Recently I wrote about how construction since the Recession has not kept pace with population increases and household formations leaving the nation with millions fewer homes than it needs, which has driven up prices. Because construction isn’t keeping up the supply end of things, people are staying in their homes longer – especially older people.
You see, the real estate market is a “circle of life” industry whereby the young start out small and move their way up until the kids are gone and they’re older, at which point they downsize to lower-maintenance properties. This makes room for the next generation to move up to the next level.
According to FreddieMac, 1.6 million senior-owned homes are not shuffling along the real estate conveyor belt to make way for a new generation. That’s essentially a typical year’s worth of new construction and over half the estimated 2.5 million home deficit the country struggles with due to over a decade of underbuilding.
The hot term is “aging in place” and I see the appeal of living independently – just maybe not in an oversized house I can’t take care of. Of course part of the reason those 1.6 million senior homeowners aren’t moving is because there’s nowhere to move. It’s not like the construction industry was building retirement facilities instead of homes for the past decade. There’s not a ton of empty Shady Pines and Gossamer Meadows out there gathering dust.
And that’s not all.
Blueprint of remodeled Claridge 18-A-unit
I’d sketched enough plans to feel comfortable taking the Penthouse Plunge remodel of a double-penthouse at the Claridge on Turtle Creek. To review, I’ll be restoring the combined 5,311-square-foot unit back into two infinitely more livable spaces. But my work isn’t good enough for building permits. That’s the subject of this column – getting to permit phase.
Before you begin a major renovation, you need to know what you’re doing – and not just in your head. So you’ll need blueprints prepared by a professional, and not just to get errant thoughts on paper. First of all, major renovations – especially those in multi-family complexes – will need building permits. The governing HOA will want to know that the work is being inspected by professionals and that plans meet code requirements. With few exceptions, HOAs are not comprised of people in the construction trades.
The second reason for blueprints is to get accurate quotes from tradespeople and contractors. It will also help spec out what things you’ll need to buy – toilets, drawer pulls, tile, etc.
But how do you find the right resources to draw up your plans? That’s where it gets interesting.
I’m the soon-to-be the owner of a 5,311-square-foot penthouse on Turtle Creek that I don’t want and can’t afford. Now what?
As I hinted in my first Penthouse Plunge column, the plan is to separate the condo back into two units as it was originally designed. I foresee three phases.
Phase one will include all demolition and the construction of any new walls – including putting up the wall to separate the A and B units (physically as well as legally). The floors will also be repaired and refinished.
After all that dusty stuff is done, I will move into the serviceable B side while the rest of the A Unit is renovated and sold. After the A unit sale, I’ll recast my mortgage to something less breathtaking. From there, I’ll slow-poke the B unit renovation as funds become available. A small mortgage is better than an immediately fancy home – at least to me.
Follow the renovation as it unfolds (later this week you’ll read about how I found an architect). All the workers and suppliers know that, for good or bad, all will be laid bare in these pages. There will be no fake “Oh no!” cliffhangers before the commercial break – only real “Oh no!” and “Yippie!” moments here. And parties, of course …
I’ve written about new developments in the Oak Lawn and Preston Hollow areas for a few years. Many of you have read about the PD-15 antics with the same hoary relish you watch a reality show. But as Dallas grows, and development reaches into more neighborhoods, there are lessons to be learned once you cut through the caustic tomfoolery.
By-Right vs. Zoning Cases
There are two kinds of developments – by-right and those requiring a zoning case. In a by-right situation, there’s not a lot you can do, it’s as it says on the tin, by right. A building permit is filed and they’re off to the races.
Construction requiring a zoning case is where the action is at. Whether large or small, any variance to a property’s underlying zoning requires the approval of that exception. Those cases are filed at City Hall and are then publicized in the immediate neighborhood – typically within 500 feet of the edges of the property filing the case. Those cases are taken up by and require approval from the City Plan Commission and the City Council. Between all that is the community wooing.
And if you’re going to be wooed by developers, there are some things you should know.
Unless you’ve been on a “cut the cord” vacation, you’ve seen last week’s headlines warning that an inversion in the bond market has folks worried we’ll be entering a recession soon. About a third of economists think we’re likely on that road. Remembering the Great Recession, should we shun the real estate market?
As the New York Times points out, the last two big recessions occurred because something was in a bubble. In the early 2000s, it was the tech bubble and resulting crash made worse by September 11. The Great Recession began in the housing market that exposed shady lending and rippled into the global financial crisis.
At the moment there is no similar bubble out there. There are trade wars and tariffs. There are diplomacy stand-offs and a global rise in nationalism and populism that are fraying the stability of historic global ties. These governmental policy issues largely affect the business world and cause uncertainty which leads to conservative spending. Consumer spending is still chugging along fine.
But let’s say that business decides to pullback in a real way which starts the domino effect of lost jobs, lower wages that then do impact consumer spending (two-thirds of spending). Then we may see real estate prices impacted.
But again, learn from history.
6307 Bandera Ave. Unit 6307C
When this crossed my desk, I immediately liked this idea. Agents from multiple brokerages representing the (lucky) 13 properties got together and devised a simultaneous open house from 2 to 4 p.m. on Sunday, August 18. Think of it as a home tour, but you can actually buy the house you fall in love with. And the Pink Wall is compact enough that you don’t need fussy tickets or an afternoon of waiting for the next bus to show up.
And yes, one listing begins “Rarely available” with 12 other properties within a two-block radius and three in the same building. Another knows its unit’s catnip blaring “ONE PARKING SPACE & UTILITIES INCLUDED” as its opener (but I digress).
Twelve of the properties are contained in the plethora of two-story buildings that line tree-lined streets. The listings also showcase the neighborhood’s bread and butter of two-bedroom units. Some have two bathrooms, while others pick up the half bath for visitors. They range in price from $259,000 to $695,000 and from 1,130 to 2,659 square feet in size. Most are also under $200 per square foot.
If you’re smart, you’ll strap on your Keds and see them all, but here’s my short list.
If you’re looking for a Dallas high-rise home so you can get as far off the ground as possible, be prepared to shell out big bucks or live in close quarters.
In parts one and two, I outlined how Dallas has relatively few high-rise listings, and because of a lack of new high-rise construction, Dallas isn’t going to have a lot more buildings anytime soon. In this final installment, I break the 133 active units and 11 units under contract and analyze them by what floors they’re on.
The distribution under the 20th floor is fairly even between 21 and 29 units in each category. For those interested in units above the 20th floor, inventory drops off because a lot of high-rises are under that height overall. Once you’re into the 30s, you’re pretty much at Museum Tower, which might be out of your price range.
But even more than height, the most important buyer criteria revolves around the unit size and overall cost (mortgage, HOA dues, insurance, and taxes). A studio on the 20th floor doesn’t help someone looking for a two-bedroom unit.
As Dallas becomes more dense, high-rises should become the choice for more residents. The problem is that Dallas isn’t really building for-sale condo high-rises outside the ultra-luxury market. As noted in part one, there are currently just 133 high-rise condos on the market by my count – that’s it from $159,000 to $9.2 million. That’s not a lot of inventory.
The Stoneleigh, Ritz Residences, and Museum Tower may be where the money is, but it’s not where normal people are. As I’ve noted before, Dallas hasn’t built a big, mid-range high-rise in 20 years and it’s not because there isn’t a market. It’s because there is no financing.
And that’s different. When The Renaissance was built in 1998, it wasn’t luxury. Similarly, when 3883 Turtle Creek went up in 1963, it was planned as HUD housing. Preston Tower’s 362 units have always been affordable. All of those projects knew that cost containment came at scale. In addition to Preston Tower’s density, Renaissance has 603 units while 3883 Turtle Creek has 373. The closest in recent memory was the 75 units in The Cedars’ Beat lofts in 2007 – a relatively small project in a then transitional part of town.
I covered those condo buildings in that most-reasonable strata of high-rise living. Units ranged in price from the $150,000s to $700,000. In that range, you were almost certainly in the sub-2,000-square-foot range (perfectly fine for nearly everyone).
From here on out, it’s bonbons and champagne as we look at what you get when the sky’s the limit.