Recession woes penetrate Highland Park and University Park “bubble”

by Jana J. Martin of The Daily Mustang

After a busy week of carpooling and tennis matches, moms from the exclusive enclaves of Highland Park and University Park still have their cocktails at Mi Cocina in Highland Park Village. Kids are still outside playing basketball, and Friday night lights still shine at the Highland Park High School football games.

But things are subtly different around here these days. It may not be spoken of out loud, but news of harder financial times is whispered through inner circles. Some kids, who once attended pricey private schools, are now in public schools. And homeowners patiently, and sometimes desperately, wait for an offer to be made on homes that once sold in an average of 45 days.

“Sales are down about 46 percent this year for me over last year’s sales at the same time,” said Kelly, a local realtor and resident who has a child in the Highland Park School District. Kelly asked that her full name not be used because of the negative impact it could have on her business.

“There’s about 18 months’ worth of properties listed for sale in HPISD right now,” she said. “I even know of at least one family that had to sell their home and move in with relatives for a while.”

Many of the people interviewed for this story have asked that their last names not be included. This is a tight-knit community and they don’t want their friends to know of their financial worries, or their businesses to be damaged.

Those interviewed acknowledge that in this recession, plenty of people have it worse than they do. But even here in the “bubble,” a community of high incomes and million dollar homes, many people have seen retirement accounts plunge and housing values drop. Others have lost jobs.

In short, many are coming up short.

Studies show that people tend to spend according to what they have, said Dr. Michael Crow, lecturer in psychology at Southern Methodist University in University Park. People develop a lifestyle and their self-concept and self-esteem get wrapped up in it. A multitude of problems can occur when a person loses his or her job, for instance.

“In this community it’s common for people to make long-term commitments to churches and charities,” said Dr. Crow. “After a job loss, you now have someone who can’t live up to their financial commitments personally or socially and they can become depressed.”

Michelle is a young mother who has two children and two sets of property taxes. She and her husband are currently living in a home they own, while building a new home on a lot they purchased before the economy started its downhill slide.

Michelle explained how they purchased the lot for their new home at the height of the economy and now it’s not worth what they paid for it. Her husband is in a professional field where he is receiving fewer assignments and making less money. The home they are living in is for sale and they’ve had to reduce the asking price in hopes that it will sell soon.

“This is a very stressful time for our family. We are making dramatic changes in our spending habits … clipping coupons, not buying clothes and choosing less expensive finishes for our new home,” she said.

As many families are trying to sell their homes, others who have been waiting for home prices to turn downward have found some real bargains in this highly coveted school district, which includes the towns of Highland Park and University Park. The Texas Education Agency (TEA) has rated all seven campuses in HPISD as “Exemplary.” And six of its campuses earned the distinction of being named to the Texas Business and Education Coalition (TBEC) honor roll, according to the school district’s website.

Jackie, who works in health care and is the mother of two kids in the school district, recently purchased a home after renting a duplex for several years. Jackie said that since she didn’t purchase an extravagant home, for her, there were no negatives in buying.

“The timing was right for me to take advantage of a down economy,” she said.

A school district official who asked to remain anonymous due to policies against speaking to the media, said the growth in enrollment for this year’s seventh and eighth grades is the biggest increase the district has seen in about 12 years. An Oct. 19 report in the Dallas Morning News showed that more students than usual transferred to the district this year, especially among students in the fifth through eighth grades.

“We’ve had a lot kids entering the district from private schools and out of state,” the official said.

Contributions to Mad for Plaid, a joint fundraising venture of the PTA and Highland Park Education Foundation, were about $2.5 million for the 2008-2009 school year, down approximately $1 million over the previous school year, according to the school district’s records.

The organization raises funds to recapture tax revenues lost to the so-called Robin Hood plan, which transfers money from wealthy to poor school districts. The Mad for Plaid money funds teachers’ salaries, advanced teacher training, technology for the classroom, and other critical needs.

“Every dollar we collect stays right here in our schools, for our kids and our teachers,” said Jan Peterson, executive director of Mad for Plaid. “And even though we didn’t raise as much money last year as we have in the past, it’s still a lot more money than most districts are able to raise.”

Denise, a mother of an elementary school student, said her family made a decision to leave private school and relocate to the district. Their family also has two children in college.

“The high cost of private school was equivalent to what we are paying for college tuition, so we decided it would be best to eliminate that expense,” she said.

Denise’s husband works in a commission-based field and his business is down about 40 percent over the past year, she said. So the family made the tough decision to sell their 6,000 square-foot home in a highly-rated suburban school district and chose a high-rise condominium in HPISD that is roughly half the size of their former residence.

“Financially the change has been great for our family, less maintenance and my son loves his new school,” Denise said.

She added that she has several friends with children who are leaving private schools and looking to lease or purchase homes in the Park Cities.

Cheryl, a single mother of one child in elementary school and two about to enter pre-school, said things are a little different in her situation. She has enough money not to work, but her investments are down and the future has her concerned.

“I’m pretty conservative with my money, but now I’m even more cautious about what I’m spending,” she said.

She said she is hoping the economy will turn around soon so she won’t need to go back to work before her younger children start school. Cheryl said she made the choice to move into HPISD a few years ago because the cost of private school for three children would be more than the cost of living in the Park Cities.

“My friends that live outside the bubble think that everyone is wealthy and we have no financial worries,” she said. “But, that’s just not true. We may have higher incomes, but we also have higher mortgages, higher taxes, and a higher overall cost of living so it’s all relative.”

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