(Photo by Rasy Ran)

(Photo by Rasy Ran)

Home values are skyrocketing in Lake Highlands. Some of us are making fast money. Others are being pushed out.

We’ve heard that a rising tide lifts all boats — but what about the little schooners toppled in the cresting waves? It’s an allegory that applies to the Lake Highlands real estate market: 10 years ago, million-dollar homes barely existed, but now they stud the neighborhood. At a time when housing prices have jumped 12 percent during the past year, properties once valued at $250,000 are now more likely to fetch $400,000-$500,000. That’s great news if you’re leaving or trading up. But what if you love it here and want to stay? Will the changing economics ruin a once-affordable neighborhood, driving away families unable to pay rising property taxes?

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Read ‘The Domino Effect’  about the impact on commercial realty sidebar here

The secret is out

Realtors have long called Lake Highlands the best-kept secret in Dallas. With its top-notch schools, proximity to White Rock Lake and strong sense of community, our neighborhood has been considered one of the best places in Dallas to start a family.

“Around $250,000 was average for a lot three to four years ago,” says Jason Thomas, a neighbor who has been selling real estate in Lake Highlands for 10 years, most recently with Nathan Grace Real Estate.

“Now it’s just about impossible to find anything under $400,000.”

With land values skyrocketing, the only thing seemingly going down is demand for the modest single-family tract homes that cropped up all over northeast Dallas during the housing boom in the 1960s and ’70s. Area Realtors say buyers now want sleekly modern touches such as expansive closets and energy-efficient appliances, often with a vintage design twist — think of the shabby-chic home touches that are all the rage on Pinterest and HGTV, from reclaimed wood floors to farm sinks in the kitchen.

There’s a new type of buyer in town, one that previously would have gone to Lakewood or the Park Cities.

“Briggs Freeman is a luxury real estate firm, and the fact that we’re paying close attention to Lake Highlands says something. Five years ago, that wasn’t the case,” says Melissa Touris, a Lake Highlands resident who has worked with Briggs Freeman Sotheby’s International Realty for five years.

Developers have figured out that buyers will pay a premium for a customized dream home, so the hunt is largely focused on lots over houses.

Take the recent sale of 10111 Rustleleaf Drive, where the five-bedroom home built in 1972 was likely seen as an inconvenience to the acre of land it sat upon. Lots that large are hard to come buy in Dallas, and developers see dollar signs when they hit the market.

The property was listed for $995,000 and snatched up in 33 days. Realtors predict the property will be broken into several lots, each containing $500,000-$600,000 homes, creating a healthy profit margin for whoever develops it.

At a time when developers will spend $400,000 for a property, only to spend hundreds of thousands more knocking down and replacing the home, it’s no surprise prices are nudging seven figures.

“No longer can you buy a home for $145,000-$200,000, tear it down and still be under $1 million,” says Ebby Halliday Realtors’ Jan Stell, who has 33 years of real estate experience in Lake Highlands and lives in the neighborhood herself.

10 priciest pads
on the Lake highlands market

$1,700,000
46 N Vanguard Way
3 beds, 3.5 baths
3,258 sq. ft.

$1,299,900
60 Vanguard way
5 beds, 5.5 baths
4,500 sq. ft.


$950,000
8580 Abrams Rd.
5 beds, 3 baths+2 half-baths
7,606 sq. ft.

$949,000
9526 Chiswell Rd.
4 beds, 2.5 baths
3,096 sq. ft.

$915,000
9235 Royalpine Dr.
5 beds, 4 baths+2 half-baths
3,970 sq. ft.


$885,000
14 Vanguard Way
3 beds, 3 baths
3,008 sq. ft.

$850,000
10024 Milltrail Dr.
5 beds, 3 baths+2 half-baths
3,763 sq. ft.

$849,000
9031 Woodhurst Dr.
4 beds, 3.5 baths
3,403 sq. ft.

$825,000
17 Vanguard Way
3 beds, 2.5 baths
2,700 sq. ft.

$799,000
9506 Trail Hill Dr.
4 beds, 4.5 baths
4,510 sq. ft.

There goes the neighborhood?

The market seems to take as much as it gives, in some neighbors’ eyes.

Is the rising market boosting owners’ equity in homes? Yes. Do increasing home values encourage lower property tax bills? No.

And then there’s that x-factor that can’t be weighed or measured — the impact on our neighborhood’s character.

Pam James recalls moving into her home just east of White Rock Lake 24 years ago. The modest three-bedroom, one-bathroom tract home built in 1953 looked much like all the other houses on the block.

“The aesthetics of the neighborhood changed over the years, but not as drastically as the last two years,” James says. “There is this impression with the new generation that if it’s old, it’s not worth a damn.”

James knew she was sitting on 8,800 square feet of land whose value was continuing to climb, but she didn’t get the full scope of the picture until she saw her property tax bill. In 2015, the Dallas Central Appraisal District valued her land at $88,070; the very next year, the appraised value was $211,370, a 140 percent spike.

It’s likely a sign the land was previously undervalued by the county, but it was a jump any homeowner would notice.

“I couldn’t believe it,” James says. “Did I put some gold-flaked grass on this property? What happened?”

While Texas caps hikes in property taxes paid by homeowners at 10 percent each year, the rising tax bills add up quickly when prices are soaring. And James isn’t the only one who found herself becoming priced out of the neighborhood.

“It’s getting so volatile,” James says. “Many feel powerless in the face of the new people moving in.”

Sick of the changing character of the neighborhood and wanting additional room for her husband’s mechanics shop, the couple decided to cash in their little gem on Classen Drive and buy a bigger plot in St. Paul, Texas. But James says she didn’t want their Lake Highlands Estate home going to just anyone.

“I don’t know any human being who doesn’t feel some sort of attachment to their house, especially after 24 years there,” she says.

She didn’t want the house she loved so much to be torn down and replaced “by a McMansion.” She also says she didn’t want to share any of the profits with a Realtor, so she first attempted to sell the home herself by posting ads using an unusual pitch.

“No investors. Homestead buyer interest only,” her ads read. “Understand this is a highly desired area to live in; there are few houses for sale in this price range in this neighborhood. A new owner can make this an adorable home to live in for a long time without destroying its original integrity.”

James says she wanted to send a message: She wanted to sell her home to a family that would love and cherish the space as she had. It was an unusual tactic that ultimately didn’t work. Her home is in Old Lake Highlands, outside the desirable Richardson Independent School District boundaries, meaning lower prices and a smaller pool of buyers, she says. After months on the market, she gave up and found a Realtor who sold the home to a buyer whose intent is unclear.

“I don’t know if he’ll tear it down,” she says wistfully.

Unlike James, many local Realtors don’t believe the face of the neighborhood is changing — Lake Highlands always has been, and always will be, a place for families. In fact, it’s just that tight-knit sense of community James loved that brings buyers here.

Thomas says his clients are drawn to the “front porch community” where they know their neighbors, where their kids can find playmates down the street and where people say hello to each other in the grocery store. Although existing homes are being replaced by larger, more modern options, the neighborhood character remains.

“The motto is a small town in a big city,” Touris says. “That’s what most people want when they move to Lake Highlands.”

James agrees the neighborhood is still popular with families, but that doesn’t change the fact that some long-time residents are finding themselves unable to keep up with the rising costs. She understands the desire to make a profit, as she herself just did, but she still worries about the long-term implications.

“Is this a good thing or is this a bad thing? I think it’s both. It just depends on who you are,” she says. “The ones who are going to benefit are the ones who can afford the taxes.”

Who’s buying?

There’s no question that the metroplex is hot right now, with the North Texas suburbs growing at a staggering one person every five minutes (that’s 2,016 a week) according to Ebby Halliday Realtors. As more and more Fortune 500 companies like Toyota and State Farm relocate to the Dallas area, they bring waves of new residents looking to snatch their own piece of Texas real estate. However, neighborhood Realtors say they make up only a small percentage of the buyers who are targeting Lake Highlands.

“Most are coming from somewhere else in Dallas,” Thomas says. “They’re usually young families looking for good schools.”

Stell says she has seen a number of buyers relocate from the Park Cities, looking for more land and a turn-key-ready home high on features and low on maintenance.

“There are buyers right in Lake Highlands who want to leave their ranch-style home and have a home with tall ceilings, an open floor plan, large closets and all the amenities,” Stell says.

Many buyers also have a tie to the neighborhood — either they grew up here themselves or have a relative living in the area. Very few people moving from outside the area have ever heard of our neighborhood.

“Lake Highlands is off the radar. People have heard of Lakewood, but only people in Dallas know Lake Highlands,” Touris says.

Can we be the new Lakewood?

Just before the recession cooled the market 10 years ago, Lakewood was in a boom. Houses were snapped up days after they hit the market, driving up prices and causing bidding wars.

Meanwhile, in Lake Highlands, things remained pretty status quo.

But when buyers found themselves priced out of Lakewood, they still wanted proximity to White Rock Lake so they started looking north. Between 2005-06, the price per square foot jumped from $119.94 to $128.98, a statistically significant 7 percent that trumped the growth in many other Dallas neighborhoods at the time. It was a turning point, causing a steady uptick that reached an average price per square foot of $155 in May 2016, up 6 percent from a year earlier.

“Maybe we’re just four or five years behind Lakewood,” Thomas says.

But like Lakewood, Lake Highlands has pockets popping up that set their own staggeringly high price points. Take the ultra-modern Urban Reserve built near White Rock Creek by Urban Edge Developers, where the price per square foot averages $250-$310.

“Even six months ago, you could buy in Urban Reserve for a lot less,” Touris says.

Recently, some buyers have preferred Lake Highlands to our better-known neighbor to the south, thanks largely to the larger average lot size and the fact that Richardson Independent School District trumps Dallas Independent School District in most educational rankings.

“The schools are the number one driver for buyers,” Stell says.

One major difference between the two lakeside neighborhoods is the reverence for history. While some parts of Lakewood have been locking down their neighborhoods with historic preservation districts, which dictate what changes homeowners can make on their properties in an effort to preserve the character of the original architecture, Lake Highlands has not, likely because there are fewer architectural darlings neighbors are hounding to protect.

“As 1960s buildings are now eligible for historic status, it’s quite possible that some of the 1950s to 1960s development up there could be a historic district,” says David Preziosi, executive director of Preservation Dallas.

“More likely, though, is them becoming a conservation district if the neighborhood so chooses. I haven’t heard anything about any Lake Highlands neighborhoods wanting to do either.”

The other obvious difference is the lack of commercial options in our neighborhood. We have relatively fewer neighborhood watering holes and restaurants. But Realtors say that’s part of the charm. Our streets are lined with mature trees and have the look and feel of a suburb without leaving the loop. We’re only minutes away from many of Dallas’ foodie and party havens, but we don’t have to live with the headaches they bring.

“You can’t really walk to a restaurant easily,” Stell says. “But the traffic is much more manageable.”

That, too, seems about to change.