Four Seasons Residences May Actually be Built

After seven years of proposed projects, the developer behind the Four Seasons Residences claims that the project will break ground this year. Apparently, the developer is self-financing the $100 million project -- eliminating the pre-sales hurdles which stall many projects before construction.


75% of 360 Units Sold in 3-Weeks

An incredible 75% of the 430 units in Novare Groups' 44-story 360 project are now under contract after just 3 weeks on the market. The units, which are mostly priced between $190K and $550K, rank among the most affordable units in the current downtown condo boom. This demonstrates, once again, that there is tremendous pent-up demand for reasonably priced units in central Austin.

Today, there are only 9 listings in the Austin MLS (360 is being marketed privately and is not reflected in the MLS numbers) in all of central Austin — areas 1b. 1a, 2, 4, 6, 7. To find similarly priced homes, buyers need to look far outside the city center. In contrast to other options, central high-rise developments seem to be very attractive to buyers. As this sales rate shows, units priced under $400K will move very quickly -- there will likely be ongoing demand to fill quite a few projects like this one. Novare, in fact, is planning additional 35-story and 40-story tower on the central post office site and an adjacent lot for completion by 2010. These units will priced in a similar range to the 360 project.

AustinTowers ongoing reader survey (please take our survey if you haven't already!) has shown so far that more than 90-percent of potential downtown Austin condo buyers are looking for units priced under $400K with the median target price for buyers currently around $300K.

Why it is Hard to Track Downtown Condo Sales

One problem with analyzing the downtown austin condo market is the lack of good sales data on many of the projects currently on the market. When realtors sell traditional single family homes or resell condo units, they are listed on MLS and the actual sales price is recorded in MLS and available to any participating real estate agent. Unfortunately for buyers and sellers, many of the new downtown high-rise projects are being marketed by in-house sales teams without the assistance of realtors. As a result, these units never hit MLS, aren't included in market statistics, and the comparable sales data isn't available to realtors. The result: downtown condo buyers have very little information on sales prices and discounts in the major downtown projects.

The only upside is that the lack of transparancy may help buyers get better deals. When a large project is marketed on MLS, developers are very resistent to give discounts as every future buyer will ask for the same deal. They are much more likely to stick to list price or standard discounts to protect their margins. When the sale is non-public, the developer doesn't have to worry about providing a break on an uncontested unit as nobody else will know.

This trend towards in-house marketing is one of the reasons that the current MLS statistics show a 14% year-over-year drop in February of condos and townhomes in Austin. While sales volumes of single family homes are flat amid tightening supply and quicker sales, the condo and townhome data is useless because it does not include any of the in-house sales.

Austin Luxury Market

The market for high-end homes has been one of the fastest growing segements in the Austin market. According Sam Chapman, "there are [currently] over 400 homes priced for over one million dollars on the market in the Austin area. The average price of these Austin luxury homes is $1.8 million and the average size is over 5,000 square feet. The most expensive listing is an over 17,000 square foot home that is listed for $7.5 million. There are more than 40 homes on the market in Austin priced over $3 million."

When you look at actual sales over the last few years, exceptional high-end homes near the water, in Westlake, or downtown now sell for as much as $500 / SF or more. No matter how nice a smaller house is in a prime neighborhood, it's rare to see houses under 4,000SF sell for more than $300SF. The average for the Austin area is well under $150SF. So, the key is that the luxury market is a distinct market of large houses in select locations, on prime lots, with very high-end finishes. In December 2006, 28 houses and condos in Austin sold for more than $1 million. In the scheme of things, this is not a very large market.

Read more to see detailed statistics on high-end sales by MLS area . . . . Read More...

The Condo Conversion Wave

The Statesman reported today on three condo conversion projects currently under way in downtown Austin. All three projects will transform commercial space into new condos. As thousands of residential units are being built in Austin for new residents who want to live and work in downtown. Compared to the boom in condo development, there is relatively little new downtown office space being developed downtown. These conversions will take additional office space offline. All in all, the city seems headed for a healthy commercial-residential mix.

One of the projects is "Sabine on Fifth" - an 80 unit 10-story building on, go figure, Sabine & 5th just west of I-35. Units will start at $190K for a 700 SF one bedroom apartment. the most expensive unit is in the mid 500's for 1,461 SF. The second project is the Brazos Place Condominiums, which we've fully profiled. It's units are already on the market. The Third project is Capital Tower which would include just 25 "Ultra Luxury" units atop an office building at 9th & San Jacinto. The project is still in the early planning phase.

Here is a picture of Sabine on Fifth:

Nokonah Pricing Analysis: Part I

The Nokonah, A luxury high-rise project completed in 2002, was one of the first successful projects that helped to ignite the current condo boom in downtown Austin. The 11-story project is located at 9th and Lamar just north of Whole Foods and on the western border of downtown. When the Nokonah was built, the real estate market in Austin was stalling as the regional economy slowed. It was not clear how well the new project would do. Five years later we know the answer: the project sold out and the buyers have seen significant appreciation in the value of their units.

In order to better understand condo values in the downtown market, we've begun a comprensive analysis of public tax records (tax records are available online through the Travis Central Appraisal District) to better understand downtown condo market values and how they have changed over the last five years. This analysis, which tracks every unit in the Nokonah, shows appraisal value and $ / SF by floor, apartment size, # of bedrooms, and year. The data is fascinating and will be a useful tool for anyone looking to purchase a downtown condo (Register for the full report).

For example, the analysis shows that the average appraisal value of Nokonah units rose 61% from $233 in 2003 to $376 in 2006 - a growth rate of 17% per year. This is more than trible the 5% annual growth rate in sales prices for the Austin market during the same time period. Even as other projects have hit the market, Nokonah values have continued to increase in value.

While the average appraised value is $376 / SF today, there is incredible variance. If you're trying to figure out what the right price is to pay for a new unit, the Nokonah data is very interesting: current appraised values actually range from $230 / SF to $498 / SF depending on size, floor, bedrooms, etc. In future postings, I'll dive deeper into the factors that make a unit more or less valuable.

Over the next few weeks, I plan to post more information from the Nokonah analysis in this blog. In addition, I am going to provide all registered members with direct access to the spreadsheet with all of the data. This will be a great tool for anyone who is trying to ensure they don't overpay for an Austin condo or anyone who is interested in better understanding Austin condo market dynamics. Registration is absolutely free -- just click the link on the top of the page and complete our very brief survey. The summarized data will be published in a future post, and it will help AustinTowers better understand our readers. Please register -- you'll receive a link to the full Nokonah analysis later this month!

Barton Springs Project Proposed

While it's technically out of the downtown radius, Texas American Resources is proposing a 14-story mixed-use project on Barton Springs Rd. between 1st and Lamar and directly across from the Long Center. The building would include 24 condo units atop 86,000 feet of office space and a ground floor restaurant. The site is the former location of the iconic Filling Station restaurant which closed in 2004.


Major Austin Towers Site Update

As promised, a new section launched tonight that lists all known "Early Stage" Projects. The new section will include projects that have been announced and do not have enough information for a full profile. Today, the section lists 8 new projects with 2,500 units and total proposed budgets in excess of $1 billion.

In addition, two new projects were added to the Project Navigator:

The Residences at the Hotel Van Zandt and Bridges on the Park. Bridges on the Park is well on it's way -- construction started last year on South Lamar and is expected to be completed in 2007.

Planning Commission Denies Riverside Variances

Ever since the Hyatt hotel was built on the south shore of Town Lake, neighborhood groups have mobilized to limit development south of the lake. This week, in a marathon planning commission that lasted until 2:30AM, the commission recommended that the city counsel deny variances for two high profile "South Lake" projects. Read More...