They say a classic never goes out of style. Changing trends in the luxury market are testing whether that’s the case.
With the luxury market slowing, especially across the Sun Belt, some agents say homes with historic designations or architectural significance can hold value more steadily.
“Buying a home in a historic district, you are actually hedging against market swings. They tend to perform better longer-term,” said Douglas Elliman agent Emily Waldmann, who works in Austin.
Nationally, luxury homes are taking about a week longer to sell compared to last year, according to Redfin. Luxury is appreciating faster than non-luxury, possibly due to lending trends that don’t affect cash buyers, but luxury sales are near the lowest levels on record for Redfin.
Austin has gone through some of the most radical market changes in the state, booming in 2020 and 2021 before contracting to a buyer’s market this year.
For Austinites looking for a sure thing, Victorians or mid-century moderns “are definitely more of a premium,” Waldmann said.
“You can buy a new construction home built in the last three years at any point in the market. But if that home that’s been around for a hundred years finally hits the market, and this is your one chance before it switches ownership for another 30 years, you’re more likely to swing the bat,” Waldmann said.
Non-historic luxury homes rise and fall more with the market, according to Robert Searcy, a Houston agent who specializes in historic and architecturally significant properties.
“Good markets, bad markets, supply and demand has always got to rule the day, and there’s always got to be an audience for the more historically significant houses, the more architecturally interesting houses,” Searcy said.
Owing to a generally steady flow of businesses moving to Dallas, North Texas’ luxury market hasn’t sagged as much as Austin’s. However, luxury sales have still declined 4 percent year over year in Dallas, according to Redfin.
Allie Beth Allman agent Michael Humphries said historic luxury inventory can “maintain value,” but it generally trails new builds.
“There’s a lot of times when the dirt outweighs what the value is worth to redo it, and it makes more sense to tear them down. That’s what we’re seeing a lot of in these areas,” Humphries said, mentioning Preston Hollow, Park Cities and the M Streets.
Dallas “takes the cake” on historic teardowns, according to Humphries.
“There’s more wealth here in Dallas than there is in other major markets in Texas,” Humphries said.
Mary Alice Garrison, another Allie Beth Allman agent who often sells in Dallas historic districts, said Victorian or architecturally significant homes without historic protection are frequently razed in desirable neighborhoods like Highland Park.
“Highland Park is kind of notorious for that,” Garrison said.
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