Expert Realtors representing Lake Highlands, the Park Cities, Preston Hollow, and Lakewood talked shop Thursday about building and design trends — and a staggering lack of inventory — in a post-pandemic market.
A star-studded panel including luxury real estate agents shared thoughts on what buyers want and what builders ought to be doing at Thursday’s Dallas Division luncheon hosted by Dallas Builders Association.
Realtors Amy Timmerman of Dave Perry-Miller Real Estate, Alex Perry of Allie Beth Allman & Associates, and Scott Jackson of Compass served as panelists with lender Steve Puckett of Prosperity Bank. Realtor Joe Atkins moderated the discussion.
“My biggest challenge on a regular basis is educating buyers on what rates are, where they’ve been, and where they’re going,” Puckett said. “Nobody really knows for sure. It’s all conjecture and looking at data. Data changes and you can look at different data sets. When are rates going back to 4 [percent]? I don’t know. We’ve always looked at these deals on an individual basis. We’re still making loans.”
Luxury Real Estate Agents: There’s a Serious Inventory Issue
Coming out of the pandemic, buyers got whatever they could, Atkins said.
“The market was going up, on average 1.5 percent per month for about 18 months,” he said to the panel. “Now fast-forward and we’re in a different market. With spec homes, especially on the higher end, are you seeing buyers take a step back? Are they being more picky? Are they negotiating harder on certain items?”
Jackson responded that last August, as talk of a recession was mounting, builders moved into a mode of protection. They were nervous to make big investments. The problem now, he said, is a lack of inventory.
“In Lakewood, where there are about 5,000 homes, there are 10 homes on the market today,” he said. “There are four existing homes where you can move in today, out of 5,000. That tells you we’ve got a serious inventory issue.”
What could be built in a year now takes about two years at the luxury level, Perry added, explaining that a builder’s ability to pre-sell depends on their individual risk tolerance.
Those gathered at Thursday’s luncheon said the elimination of Dallas’ building permit backlog and the city’s same-day permitting program will bring back some builders who left the city because it was too hard to do business.
The demand for inventory also is on the uptick as Goldman Sachs announced in June it’s building an 800,000-square-foot office tower between Victory Park and Uptown. That means up to 7,000 people are coming to Dallas, and they need a place to live, Realtors said Thursday.
Atkins said he put a luxury Lakewood home up for sale about a year ago.
“Six of the 11 offers were from Goldman Sachs people,” he said. “That blew my mind. That told me Goldman’s a real player as far as people needing houses.”
What’s Trending Now?
Atkins asked the experts what homebuyers want post-COVID.
“Coming out of COVID, the big thing we talked about was work from home, workspace, pools, larger kitchens,” he said. “Everybody was spending all this time at home. Now we’re getting back to normalcy. Builders need to know what buyers are wanting.”
Timmerman, who sells homes primarily in Lake Highlands, said the area has historically had a lot of renovations but has recently been “discovered” by builders and buyers.
“We’ve had a lot of specs going up in the neighborhood, and I’ve tried to advise our builders on what buyers are looking for,” she said. “The home office is a big thing. Lake Highlands leans more traditional in style. Those timeless homes are making a really big comeback in our market.”
Jackson said buyers want lower maintenance, a private study, security, and energy efficiency. A spec home starts at about $2 million on a 60-foot lot for about 7,500 square feet in Lakewood, he said.
“Now that number is going up,” Jackson said. “For something bigger, we’re looking at $3.5 million. That person is desiring something more architecturally significant for that money. They want something a little more interesting. Mimicking some of the historic structures is not a bad idea.”
Lakewood is undergoing the process of expanding its conservation district by about 700 homes, Jackson explained.
“If you were buying a lot in that area, you would want to know that the deed restrictions are about to change,” he said. “We have in East Dallas the most conservation districts and overlays than anywhere in town.”
Perry added that great elevations, design, and floor plans are more important now than ever.
“The best appraisers will tell you they still appraise by location, functionality, and style,” he said.
The Dallas Builders Association’s next big event is a March 2 State of the Industry Summit in Addison.
