Demand for high-end dirt in Texas was quite robust in 2015, according to the just-released 2016 Texas Luxury Home Sales Report from the Texas Association of Realtors. Dallas luxury home sales and Fort Worth high-end real estate sales grew by 12.4 percent from January to October 2015, with 1,088 homes priced at $1 million or more selling during the period.
“Texas’ economic prosperity continues to make luxury home sales one of the strongest sectors of the Texas housing market, particularly in the $1 million to $1.5 million range,” said Leslie Rouda Smith, luxury Realtor with Dave Perry-Miller Real Estate and chairman of the Texas Association of Realtors. “In some neighborhoods, the lot alone is well worth $1 million and up.”
Ain’t that the truth! Dallas dirt is getting tremendously expensive, especially in the custom homebuilding market. Buyers and clients should expect the lot purchase to take up a greater share of the budget from now on as land is growing more scarce.
In North Texas, the median home price for a luxury property is $1.4 million — the highest among the state’s urban areas — and while high-end homes are notorious for languishing on the market for long periods, it only took 37 more days for a luxury home in the region to sell compared to a typical home.
As far as purchasing trends go, more and more homebuyers are buying smaller luxury properties in more desirable areas (think: those cute little cottages lining Lovers Lane in University Park) with all of the trappings of larger, more opulent homes.
“Rising land and development costs are changing what today’s luxury market looks like, and many developers are now entering the high-end custom homebuilding market due to more expensive lot costs,” said Jim Gaines, Ph.D., economist at the Real Estate Center at Texas A&M University. “Rising home prices across the state are also pushing more higher-end homes into the luxury market. Many homes priced in the $800,000 – $900,000 range a few years ago will now sell for more than a million.”
Statewide numbers show Austin posting a 16.3 percent increase in luxury home sales volume during 2015, with luxury homes making up more than 2 percent of the market’s total volume. In San Antonio, the luxury market saw a whopping 36.4 increase in sales volume from the prior year. And in Houston, luxury sales volume increased just 4.5 percent from 2014, but high-end homes sat on the market just 29 days longer than typical homes.
Of course, we know that a lot of luxury sales take place off of MLS, and unfortunately, those hip-pocket transactions aren’t included in these numbers. One only has to wonder what the sale of Walnut Place here in Dallas would do to the luxury home sales figures for our region if it had not been pulled from MLS before Andy Beal snatched it up.