When AT&T announced this summer that the company was moving its corporate headquarters from San Antonio to Dallas, real estate agents in the Park Cities salivated. The arrival of executives from the world’s largest telecom company would surely jump-start the dormant residential market in North Texas’ most luxurious address.
The Park Cities comprise two separate incorporated cities just north of downtown Dallas: Highland Park (home to people like Dallas Cowboys owner Jerry Jones) and its “downscale” neighbor to the north, University Park (adjacent to Southern Methodist University). Although UP, as it’s known locally, is now overrun with McMansions, it possesses a quaint, small-town feel thanks to the many family-run shops that populate the area, as well as its well-maintained parks. HP, meanwhile, mixes beautifully restored homes of all styles (prairie, modern, Georgian) with audacious McMansions.
One of the priciest properties to sell this year is a 15,715-square-foot, $10.5 million “chateau” that features six bedrooms, a wine cellar, pool, guest quarters and an elevator. Competing in that price range was an 11,000-square-foot condo that sold for $9.95 million. While it only features four bedrooms, it boasts killer views, a media room and a shoe closet many women would kill for.
Despite those closings, there was a problem: The expected luxury market kick from AT&T never happened. Instead, the downturn did.
In these neighborhoods, the luxury market has mirrored the relatively stable Dallas-Fort Worth residential market over the past few years — in slight but steady decline in terms of sales, but with prices holding up better than in most national markets.
In fact, average sales prices even rose in the Park Cities in 2007, up 5 percent in Highland Park to $2.13 million and up 15 percent in University Park to $1.38 million. Both neighborhoods are on pace to maintain those levels in 2008.
But the countrywide downturn had also slowed activity in North Texas by the summer, and agents looked for any good news.
“People were looking for deals, even those folks who could previously afford living in the Park Cities,” said Jeff Duffey, an agent who runs Jeff Duffey Associates. “They’re looking just below the $600,000 to $800,000 entry-level price, or they were waiting on prices to come down. Which is smart. Because I would show something at $1.2 million, and eight months later, it would be at $920,000.
“No one is insulated from the downturn. Not even the rich,” Duffey said.
According to statistics from North Texas Real Estate Information Systems and Texas A&M University’s Real Estate Center, high-end home sales in Dallas proper have finally slumped after rising for most of this decade. Through August, sales of $1 million-plus homes were off 12 percent in Dallas-Fort Worth; sales of homes $800,000 to $1 million were down 25 percent.
In early October, there were about 1,500 new homes vacant in North Texas with prices at more than $500,000, according to MetroStudy Inc. In addition, there were nearly 1,500 million-dollar-plus homes listed in various real estate listing services.
“There’s definitely a trickle-up effect
happening in the Park Cities,” said Austin Kilgore, real estate editor of Park Cities People. “Many homeowners that may be interested in selling are biding their time because of the lack of qualified new buyers. Homeowners that must sell their homes are finding it increasingly difficult to move their properties, and that’s causing the local fluctuations in the market.”
The market gyrations and credit crunch have also made it harder for some to refurbish luxury homes they already own. Ray Balestri, who owns his own law firm, Balestri and Associates, had to scrap plans to undergo a $500,000 makeover of his kitchen in his multi-million-dollar home on the border of Highland Park and Turtle Creek.
“And I’m not getting that new car, and I’m not going to add on to my lake house,” Balestri said.
“Trust me, everyone is feeling the pinch.”
Like a lot of North Texas, though, the luxury market is seeing some signs of growth, primarily because the region had a much less significant fall in prices and sales than similar-sized markets on the East and West coasts. (In fact, Dallas-Fort Worth pre-owned home sales rose 2 percent in September, after more than a year of declines.)
“We take for granted how much stronger we are than most of the country,” said Chris Pyle, who works for the Ben Jones Group at Allie Beth Allman & Associates. Pyle is still seeing clients obtaining the $4 million and $5 million loans they need when buying in Highland Park. He’s also done $13 million and $8.6 million contracts recently. “Days on market have shot up, but folks are just waiting for better deals and better financing,” he said.
Of course, with talk of George W. and Laura Bush making their home in the Park Cities sometime next year, there are expectations of a high-end bump. Just like with AT&T.