Here is the transcript of the News 8 Austin story (Original story and video can be found here):
Living in a condominium has its perks.
Lou Talamo lives at The Shores on Davis Street in Downtown Austin.
"I'm close to everything," he said.
Talamo is one of a growing number of condo owners in Downtown Austin, and more are on the way.
According to the Sales and Marketing Director for The Shores and Four Seasons, Brandon Miller, demand is high.
"Of the 1,000 condos under construction, at least half have already been sold," he said.
According to Austintowers.net Editor Paul D'Arcy, four downtown condos have been cancelled and seven are pending.
"Certainly, when I started this a year and a half ago it was boom time for condo projects. It seemed like every week another one was being announced. Since then, many of the projects have disappeared," he said.
Plans for Aqua Terra Condos on Barton Springs are on hold as are plans for Sungari Pearl Lofts on East Fifth Street.
JMI Realty President and CEO John Kratzer said they've decided not to build condo units on top of the hotel they plan to build on Davis Street.
Kratzer said it all boils down to money.
"As you know, we had the meltdown in the sub-prime mortgage market last fall," he said.
That's why many lenders aren't willing to invest in these major projects anymore.
"I would say you could count them on one hand across the whole country," Kratzer said.
Those wanting to buy into the condo projects are finding it equally difficult, according to Melanie Taliaferro, Fairway Independent Mortgage Company loan officer.
"The big banks are starting to take a closer look and say, 'Now before we lend anybody money to buy into these projects, we want to see that they are at least 50 percent pre-sold," she said.
Miller said the stalling condo market could be good news.
"That means what is being built and what's under construction today is all that's going to be under construction. You're not going to see any new building start up which means we are not bringing a lot of supply to Austin," Miller said.
But D'Arcy said developers shouldn't throw in the towel just yet.
"There still seems to be enough demand for those projects to be successful," he said.
Since the report looks at average values of sold condo units listed in the MLS, it does not take changes in housing mix (expensive new projects raise the average) or changes in buying trends (the market for low end units evaporating would raise the average). So, as usual, the numbers may not represent the increase in value of a typical unit over the time period. That said, the data is clear: the broad Austin condo market continues to perform well.
Here is the raw data on Austin:
Austin-Round Rock, TX Condo Market Values
2005 Avg Value ($ ‘000): $137.6
2006 Avg Value ($ ‘000): $150.4
2007 Avg Value ($ ‘000): $172.3
2007 June Avg Value ($ ‘000): $172.1
2008 June Avg Value ($ ‘000): $175.3
1 Year % Change: 1.9%
Here are some of the key observations:
(1) Austin remains relatively inexpensive. Of the top 60 markets, Austin is the 29th most expensive condo market:
San Francisco-Oakland-Fremont, CA
Los Angeles-Long Beach-Santa Ana, CA
New York-Wayne-White Plains, NY-NJ
Austin-Round Rock, TX
(2) While condos in the worst performing markets have lost 20% - 30% of their value in the last year, Austin is one of a few markets where condo values have appreciated. Of the top 60 markets, Austin is the 11th fastest appreciating condo market and one of only 19 that gained value between mid-2007 and mid-2008:
New Orleans-Metairie-Kenner, LA
Houston-Baytown-Sugar Land, TX
Norwich-New London, CT
Austin-Round Rock, TX
Miami-Fort Lauderdale-Miami Beach, FL
Las Vegas-Paradise, NV
(3) Over the last three years, Austin has been one of the best performing condo markets in the country. When we look at the Austin condo market between 2005 and the second half of 2008, it ranks 2nd of 60 markets in total appreciation:
Salt Lake City, UT
Austin-Round Rock, TX
Los Angeles-Long Beach-Santa Ana, CA
Las Vegas-Paradise, NV
Cape Coral-Fort Myers, FL
All-in-all, the market news is uniformly positive and confirms what many other market reports have shown: the national real estate crisis has effected volumes but not prices in the broad Austin condo market.
The full NAR report can be found here.
While a sample map is shown below, the top-of-the-line fancy interactive map can be found on the new Austin Towers map page located here. In addition to showing all new and completed projects with images and their own color-coded pins, the full map includes a comprehensive project table that lists all current projects with their key statistics.
The full map can be found here!
Star Riverside Listings
Today, there are 6 units listed ranging from a 670 square foot 1/1 for $345K to a 935 square foot 2/2 for $517K to a large 2,315 square foot 3/2 for $1.37M. The smallest unit comes with one parking space and the largest with 2 spots. These units are expected to be ready for move-in in 2009.
Austin Towers is the only source for current building-by-building listings. In addition to the standard Multiple Listing Service (MLS) listings provided by realtors on completed projects, the listing guide also provides direct links to developer listings which are not included in the MLS.
This week, however, comes good news for buyers with the opening of Brazos Place on 8th street between Brazos and Congress. Brazos Place houses 72 units in the redeveloped shell of the former Commore Perry hotel. With fewer than 12 units still available (Brazos Place Listings) ranging from a 623 SF 1/1 for a very reasonble $259,000 to a 1,399 SF 2/2 for $464,900 to a 2,745 SF 3/3 penthouse for $1.575M, Brazos Place is nearly 85% sold out and is available for immediate occupancy.
In addition, the developers have announced that they are providing incentives on some of the remaining units:
- $15,000 to $25,000 off for any contracts signed on 2-bedroom units by August 31, 2008.
- Onee year of free association dues on any one bedroom units put under contract by August 31, 2008.
Finally, the project has annonced new retail tenants. Anthony Nak and
Ana's Market are currently open. Baby Green's (salads & wraps) and
Launchpad Coworking (an internet cafe/bar) will be open by October 08.
Here are current images of the project:
The project is expected to contain 220 units and 15,000 square feet of retail on the 1/2 acre site. The project is scheduled to begin construction next year and to open to residents in late 2010 or early 2011.
Gables, a large national apartment developer with 63 communities and more than 50,000 units under management, is also working on a new 168 unit project on 5th street near Mopac which will rent for $1,300 to $1,800 per month. Gables also developed the Gables West Avenue Apartments, their first downtown project, at 3rd & West Avenue near Whole Foods.
Gables West Avenue Apartments at 3rd & West
Here is a summary from the Austin Business Journal:
A high-rise apartment tower is being planned for downtown's Warehouse District in an area teeming with new residential activity.Gables Residential plans to build a roughly 200-foot tower with about 220 units and 15,000 square feet of retail and commercial space at Fourth and Guadalupe streets. Gables bought the nearly half-acre site of former Fox & Hound Smokehouse and Tavern, east of Republic Square Park, from a group of local investors last year. The 15-year-old Gingerman Pub, also on the site, will move, general manager Kristin Jacobson says.The pub's original facade will be preserved as a historical feature of the new building, says Jennifer Wiebrand, spokeswoman for Gables Residential. The project will be able to support up to 70,000 square feet of parking.Construction is expected to begin in late 2009 and be completed in 18 to 24 months.
While it is not a scientific survey -- to say the least -- the current results do provide some small insights into the obstacles that developers face in luring residents downtown.
As of the time of this posting, the survey had the following results as to why people choose not to live downtown (see the current results here). Survey says:
44% -- Too expensive
19% -- I need a yard
16% -- Other (no additional details)
7% -- Units are too small
6% -- Lack of neighborhood services
5% -- Traffic
4% -- Schools
Here is what is most interesting: the data suggests that 51% of people who don’t want to live downtown (44% who find units too expensive and 7% who find units too small which really means too expensive) would like to live downtown if it was more affordable. Even though just 1% of Austin’s population lives downtown, the idea of downtown living is appealling to a broad segment of the population -- at least the population of Austinites that reads the Austin Business Journal online!
The survey suggests that there are few intractable, structural barriors to downtown population growth. While, the 19% of people who need a yard will likely never move into a condo, they key driver for most people in the survey is affordability. As new projects continue to hit the market, it’s good news that lots of people do want to live downtown!
The developer of the 290 room Hotel Van Zandt and the 55 luxury Residences at the Hotel Van Zandt have announced that they are abandoning plans for the condo portion ofthe project. Instead of a 29-story tower with hotel and condos, the developers will proceed with a scaled-back 16-story hotel on the site near the Shore in the southeast corner of downtown.
The Residences at the Hotel Van Zandt were to feature 55 units ranging in size from 1,400 to 5,200 square feet and ranging in cost from $500,000 to $2 million. As we have mentioned before, it’s a tough time to get financing for large condo projects and many of the projects that have been conceptualized but not yet broken ground may face cancellation. For buildings that are already under construction -- the Austonian, Spring, W Hotel & Residences, Four Seasons Residences, BartonPlace -- are all expected to be completed as planned.
THE ORIGINAL PLAN FOR THE HOTEL VAN ZANDT:
THE NEW PLAN FOR THE HOTEL VAN ZANDT: