Mar 2009
Condo Values by Building: Austintowers Exclusive
March 29, 2009 23:08 Filed in: Market Analysis
When you buy a downtown Austin condo, you are really buying part of a building. The services, staff, amenities, maintenance, location, style, community and construction quality are more important than the particulars of any individual unit. That's why our listings are organized by building -- research shows that buyers first choose a building and then pick a unit. When it comes to urban Austin condos, the building is the product.
Not surprisingly, price per square foot varies widely for downtown Austin condo buildings. With values ranging from $197/SF at Greenwood Towers to $472/SF at the 5 Fifty Five Condos atop the Hilton, the data clearly shows that the building is the most important determinant of condo values. So, when you buy a condo unit, remember that the building will be the most important determinant of investment return.
Here are the details on actual building-by-building MLS sales over the last 14 months:
Downtown Condo Transactions: 1/1/2008 to 2/28/2009
As usual, these values exclude private transactions for units not listed on MLS. For example, hundreds of original transactions in 360 conducted by first time buyers purchasing from the sales center are not included. All resale and new transactions listed on MLS should be included.
Not surprisingly, price per square foot varies widely for downtown Austin condo buildings. With values ranging from $197/SF at Greenwood Towers to $472/SF at the 5 Fifty Five Condos atop the Hilton, the data clearly shows that the building is the most important determinant of condo values. So, when you buy a condo unit, remember that the building will be the most important determinant of investment return.
Here are the details on actual building-by-building MLS sales over the last 14 months:
Downtown Condo Transactions: 1/1/2008 to 2/28/2009
| Building | Year | # Sales | $/SF | Avg SF |
Five Fifty 05 | 2004 | 6 | $473 | 1430 |
Nokonah | 2001 | 7 | $442 | 1414 |
Brazos Place | 2008 | 12 | $370 | 927 |
360 | 2008 | 4 | $368 | 775 |
Austin City Lofts | 2003 | 11 | $353 | 1718 |
Milago | 2006 | 26 | $344 | 1047 |
Westgate | 1965 | 4 | $325 | 699 |
Sabine | 2007 | 5 | $312 | 1287 |
Railyard | 1983 | 8 | $296 | 892 |
Plaza Lofts | 2002 | 3 | $291 | 1190 |
Posada Del Rey | 1964 | 5 | $282 | 1015 |
Avenue Lofts | 1999 | 2 | $279 | 1095 |
Penthouse | 1973 | 5 | $254 | 728 |
Cambridge Condos | 1964 | 11 | $254 | 1456 |
Brown Building | 2000 | 6 | $250 | 848 |
Villas on Town Lake | 1982 | 5 | $241 | 1080 |
Towers Town Lake | 1983 | 8 | $228 | 1467 |
Greenwood Towers | 1966 | 5 | $197 | 667 |
As usual, these values exclude private transactions for units not listed on MLS. For example, hundreds of original transactions in 360 conducted by first time buyers purchasing from the sales center are not included. All resale and new transactions listed on MLS should be included.
Weaker Austin Housing Market May Lead to Tight Future Supply
March 23, 2009 20:51 Filed in: Market Analysis
Angelos Angelou, a local Austin economic guru, commented recently on the long-term effects of the current housing slow down. With tight credit, reduced transaction volume, and a slight dip in housing prices, builders have reacted by dramatically cutting the number of new housing units under development. From 2007 to 2008, Austin housing started plunged 55% from 18,000 to 8,100. This number is predicted to be as low as 6,000 this year.
With more than 40,000 new residents arriving in Austin each year, new housing units are very quickly absorbed. Since housing prices are determined by supply and demand, reduced supply relative to population will help restore market equilibrium, and may eventually cause prices to rise again.
Here is a summary of the very interesting article from Community Impact News:
National builders’ woes will halt new home construction in a still-vibrant Austin market, Angelos Angelou predicted in his 2009 economic forecast, released in January.
“My fear is that national developers may have overreacted, and Austin may be penalized in the form of lower home starts, which eventually can create an artificial shortage,” said Angelou, principal executive officer for AngelouEconomics.
Central Austin housing market data
According to Angelou’s math, Austin has grown by about 60,000 people annually in recent years, with a natural growth (the difference between births and deaths) of about 18,000 per year. That means 42,000 people are newcomers to the area in need of housing.
In 2007, Austin had 18,000 home starts, but in 2008 only 8,100 housing units were built. He said 6,000 units are expected in 2009.
“That’s not enough. The ideal number of home starts for Austin is 11,000. Obviously, business conditions dictate that only so many units are being built because the credit markets are frozen,” Angelou said.
The largest decline in home starts has been in the $200,000 and under price range since fourth quarter 2006, according to data from housing data analysis firm MetroStudy.
“Capital constraints faced by builders and the tightening in credit for buyers played large roles in this decline,” said Eldon Rude, head of MetroStudy in Austin. “While starts of homes priced below $200,000 will likely continue to slow in 2009, most of the decrease in activity will be in the higher price points.”
Wait, wait — don’t sell me
Angelou said that now is an ideal time to buy, but those thinking of selling should wait for the housing shortage.
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“You don’t want to be selling now. This is not a seller’s market at all; it’s a buyer’s market,” he said. “I would not even think of selling a house until two years from now, at least.”
Owners whose home values have dropped should not panic and sell, said Mark Sprague, Austin partner for Residential Strategies.
“You haven’t lost any equity if you haven’t sold your house,” he said. “It’s like a stock. You have to wait for that equity to come back.”
Renting out homes instead of selling them could be a viable option for homeowners wanting to move immediately, Angelou said. Rental prices are expected to remain stable, and the rent money collected should help cover the payments on a new home.
Read the full story here
With more than 40,000 new residents arriving in Austin each year, new housing units are very quickly absorbed. Since housing prices are determined by supply and demand, reduced supply relative to population will help restore market equilibrium, and may eventually cause prices to rise again.
Here is a summary of the very interesting article from Community Impact News:
National builders’ woes will halt new home construction in a still-vibrant Austin market, Angelos Angelou predicted in his 2009 economic forecast, released in January.
“My fear is that national developers may have overreacted, and Austin may be penalized in the form of lower home starts, which eventually can create an artificial shortage,” said Angelou, principal executive officer for AngelouEconomics.
Central Austin housing market data
According to Angelou’s math, Austin has grown by about 60,000 people annually in recent years, with a natural growth (the difference between births and deaths) of about 18,000 per year. That means 42,000 people are newcomers to the area in need of housing.
In 2007, Austin had 18,000 home starts, but in 2008 only 8,100 housing units were built. He said 6,000 units are expected in 2009.
“That’s not enough. The ideal number of home starts for Austin is 11,000. Obviously, business conditions dictate that only so many units are being built because the credit markets are frozen,” Angelou said.
The largest decline in home starts has been in the $200,000 and under price range since fourth quarter 2006, according to data from housing data analysis firm MetroStudy.
“Capital constraints faced by builders and the tightening in credit for buyers played large roles in this decline,” said Eldon Rude, head of MetroStudy in Austin. “While starts of homes priced below $200,000 will likely continue to slow in 2009, most of the decrease in activity will be in the higher price points.”
Wait, wait — don’t sell me
Angelou said that now is an ideal time to buy, but those thinking of selling should wait for the housing shortage.
Advertisement
“You don’t want to be selling now. This is not a seller’s market at all; it’s a buyer’s market,” he said. “I would not even think of selling a house until two years from now, at least.”
Owners whose home values have dropped should not panic and sell, said Mark Sprague, Austin partner for Residential Strategies.
“You haven’t lost any equity if you haven’t sold your house,” he said. “It’s like a stock. You have to wait for that equity to come back.”
Renting out homes instead of selling them could be a viable option for homeowners wanting to move immediately, Angelou said. Rental prices are expected to remain stable, and the rent money collected should help cover the payments on a new home.
Read the full story here
Austin Market Fundamentals: 2 of 3 Indicators Strong
March 19, 2009 22:25 Filed in: Market Analysis
When thinking about the strength of the Austin real estate market during normal times, there are three important variables that drive home values: population growth, job growth, and interest rates (you need to look separately at conforming and jumbo rates).
While job growth does not seem to be occurring -- layoffs are being announced every week in Austin much like the rest of the country -- the other two variables are surprisingly strong.
According to the Census Bureau, Austin/Round Rock was the 2nd-fastest-growing metropolitan area between 2007 and 2008. According to the Austin Business Journal, "the population in the Austin-Round Rock area grew 3.8 percent to 1.65 million between July 2007 and July 2008. Among major U.S. metros, that growth rate was second only to Raleigh-Cary, N.C., which experienced a 4.3 percent population uptick during the 12-month period."
This week, mortgage rates have dropped within striking distance of the all-time lowest rates, a record set earlier this year. 30-year fixed mortgage rates now average 4.98% for loans under $417,000. Jumbo rates, unfortunately, are still close to 7%. For all buyers, credit requirements remain tight.
While there is lots of bad financial news right now, the Austin market continues to hold its ground. While sales volumes have dropped significantly, prices have not. Hopefully, strong population growth and low interest rates will hold off the crisis that has effected much of the country.
While job growth does not seem to be occurring -- layoffs are being announced every week in Austin much like the rest of the country -- the other two variables are surprisingly strong.
According to the Census Bureau, Austin/Round Rock was the 2nd-fastest-growing metropolitan area between 2007 and 2008. According to the Austin Business Journal, "the population in the Austin-Round Rock area grew 3.8 percent to 1.65 million between July 2007 and July 2008. Among major U.S. metros, that growth rate was second only to Raleigh-Cary, N.C., which experienced a 4.3 percent population uptick during the 12-month period."
This week, mortgage rates have dropped within striking distance of the all-time lowest rates, a record set earlier this year. 30-year fixed mortgage rates now average 4.98% for loans under $417,000. Jumbo rates, unfortunately, are still close to 7%. For all buyers, credit requirements remain tight.
While there is lots of bad financial news right now, the Austin market continues to hold its ground. While sales volumes have dropped significantly, prices have not. Hopefully, strong population growth and low interest rates will hold off the crisis that has effected much of the country.
Problems at the Sabine: Residents Sue Developer
March 16, 2009 22:40 Filed in: News
This week, 35 residents of The Sabine filed suit against the developers for list of problems that the condo owners say have been ongoing for month. The Sabine is an 80-unit condo conversion project of a mostly-empty office building on Waller Creek into a new condo project adjoining the Hilton Garden Inn on 5th Street near I-35. The project was completed last year although many units still remain on the market.
According to the residents:
- The building seems to have serious elevator problems. In fact, a 12/29 elevator inspection exposed 19 code violations including some that were described as serious safety problems.
- Problems with water leaks, window seals, and sound-proofing.
- Failure to pay property taxes on more than 40 units -- a delinquency which may result in additional litigation
While it is difficult to tell how long it will take to resolve these issues, the problems do indicate quality issues for the newly completed condo conversion project. Litigation like this is rare, and shows that residents are angry and ready to revolt. These problems certainly illustrate the risks of being the first occupants of any building. Buyer have little choice but to take the developers word that they will deliver a quality building without cutting corners.
Article Continues Here: Read More...
According to the residents:
- The building seems to have serious elevator problems. In fact, a 12/29 elevator inspection exposed 19 code violations including some that were described as serious safety problems.
- Problems with water leaks, window seals, and sound-proofing.
- Failure to pay property taxes on more than 40 units -- a delinquency which may result in additional litigation
While it is difficult to tell how long it will take to resolve these issues, the problems do indicate quality issues for the newly completed condo conversion project. Litigation like this is rare, and shows that residents are angry and ready to revolt. These problems certainly illustrate the risks of being the first occupants of any building. Buyer have little choice but to take the developers word that they will deliver a quality building without cutting corners.
Article Continues Here: Read More...
February, 2009 Downtown Condo Sales
March 12, 2009 21:17 Filed in: Sales Data
We've received the latest monthly downtown Austin condo sales report from our friends at urbanspace realtors. Here are the results from February, 2009:
Despite a substantial increase in downtown units over the last year, February sales remained flat year-over-year. The market, however, showed surprising strength given the world changes that have occurred over the last twelve months.
February sales included two transactions greater than $600k -- one in the Nokonah and one in Austin Citty Lofts -- a positive sign for the upper end of the market. Dollars per square foot increased to $322 from $309 last year. There were three transactions under $300K, two of which were in 360. With four transactions so far this year, units in 360 have sold for an average of $368 / square foot. The range has been a very broad $327 to $405 / square foot.
While the February downtown condo sales numbers are generally positive, "% of ask" dropped substantially to 90% (from 98%) and "Average Days on Market" increased 30% to 116 -- both of which suggest sluggishness.
As usual, these results do not include units sold directly by developers in buildings such as 360, the Austonian, Spring, etc. The monthly MLS data tends to under-report sales, especially of high price units.
The full results and current inventory are available on the new AustinTowers | urbanspace Downtown Austin Condo Market Index.
| Month | Sales | Avg. Price | $/SF | Avg SF | Avg Year | % Ask | ADOM |
| Feb-08 | 6 | $279,017 | $309 | 897 | 1977 | 98% | 89 |
Feb-09 | 6 | $400,833 | $322 | 1,258 | 1998 | 90% | 116 |
Change | 0% | 44% | 4% | 40% | 21.00 | -8% | 30% |
Despite a substantial increase in downtown units over the last year, February sales remained flat year-over-year. The market, however, showed surprising strength given the world changes that have occurred over the last twelve months.
February sales included two transactions greater than $600k -- one in the Nokonah and one in Austin Citty Lofts -- a positive sign for the upper end of the market. Dollars per square foot increased to $322 from $309 last year. There were three transactions under $300K, two of which were in 360. With four transactions so far this year, units in 360 have sold for an average of $368 / square foot. The range has been a very broad $327 to $405 / square foot.
While the February downtown condo sales numbers are generally positive, "% of ask" dropped substantially to 90% (from 98%) and "Average Days on Market" increased 30% to 116 -- both of which suggest sluggishness.
As usual, these results do not include units sold directly by developers in buildings such as 360, the Austonian, Spring, etc. The monthly MLS data tends to under-report sales, especially of high price units.
The full results and current inventory are available on the new AustinTowers | urbanspace Downtown Austin Condo Market Index.
Thinking About the Austin Market
March 12, 2009 21:17 Filed in: Market Analysis
Even during tough times, Austin has fared better than most cities. urbanspace posted an online slide show that tells the story of downtown Austin through statistics and awards. If you're depressed about everything else in the news, this should make you feel better! See the slides here.
The 10 Mile Loop: Austin to Proceed with Hike & Bike Trail Extension
March 08, 2009 23:52 Filed in: News
Over the last few months, the City has been floating a proposal that would achieve one of Austin's most important urban planning goals: filling the 1.2 mile gap in the 10.1 mile hike and bike trail around Lady Bird Lake. While land owners along the 1.2 mile stretch of the lake have objected, the City has decided to proceed with a proposed over-water boardwalk to complete the loop.
The Boardwalk Trail at Lady Bird Lake would extend the Lady Bird Lake hike and bike trail more than one mile from the east side of the Austin American-Statesman building to Lakeshore Park. Currently, pedestrians, runners and bikers are forced to use the Riverside Drive sidewalk over Interstate 35. While there are some opportunities for extension of the trail on the shore, the trail will be primarily over the water.
The extremely popular trail is a great community asset for anyone who spends time downtown. The bold $15 million project will complete the trail, improving bike and pedestrian access throughout downtown Austin.
Article Continues Here: Read More...
The Boardwalk Trail at Lady Bird Lake would extend the Lady Bird Lake hike and bike trail more than one mile from the east side of the Austin American-Statesman building to Lakeshore Park. Currently, pedestrians, runners and bikers are forced to use the Riverside Drive sidewalk over Interstate 35. While there are some opportunities for extension of the trail on the shore, the trail will be primarily over the water.
The extremely popular trail is a great community asset for anyone who spends time downtown. The bold $15 million project will complete the trail, improving bike and pedestrian access throughout downtown Austin.
Article Continues Here: Read More...
Keeping up with AustinTowers
March 05, 2009 21:01 Filed in: Site News
For our thousands of frequent readers, there are more ways than ever to keep up with the News on AustinTowers!
If you have a Twitter account, you can follow us at http://twitter.com/austintowers. We regularly use twitter to send flash news updates, check the validity of rumors, and pass on market insights from experts that we talk to. Twitter is free to join and a great way to keep up with Austin Towers news.
As always, if you use Google for search, we've made it easy to add our news feed to your google home page. Simply click on the "Add to Google" button on the right and you will be directed to Google to create an iGoogle search page like the one below, to add AustinTowers to an existing iGoogle page, or to add AustinTowers to Google Reader. Once added, you'll see our latest headlines whenever you visit your iGoogle page to conduct a web search. If you later change your mind, it's easy to remove the AustinTowers feed or to revert to a basic search page.
As many of you know, you can also subscribe to the AustinTowers feed on this site by simply clicking the Orange RSS feed button on the sidebar or by following this link: AustinTowers RSS Feed
Thanks for visiting the site! If you have ideas or feedback, send us a note to register and add comments! We love to hear from our 10,000 monthly readers!
If you have a Twitter account, you can follow us at http://twitter.com/austintowers. We regularly use twitter to send flash news updates, check the validity of rumors, and pass on market insights from experts that we talk to. Twitter is free to join and a great way to keep up with Austin Towers news.
As always, if you use Google for search, we've made it easy to add our news feed to your google home page. Simply click on the "Add to Google" button on the right and you will be directed to Google to create an iGoogle search page like the one below, to add AustinTowers to an existing iGoogle page, or to add AustinTowers to Google Reader. Once added, you'll see our latest headlines whenever you visit your iGoogle page to conduct a web search. If you later change your mind, it's easy to remove the AustinTowers feed or to revert to a basic search page.
As many of you know, you can also subscribe to the AustinTowers feed on this site by simply clicking the Orange RSS feed button on the sidebar or by following this link: AustinTowers RSS Feed
Thanks for visiting the site! If you have ideas or feedback, send us a note to register and add comments! We love to hear from our 10,000 monthly readers!
Austin May Eliminate Downtown Meters! (there's a catch)
March 05, 2009 21:01 Filed in: News
Good news! The City of Austin is considering eliminating 3,800 single space parking meters!
The only downside is that they plan to replace the 3,800 meters with 750 whole block "pay station kiosks" that will make you walk down the block to figure out how to use a complex machine to print a ticket to place on the inside of your car after you walk back down the block.
Why? Apparently, each of the existing meters fails every 90 days on average -- and replacing them with a large complex machine with ink, paper, and an internet connection should eliminate this problem. Coincidentally, it would also allow the city to take credit cards and charge higher prices for downtown parking over time.
All this for just $8.4 million!
Articles Continue Here: Read More...
The only downside is that they plan to replace the 3,800 meters with 750 whole block "pay station kiosks" that will make you walk down the block to figure out how to use a complex machine to print a ticket to place on the inside of your car after you walk back down the block.
Why? Apparently, each of the existing meters fails every 90 days on average -- and replacing them with a large complex machine with ink, paper, and an internet connection should eliminate this problem. Coincidentally, it would also allow the city to take credit cards and charge higher prices for downtown parking over time.
All this for just $8.4 million!
Articles Continue Here: Read More...
On Sale! Bridges on the Park Now 20% Off?
March 02, 2009 21:25 Filed in: News
In a highly unusual strategy, Bridges on the Park has announced a "March Sale" in which they have reduced unit prices by 20%. With the reduction, prices start under $300,000 for a 1 bedroom 1 bath unit and under $400,000 for a 1,349 square foot 2/2 unit. The pricing reduction shifted the price per square foot from $350-$430/SF to $285-$340/SF.
Bridges on the Park is a six floor 104 unit project on a 2.5 acre site just south of the lake and the hike & bike trail on South Lamar. The project was recently completed.
During construction, Bridges on the Park raised prices to their current rates after lining up a surprisingly strong waiting list for reservations. When the final prices were announced and the economy turned south, the reservations did not turn into sales as expected. Now Bridges on the Park has restored prices to levels closer to the originally announced amounts. While a highly unusual sales tactic, for new buyers looking to get close to downtown at reasonable price, this is very good news.
Here are some examples of units currently for sale at Bridges on the Park:
Article Continues Here: Read More...
Bridges on the Park is a six floor 104 unit project on a 2.5 acre site just south of the lake and the hike & bike trail on South Lamar. The project was recently completed.
During construction, Bridges on the Park raised prices to their current rates after lining up a surprisingly strong waiting list for reservations. When the final prices were announced and the economy turned south, the reservations did not turn into sales as expected. Now Bridges on the Park has restored prices to levels closer to the originally announced amounts. While a highly unusual sales tactic, for new buyers looking to get close to downtown at reasonable price, this is very good news.
Here are some examples of units currently for sale at Bridges on the Park:
Article Continues Here: Read More...