Craze
Dallas has seen unprecedented condo construction in recent years. So what’s fueling the sudden surge? Or, better question: will it hold?
The baby boomers are tired. Tired of their houses, which are bigger than ever, emptier than ever. Tired of their lawns and the upkeep required. Tired of the commute. Tired, even, of their neighbors.
“It’s about simplifying,” says Deborah Arnold, whose view of the downtown skyline from her 2,500-square-foot condo is cause for envy. She and her husband Vance, a portfolio manager with Frost Bank, got out of University Park four years ago and moved down here, to 1999 McKinney, because they were tired of the responsibilities that go along with owning a 4,500-square-foot home. They needed something smaller. They wanted something different. It didn’t hurt that Deborah sells condos for a living—sold, in fact, all the units of 1999 McKinney and now is the sales director at the Stoneleigh Residences.
Empty nesters like the Arnolds have as much to do with the surge in Dallas’ condo sales as anything, though there’s no statistical evidence to support this, only anecdotes from the city’s real estate agents. Speaking of anecdotes, here’s one: more than 20 projects are under construction in the urban core, some 2,600 units in all. One thousand more units are set to break ground soon. “We’ve just never seen this amount of demand before for downtown or Uptown living,” says Cassie Gibson, a custom market researcher at the Dallas-based Residential Strategies Inc.
Most of these condo projects today are high-end—world-class amenities offered at world-class prices. So who is fueling this unprecedented market, at these top-dollar rates?
Deborah Arnold thinks it’s people her age, the ones who can afford it. “Baby boomers are just now becoming empty nesters,” she says. There’s a pent-up demand among them for urban housing and, suddenly, a solid supply. In her building alone, she says, empty nesters comprise half the residents. The other half is made up of young professionals and young families.
But it wasn’t always this way. James “Boots” Reeder, an empty nester himself who moved into the condo he developed in 1998, at 1925 Cedar Springs, says his 12-unit building had sat vacant for 10 years. All around him were overgrown lots and dilapidated buildings. Yet all his Highland Park friends could talk about when he invited them over for dinner was how great his place was. He wasn’t surprised by a 1999 survey of Dallas residents that showed people desperately wanted condos.
And Dallas wasn’t the only place. By 2003, condo sales hit a nationwide high. Close to 900,000 units were sold, according to the National Association of Realtors. Today, after a decade of steady gains, there are 31,486 condominiums in Dallas, according to figures from Dallas Central Appraisal District.
Phenomenal growth, sure, but will it hold? The National Association of Home Builders is expecting a decrease in condominium construction this year. In Dallas, too, there are signs of slowing demand. The Rienzi tower at Turtle Creek announced in September that it would switch its 154 units from condos to rentals. Mike Puls of Dallas-based Foley & Puls, which specializes in residential real estate, says other planned condominiums won’t make it that far. “There were probably 40 projects as of the middle of last year,” he says. “Ten will actually get constructed.”
But this is not the 1980s, when condos were what Puls describes as “nothing more than apartments with better carpeting.” This is different. Demand today is built “on a lifestyle that’s evolved,” says real estate agent Al Coker, not on making a killing in the market, though there are, of course, outside investors in Dallas condominiums. Yet even Puls says that condos sales here should expect steady growth in the coming years.
Coker, ever the optimist, says agents are selling about 6,000 condos a year now and estimates they’ll be selling 12,000 a year in about three or four years. Thanks, in part, to people like Deborah Arnold.
Click HERE to access a PDF with our side-by-side comparison of the hottest condos in Dallas.
What Your House Is Really Worth
We chose 17 houses in just as many neighborhoods to see what your money—$250,000, $750,000, and $1.2 million—can buy.
803 Lakeview Dr.
Traditional two-story home in the northwest suburb
Year built: 1992 List Price: $234,750 Taxes: $5,837 Square Footage: 2,465 Lot: 50 by 116 Bed/bath: 3/2.5 Neighborhood: No worries about your children riding their bikes safely in this family-oriented stretch of homes. Schools: Coppell ISD ranks high on the list. Pluses: Spacious square footage, breakfast bar, large living room, and granite countertops in the kitchen. Minuses: Not great if you’re single, looking for original restaurants and nightlife, or multicultural living.
5439 Merrimac Ave.
Tudor home tucked in the middle of a block filled with twenty- and thirtysomething neighbors
Year built: 1927 List Price: $249,900 Taxes: $4,275 Square Footage: 1,280 Lot: 60 by 130 Bed/bath: 2/1 Neighborhood: Greenland Hills has central location with access to Greenville’s restaurants and nightspots and shopping at Mockingbird Station. Schools: Stonewall Jackson Elementary is one of the best in DISD. It feeds to Woodrow Wilson. Pluses: Close to Greenville action and easy route to downtown. Minuses: Only one bathroom; definitely a fixer-upper.
9915 Tanglevine Dr.
Two-story traditional home in northeast Dallas
Year built: 1966 List Price: $230,000 Taxes: $5,255 Square Footage: 3,058 Lot: 70 by 125 Bed/bath: 4/2.5 Neighborhood: White Rock area with homes built between the late ’50s and early ’70s. Schools: Richardson ISD; Northlake Elementary and Lake Highlands are AEIS academically acceptable schools. Pluses: Community involvement in schools and churches; great price per square foot; two bedrooms up and two down; sunroom and pool. Minuses: Homes in this area are a little shabby: they’re not old enough to have been totally remodeled but not new enough to be move-in ready.
3116 Charring Cross
Traditional custom-built home with professional landscaping in northern suburb
Year built: 1988 List Price: $249,950 Taxes: not available Square Footage: 2,709 Lot: 110 by 70 Bed/bath: 4/3.5 Neighborhood: Fosters family-friendly living. Schools: Mathews Elementary; Plano Senior High is a two-time National Blue Ribbon School. Pluses: Island kitchen opens to sunroom, three living areas, jetted tub, and updated paint and carpet. Minuses: Cookie-cutter exterior; dining is mostly chains.
Reynaldo DeLeon pays close attention to architectural details. So when he found this 1927 prairie-style bungalow in Oak Cliff in 2003, he had to have it. Most of the house now is as it was then, from the wood floors to the kitchen cabinets to the wood panels. “I tried to keep everything in its original state, but, of course, I did updating where it was possible,” DeLeon says. The horizontal lines and open floor plan are reflective of the style of the time.
The asking price was $249,900 (with taxes of $4,168). The price was a little high for a 1,563-square-foot home in Oak Cliff, given the schools nearby and the three-bedroom, one-bathroom floor plan. However, the price takes into account the historic appeal and great shape of the interior. The home also has original wavy glass windows, a wide wraparound porch, and a recently renovated kitchen. The Bishop Arts District—with its chic restaurants, bars, and shops—is two minutes away, and the eclectic vibe of the historic ’hood is untouched.
5608 Fairfax Dr.
European-style villa in northern suburb
Year built: 2002 List Price: $749,000 Taxes: not available Square Footage: 4,051 Lot: not available Bed/bath: 3/2.5 Neighborhood: Exclusive gated neighborhood with waterfront properties, hike and bike trails, and European-style parks. Schools: Spears Elementary and Frisco High School both score above average on TAKS. Pluses: Dramatic staircase, custom molding and built-ins, granite countertops, double ovens, and Sub-Zero appliances; near Stonebriar Centre; gated community. Minuses: Despite the square footage, the home has only two full baths. And don’t get us started on the traffic at Preston Road and 121.
8520 San Leandro Dr.
Newly built traditional home on south side of White Rock Lake
Year built: 2004 List Price: $719,950 Taxes: $14,358 Square Footage: 4,041 Lot: 110 by 128 Bed/bath: 4/3.5 Neighborhood: Wide streets wind around shaded lots with assortment of new construction and older, architecturally diverse homes. Schools: Sanger Elementary and Bryan Adams High School nearby. Pluses: Gourmet kitchen, custom built-in book shelves, media room with wet bar, separate wing with fourth bedroom and separate entry; quick jaunt to Arboretum and White Rock Lake. Minuses: Removed from shopping and nightlife.
1216 Merlot Dr.
Traditional home in affluent northwest suburb
Year built: 2000 List Price: $749,900 Taxes: $19,994 Square Footage: 4,593 Lot: .45 acre Bed/bath: 5/4 Neighborhood: Versailles addition with newer homes up to $1 million. Schools: Old Union Elementary; Carroll Senior High School has exemplary rating. Pluses: Backyard features pool, spa, pond, putting greens, and patio grill; neighborhood community pool and recreation center. Minuses: Suffers from the other symptoms of suburbia: homes out here tend to look alike, and there’s not much in the way of dining, culture, or nightlife besides Southlake Town Center.
901 Montreux Ave.
Newly built English-style home in hot suburb
Year built: 2005 List Price: $750,000 Taxes: not available Square Footage: 5,438 Lot: 120 by 122 Bed/bath: 5/5.5 Neighborhood: Gated Clairemont addition situated among other 5,000-square-foot-plus homes with some new construction. Schools: Liberty Elementary and Keller High School. The elementary is new and within walking distance. Pluses: Did you see the square footage? Gated neighborhood, private lake and pond, and Montreux Country Club nearby. Minuses: Neighbor is DFW Airport.
801 Tree Haven Ct.
Spacious brick home in northern suburb neighboring Lake Lewisville
Year built: 1998 List Price: $726,100 Taxes: $10,967 Square Footage: 3,976 Lot: .3 acre Bed/bath: 4/4.5 Neighborhood: Prestigious Highland Shores sits next to Lake Lewisville; some homes have lake views. Schools: Lewisville ISD. Marcus High School is a few miles away. Pluses: The crime rate in town is almost nonexistent. The community is affluent and near the lake. Minuses: The town is smaller, so you’ll be driving a ways for fine dining, shopping, and culture.
Teri and Robert Sullivan built their 3,138-square-foot home in Mockingbird Park in 1997 because they were tired of driving. “My husband had been commuting from North Dallas to downtown for 20 years, and it was time to move closer,” Teri says. So they agreed on this neighborhood next door to Highland Park for the shops, grocery stores, and restaurants “that aren’t jam-packed like in North Dallas.” The school district is not great, but the Sullivans weren’t concerned: the kids attended Texas Christian Academy. Still, they put the eldest son in DISD’s WT White for his senior year and were “pleasantly surprised.”
The home itself features a 1,000-square-foot great room, three floored attics, a walk-in pantry with wine rack, three bedrooms, two and a half bathrooms, a living area upstairs, a swimming pool, and a three-car garage (impossible to find in the area). The couple also added personal touches, such as Mediterranean-style doorways, a faux finish in the kitchen, a stone fireplace, and a grand staircase with iron spindles. The asking price is $739,000 with $12,438 in taxes.
3321 Westminster Ave.
Three-story updated traditional home in affluent and sought-after spot
Year built: 1927 List Price: $1.295 million Taxes: $13,275 Square Footage: 5,100 Lot: 55 by 135 Bed/bath: 4/4.5 Neighborhood: Situated in mecca of chic shopping and five-star dining. Schools: University Elementary and Highland Park High School are among the best public schools around. Pluses: Completely remodeled home with landscaping, oversize master bedroom, game room, and den. Minuses: Paying for ZIP Code; keeping up with the neighbors; congested, car-lined streets.
1322 Kessler Pkwy.
Modern “treehouse” designed by well-known local architect Gary Cunningham in historic East Kessler
Year built: 1999 List Price: $1.1 million Taxes: $15,393 Square Footage: 3,600 Lot: 132 by 215 Bed/bath: 3/2.5 Neighborhood: East Kessler Park is funky, fresh, and eccentric. Schools: Rosemont Elementary and Sunset High are nothing to brag about. Pluses: Super-cool museum-like pad with an elevator, heated cement floors, and catwalk with party deck over guest suite. Plus, the upcoming Trinity River Project can only be good for house values. Minus: Most homes at this price point have a lot more square footage.
5319 Bluebonnet Rd.
Queen Anne Victorian home in heart of suburbia
Year built: 1864 List Price: $1.2 million Taxes: $12,982 Square Footage: 7,500 Lot: 2.14 acres Bed/bath: 4/4 Neighborhood: Sitting on more than two acres, it is its own neighborhood Schools: Colleyville Heritage High School is tops. Pluses: More space than you know what to do with, wraparound porches and balconies, third-floor game room, heated pool. Minus: More space than you know what to do with.
3109 New Britton Dr.
French Country home on landscaped lot in safe suburb
Year built: 2001 List Price: $1.275 million Taxes: not available Square Footage: 6,044 Lot: 120 by 150 Bed/bath: 5/4.5 Neighborhood: Desirable Creeks of Willow Bend boasts large houses up to 10,000 square feet with accessible jogging and bike paths, parks, and greenbelts. Schools: Solid programs in Plano ISD; Shepton High and Plano West Senior High. Pluses: Media room, game room, lagoon-style pool with spa, waterfall, and tropical landscaping. Minuses: Around here, chain restaurants rule. And good luck getting to or from downtown—via the Tollway—during rush hour.
7214 Lakewood Blvd.
Mediterranean-style home in sophisticated neighborhood near White Rock Lake
Year built: 2000 List Price: $1.295 million Taxes: $25,923 Square Footage: 5,326 Lot: 60 by 180 Bed/bath: 4/3.5 Neighborhood: Large homes with old-fashioned neighborhood feel; active with bikers and runners. Schools: Lakewood Elementary and Woodrow Wilson High School are close. Pluses: Near White Rock Lake; close to Lakewood Theater and surrounding restaurants, bars, and shops; granite countertops, MosquitoNix and heated pool in backyard. Minus: There’s more crime here than in other upscale neighborhoods.
After living in a high rise for 13 years, Mary and Stephen Crosson wanted a lot that offered country charm, yet was situated close enough to the city’s core to put them within reach of the perks of city living. And Mary is an antiques dealer, so they needed a home to showcase their many collections. So, in 1998, the Crossons chose to build their 4,172-square-foot, three-bedroom Tudor-style home in Bluffview, on a half-acre lot chosen for its plentiful trees. “The home is like a sanctuary. When you look out from the upstairs, it’s a beautiful view of gardens, exotic birds, and trees,” Mary says. The home features high ceilings, antique chandeliers, stone fireplaces, and a kitchen that boasts granite countertops and slate floors. Spacious walls welcome natural light from oversize windows—perfect for showing off artwork. They also put in a wine closet to store their wine collection.
Private schools are nearby (the public ones aren’t superior), as well as trendy restaurants, shopping centers, and grocery stores. The hilly Bluffview area is a peaceful respite from hectic city living. The price was $1.185 million with taxes of $22,852.
Where To Buy Next
Whether you’re looking to invest in real estate or you just want to live someplace cool, these are the next hot neighborhoods.
OAK LAWN HEIGHTS
Here’s how to get there: head out of downtown on Maple Avenue, drive under the Tollway bridge, past the Rio Nilo Club, where a green and white flag snaps in the wind. Past Wycliff Avenue and the Morella Meat Market, where testifiers on Sunday screech the good Word in Spanish before a microphone and a portable amp. Past property owned by the Dallas Housing Authority and past the Eagle Liquor store, whose windows are barricaded behind steel. Now turn on Amelia, then again on Maple Springs. That home down there, the big one on the left that sits on two acres, just sold for $1.3 million. Drive around. Bungalows, ranches, modern abodes, freaky homes (like the one that looks like a machine shed)—they’re all here in Oak Lawn Heights, whose boundaries are Hedgegrove and Maple Springs, and Maple and Cedar Springs. The houses start at $200,000 and go up to, well, we’ve already said that. Young couples live here, as do gay couples, Hispanic families, and old-timers who moved here in the ’50s. The Victory Project is a mile away, downtown two. A DART station is coming soon. So are lots of condos. It’s tough to keep a good secret.
Lake Cliff has so much going for it. Downtown is a five-minute drive over the Trinity River. The Calatrava bridges, once completed, will serve as the main thoroughfares to the area. There’s a luxury condo development underway, casually known as the Lake Cliff Tower, to the north of the lake. It will have 60 units—some of them at $225 a square foot, half of what you’d find in Uptown—and will offer the best views in the city: downtown on one side, Lake Cliff on the other. A real estate fund called Incap, which invests in up-and-coming neighborhoods, is developing 67 townhouses a half block west of the tower. “My partner developed Knox Park,” says Brady Wood, CEO of Incap. “That was an emerging neighborhood 10 years ago. We think Oak Cliff is the new Knox-Henderson, the new Oak Lawn.” Monte Anderson agrees. He’s the dean of southern-sector real estate agents and the president of Options Real Estate. “North Oak Cliff has always been the most beautiful place,” he says. “It just was overlooked all these years.” Not anymore. “I think Lake Cliff is the up and riser. That area has a lot of potential.”
Why Prosper? Because Frisco is already crowded. Its population eclipsed 82,000 last year, and its streets can’t keep up. The traffic along Preston Road is maddening, yet the town itself isn’t half developed. So expect more traffic, more big-box retailers, and higher home prices in the coming years. And expect people to keep looking north. This is, after all, the mentality that made Frisco what it is today: look to the north, and then north of that, for the home of your dreams. Soon people interested in a plot of land and a decent-size home will find the lawns aren’t so big in Frisco and the houses aren’t so cheap. But if you keep driving, beyond the point that Preston Road dwindles to one lane each way, beyond the point where cattle graze in the field to your right, you’ll find Prosper, population 3,000, where real estate agents are ready to sell an acre of land at an honest rate. And if you stay on Preston Road, you’ll see a swath of green as big as a golf course—84 acres in all—with an $8 million mansion atop a rising hill. That home belongs to Deion Sanders, your new neighbor. Better still, Jerry Jones owns approximately 2,000 acres in Prosper. He has big plans to develop it. So get in while the gettin’s good.
Bound by Northwest Highway, Lovers Lane, Inwood Road, and the Dallas North Tollway, Devonshire has some sexy neighbors: Bluffview and Preston Hollow. But Devonshire homes—some of them bungalow, some ranch, and almost all of a mid-century feel—start around $350,000. Think of them as starter homes for the Highland Park and Preston Hollow set—or for those who aspire to be Parkies. The front yards are big enough for a game of catch, the sidewalks safe enough for any woman to trek, the streets shaded by trees and, in the late afternoon, stunning in their views. It’s the neighborhood June Cleaver would approve of. And yet, a few blocks away, down on Inwood Road, is the Inwood Theatre, a great place to catch an indie flick.
No neighborhood in Dallas is like the Cedars, just south of downtown. Artists, photographers, and business people live in the same studios in which they work. The views of the skyline from their roofs are unobstructed and breathtaking. Property is cheap. Gwen Gaylen, a community activist who lives in an 8,200-square-foot loft that was once a dress factory, says some land can be had for as little as $3 a square foot. Zad Roumaya and Will Pinkerton are developing a “green” 49-unit condominium on Griffin Street that offers shaded overhangs and rain-collecting roofs that feed the irrigation system. Every condo buyer gets a moped. The property is half sold, and Roumaya and Pinkerton haven’t broken ground yet. Yes, crime in the Cedars remains a problem. Yes, pockets of it are the embodiment of urban blight. But no neighborhood in Dallas offers a greater sense of community, and South Boulevard is the new Swiss Avenue. Then there’s Lee Harvey’s, perhaps the greatest bar in Dallas and, really, the personification of the Cedars. Here, trust-fund kids hang out with hipsters, artists, and wannabe gangsters. The bar is nothing more than a shack with a surrounding yard filled with barrels of fire that burn throughout the night. How strange it all is. How perfect.