DALLAS — Read this story and more North Texas business news from our partners at the Dallas Business Journal
Despite elevated mortgage rates and a somewhat cloudy residential real estate picture, the market for lake homes remains hot in North Texas — sultry weather aside.
That's partly because, while the average interest rate continues to hover near 7% for a 30-year mortgage, many lakeside buyers are paying cash for what is likely a vacation home, said Rogers Healy, a longtime North Texas broker and real estate entrepreneur.
And if they are borrowing money, buyers are often putting down 20% to 30%.
"People that have that kind of disposable income, I don't think interest rates are going to affect an emotional decision," Healy said.
That's good news for property owners along the many lakes in the Dallas-Fort Worth region, as well as the agents who represent them. DFW is home to some of the state's biggest lake real estate markets.
Lewisville Lake ranked No. 2 overall with a total real estate value of $830.3 million as of May, including both homes and undeveloped land, according to the latest report from brokerage Lake Homes Realty LLC. That was up 7.8% from the spring, Alabama-based Lake Homes Realty calculated using multiple listing service data.
Lewisville Lake, located in Denton County about 25 miles north of Dallas on the Elm Fork of the Trinity River, had 1,126 homes available in May, which ranked No. 2 out of 31 states studied by Lake Homes Realty. And its average price per acre of $133,891 for properties of at least 10 acres was also second in the country.
Some of the other large markets in North Texas included Cedar Creek Lake about an hour southeast of Dallas, which had a total value of $552.9 million (up 5.2%), and Lake Ray Hubbard east of Dallas with a total value of $518.9 million (up 4.9%).
10 largest lake real estate markets in Texas, according to Lake Homes Realty:
- Lake Travis (Austin area), $967,152,424 total value, up 9.2% from spring
- Lewisville Lake $830,336,114, 7.8%
- Lake LBJ (Austin area), $778,407,555, 7.3%
- Lake Austin (Austin area), $741,490,116, 7.1%
- Lady Bird Lake (Austin area), $560,909,853, 5.3%
- Cedar Creek Lake, $552,939,183, 5.2%
- Lake Ray Hubbard, $518,888,677, 4.9%
- Canyon Lake (San Antonio area), $463,665,160, 4.4%
- Lake Conroe (Houston area), $442,567,343, 4.2%
- Grapevine Lake (Dallas area), $407,235,113, 3.9%
The Lake Homes Realty report also offers some data on the most affordable lake markets. Near DFW, those were Swan Lake and Holly Lake Ranch near Tyler with an average price of $37,800 per acre and $42,448 per acre, respectively.
Looking ahead, Lake Homes Realty CEO Glenn Phillips expects sales of lake properties, including undeveloped lots, to increase 14-18% in 2024 compared with 2023, he wrote in his company's report. He's revised his estimates upward in the past few months.
"Demand remains very strong, but the still relatively limited number of properties for sale continues to limit deal flow," Phillips wrote.
New lake developments in DFW have increased competition but Healy said agents are still seeing consistent demand with hardly any price reductions. The "sweet spot" for lakefront homes is between $2 million and $5 million, he said.
"There’s still enough demand that they can justify retail pricing for second homes, where usually when a real estate market adjusts, the markets that get hit the quickest are second homes and bedroom condos," said Healy, founder and CEO of The Rogers Healy Cos.
Part of the increase in lakefront real estate value is likely seasonal, he noted. Prices jump when the temperature rises.
In DFW, the average price for a waterfront home is $1.3 million, according to DFW Urban Realty.
North Texas' robust population growth means the many newcomers, especially those relocating for high-paying jobs, provide a steady supply of new buyers looking for relaxation and recreation not too far from their primary residences.
"The need and the desire for second homes within an hour and a half of downtown Dallas will always be there," Healy said.
