White Rock Lake Case Study
The estate lots and historic homes located at White Rock Lake provide an interesting case study of a niche neighborhood that was grossly undervalued. The location, attributes of the sites overlooking the lake, and the limited potential number of properties available created far more value than what was easily recognized. There were many reasons the homes and the 2- to 5-acre lots were undervalued by the real estate community and potential buyers.
White Rock Lake is the largest urban man-made lake in the country. It is found in an East Dallas neighborhood next to Lakewood, about five miles from downtown and a few miles east of Highland Park. Several decades ago, all of the Old East Dallas neighborhoods went through a cycle of decline. Lakewood was one of the few neighborhoods that kept its homeowner base including third generation families. Most of the home sales in Lakewood were rather insulated, with most homes selling to other residents of Lakewood. White Rock Lake was one of the best-known areas in Dallas, as it was the only substantial lake in the city but it, too, went through a period of decay and deterioration. It became more associated with fraternity keggers and motorcycle groups riding around the lake that needed to be dredged rather than a beautiful backdrop for homes. When I was asked to sell a 4-acre property and a small 3,600 square feet historic home for a prominent family, I quickly recognized there was another obstacle. The Lakewood realtors who handled most of the sales in the Lakewood area adjacent to White Rock Lake would join the Lakewood homeowners at the Lakewood Country Club and agree that the acreage price of land on West Lawther Drive at White Rock Lake should be less than $1 million per acre. They said that is how much land sold for before and so that is what it is worth.
Another challenge was White Rock Lake was nine miles around, so it created an illusion of a large residential area. There were also several vacant 2- and 3-acre lots that had been for sale on and off for years, indicating a lack of demand and an oversupply of lots. In addition to vacant estate lots, the homes on West Lawther Drive overlooking White Rock Lake were relatively small houses – 3,000 square feet to 4,000 square feet. Historic homes across the city were being torn down on 0.25-acre lots, so it did not seem older homes would have much value on a 2.5-acre lot that had ten times as much land.
This is how I approached selling this 3,600 square foot 1920s home on 4 acres and subsequently selling 10 other homes for two or three times the price that land had sold for just a few years earlier.
- Redefine the White Rock Lake neighborhood and its attributes.
- Identify the 14 homes that make up a specific niche estate neighborhood at White Rock Lake.
- Define and name this niche neighborhood as the “Estate Cove of White Rock Lake.”
- Create a White Rock Lake video, not of the home for sale, but of White Rock Lake, with the theme that this was the best-known area of Dallas and the best kept secret.
- Market White Rock Lake and its homes to buyers across Dallas and the Park Cities and other parts of the country, not just to the pool of Lakewood homeowners who were considered the prime potential buyers.
- Rather than comparing land prices to Lakewood sales, compare the positive attributes and value of the White Rock Lake estate properties with large estate properties in other parts of Dallas, like the estate areas of Preston Hollow and Bluffview.
- Take an inventory of all the multiple acre lots in Dallas to demonstrate how few would be available even if every large estate lot or estate home were for sale.
- Illuminate the value of both the site and the existing historic home, recognizing that many potential buyers are more interested in the beautiful land and view and the graceful site for the home than just having a large new home that they could find anywhere in Dallas.
My instincts were correct. I contacted a sophisticated Highland Park homeowner who purchased and beautifully renovated this historic home and landscaped the acreage that resulted in landscape awards. Like many of the original homes at White Rock Lake that were built as summer homes just a few miles of unpaved roads away from downtown Dallas, this buyer renovated the home for a weekend home. The home was a fabulous retreat just 20 minutes from their Highland Park home, not 90 minutes or two hours away from one of the popular Texas lakes.
The more I became involved with selling properties on White Rock Lake, the better I understood the value of these properties that I was able to successfully convey to buyers that came from Highland Park, University Park, Lake Highlands and from out of town. While initially Lakewood buyers were too close to the forest to see the trees, buyers from other neighborhoods and states saw the unequaled benefit and attraction of living on White Rock Lake.
Prejudices that were formed over decades and were still lingering became erased by the ongoing improvements to White Rock Lake that had been dredged, new bike paths installed, and other improvements that made White Rock Lake an urban paradise. The trend was totally in favor of the buyers even as I was able to sell White Rock Lake homes and properties at prices 50% higher than the prices Lakewood Realtors were telling their clients these properties were worth. Once several properties had sold and the majority of the vacant lots had sold, there was a pool of 20 to 30 buyers and no lots or homes for sale. As a result, when Lakewood homeowners who had rejected properties as too high-priced several years ago, are now paying three times as much for a property that they had an opportunity to buy earlier at the much lower price.
Discuss Representation of an Architecturally Significant Home with Douglas Newby
