Pink Wall: Potential or a Just Nice, Reasonably-Priced Place to Live? Or Both?

Poking around the MLS (as you do) I was more than slightly surprised to find opportunity in my own backyard.  Lord knows I’ve written enough about the Pink Wall as part of CandysDirt.com’s coverage of the Preston Center Task Force, and certainly I’m aware of the neighborhood outside my windows.  However it took looking at current property values in Oaklawn where I’d been living pre-Pink for the penny to drop.

Homes and condos in Oaklawn, West Village, and Uptown that I wouldn’t have touched just a few years ago at less than $100 per square foot have now more than doubled. Area-wise, I’m talking about aging buildings between the tollway and Maple or north Oaklawn or Turtle Creek to McKinney. Often they’re sandwiched between McDevelopments and may even be in the path of said, often flimsy, apartment blocks. For many reasons outside development potential, these areas have shot up in value post-recession. Take your pick … close to the city core, light rail, UT Southwestern’s expansion that changed Motor Street to Medical District Drive.

The Pink Wall?  Not so much.

Today, several years into our hard-charging market, Pink Wall palaces are a relative bargain, priced almost exclusively sub-$200 per square foot … for fully renovated properties. Unrenovated granny flats can be easily had a lot closer to $100 per foot. The Athena and Preston Tower high-rises are in a similar ballpark. On the upside, exceptional units push past $200 per foot. The HOA dues run the gamut, but nearly all include utilities. Where else in Dallas is there a similar hideaway neighborhood sandwiched between chichi areas like Park Cities and Preston Hollow with this kind of pricing? None that I know of.

Why?

I think there are several reasons. Unlike its neighbors, the Pink Wall has not kept pace with its surroundings. Complex exteriors are dated and in desperate need of refreshing, and in some cases maintenance. What was once a pricey location hasn’t kept up.  Speaking with neighbors, some have said they were surprised they could so easily afford to live here.  Their reference point was of the area’s more glamorous and expensive past.

Another reason might be the size of many of the condos in the area. They’re huge. And so while the cost per square foot is low, there are a lot of square feet to buy. I’m not sure I’ve ever seen a unit at the Imperial House that was under 2,000 square feet … 1,300 to 1,400 square feet in this area is considered almost small. Compare this to one-bedroom units in Oaklawn that are typically half the size but can cost the same.

Both these facts are important because the area’s original intent was to attract downsizers from the surrounding mansions who didn’t want to mow the lawn nor move away.  When these condos were more financially in line with the neighborhood’s expectations it was a more natural progression.

Today, that equation is broken because the Pink Wall didn’t (couldn’t?) keep pace as Park Cities and Preston Hollow morphed from multi-income areas to exclusive luxury.  The Pink Wall found the resulting economic gulf too wide to cross.  Residents in nearby multi-million dollar homes are not looking to downsize to a $200,000 to $400,000 condo. They’re off to Turtle Creek and Uptown, if they move at all.

Many former Park Cities and Preston Hollow residents who turned Pink Wallers have been in the area for decades (back when the equation worked). What new blood I see comes from parts of Dallas whose economics make a purchase in this area’s price range more logical. The low price points also attract a fair bit of investment/rental activity in the area.

Why Live Here?

This may all sound like a bit of buyer’s remorse whinging, but it’s not. Since when have the terms “location,” “big,” and “cheap” been bad things in real estate? In fact, don’t they represent the real estate trifecta?

For the same confluence of criteria, Oaklawn, Oak Cliff, M-Streets, etc. experienced a renaissance.  One of the other components was their ability to attract childless buyers on a budget who didn’t care about schools.  They were able to divert resources to renovation (pre/post children and gays).  The Design District isn’t hot today because of its schools.

The reason for these neighborhoods’ long term success is that pioneering residents, buoyed by their hard work, stayed.  They grew into a new neighborhood by the shared experience of bootstrapping it. Sweat equity is a powerful adhesive.  The neighbors I speak most with are those who have undertaken some renovation of their own; the beginnings of common ground.

Another reason to become a Pink Waller is Preston Center.  Despite my ever-deepening skepticism about the methodology and cronyism enmeshed in the Preston Center Task Force, development is coming … quickly.  If the Preston Center garage is submerged and turned into a town square as part of its expansion, the whole area benefits.  Depending on the path of development, Pink Wall residents will have more nearby amenities (restaurants) and hopefully competing residential that will raise all boats.

Of course the Pink Wall can’t play Blanche duBois relying on the kindness of strangers.  It needs some high-profile redevelopment and curb-appeal refreshing too.  Think a Carlo’s Bakery kind of residential development that buyers line up for only to be frustrated by the crowds before giving up and heading across the street for a (dry) Sprinkles cupcake.  Unfortunately, deed restrictions mean near-term development is doubtful for much of the area (residents would need to vote to remove them). But nothing is stopping area complexes from getting the same type of face lift many residents have partaken in.

Thankfully, the currently under construction Laurel apartments being built on the corner of Northwest Highway and Preston Road did not suffer from the deed restrictions.  As contentious as the project was, it’ll present a HELL of a lot better “front door” to the Pink Wall than the corrugated steel-clad dinge, better known as a place to score than live, that previously occupied the corner.

My Rules

• DON’T go Pink if you’re a developer looking for a quick buck, unless you’re moneyed enough to buy enough complexes to extinguish the deed restrictions.
• DO go Pink if you’re a flipper. There are more move-in-ready buyers than renovators.  Flippers bring “new” product to market attracting new blood to the area.
• DON’T go Pink if you’re an individual investor pinning your hopes on a get-rich-quick buyout.
• DO go Pink if you’re looking for a quaint neighborhood in a good location.
• DO go Pink if you want a lot of space.
• DO go Pink if you’re a renovator or looking for a project at reasonable prices
• DON’T go Pink if you’re frustrated by glacially changing attitudes.
• DO go Pink because youthful attitudes are the key to enhancing the area. Actuarial tables are on your side.

DON’T EVER go Pink (or anywhere else) before doing your homework.  Several complexes are teetering on the brink of financial disaster resulting from years of neglect and spiraling costs.  In a complex containing a dozen or two units, hundreds of thousands of dollars in needed repairs equates to one very large special assessment. Larger complexes are not immune, they just have more units to spread any damaging costs over.  In addition to pouring over a complex’s financials, have your home inspector inspect the overall building. It may cost more, but you’ll sleep better.

In the end, there may be an uphill battle for development behind the Pink Wall, but that doesn’t make it a bad place to live or eke out a profit as a flipper. Remember big and cheap in a great location are the stuff real estate dreams are made of.

 

Remember:  Do you have an HOA story to tell?  A little high-rise history? Realtors, want to feature a listing in need of renovation or one that’s complete with flying colors?  How about hosting a Candy’s Dirt Staff Meeting?  Shoot Jon an email.  Marriage proposals accepted (they’re legal)!  [email protected]