Free Downtown Austin Guide Book

UrbanSpace Realtors, a large real estate firm focused on the downtown residential market, has published a second version of their comprehensive guide to downtown neighborhoods and living options as well as dozens of their favorite dining, entertainment, and cultural destinations. The guide is amazingly comprehensive: it profiles a broad range of living options in and around downtown Austin and shows nearby Urbanspots -- the cool community destinations that draw people downtown. The new book provides greatly expanded coverage of downtown neighborhoods and hot spots.

The Urban Lifestyle and Residential Guide is the most comprehensive listing of downtown properties -- including buildings just to the East, South, North, and West of the downtown core covered by AustinTowers. Through special arrangement with UrbanSpace, a free copy of the new guide will be mailed for free to any AustinTowers reader who requests one. To get your copy of the guide -- while they last -- click here.



You can get your free copy of the Guide here.

New Home Buyer Tax Credits in Works

The U.S. Senate is working on a bill that would extend the first-time buyer home credit of $8,000 and add a new credit of $6,500 for homeowners who have lived in their current home for 5 years or more. The new provision, if enacted, would go into effect on December 1, 2009. The new bill is expected to cost upwards of $10 billion.

The tax credit has been an important driver of real estate transactions over the last quarter and one of the primary reasons that national real estate transaction volumes and prices have begun to show improvement. The new bill would extend these benefits -- and add the new credit — for homes that go under contract as late as August 30, 2010.

The tax credit is disproportionately beneficial to the central Texas markets where real estate values remain moderate compared to major metropolitan areas in the East and West. It is also important to lower cost downtown condo units. The $8,000 credit represents 40% of a 10% deposit or 20% of a 20% deposit on a new $200,000 unit.

Here are additional details on the proposed tax credit extension:

- First-time home buyers are eligible for up to $8,000 on the tax credit, which is the same as the current credit. The Senate version of the bill creates a new credit of up to $6,500 for homeowners who have lived in their homes for five years.

-The credits expire on April 30, 2010, but home buyers under contract by April 30 would be able to qualify as long as they complete the sale within 60 days.

- This is the third and likely last version of the credit. The original credit became available in mid-2008.

- The tax credit isn't available to everyone. It phases out for buyers with incomes above $125,000 for single filers and $225,000 for married couples and homes that cost more than $800,000 aren’t eligible.

- After 500 minors took advantage of the last credit, the new one is restricted to individuals 18 years of age or older.

AustinTowers: No More Site Security Problems

This was a rough week --- Due to problems with our hosting provider, Google listed AustinTowers as a "reported attack site" which generates warnings in most of the major browsers. We cleaned the site, replaced all files, and switched hosting providers and now we are clear. Sorry for the inconvenience and thanks to the readers who offered help! We're excited to be back!

W Receives Financing: Averts Crisis

The W Austin Hotel and Residences is an important project for downtown Austin. It's located at the heart of the emerging Second Street District. It's a $300 million multi-use project including a much-needed hotel, a prominent condo project, retail, and entertainment. It's the home of the new Austin City Limits studio.

Until this week, the failure of the project's primary lender has put the project in jeopardy. While the 37-story building has continued to rise past 25-floors with the developers investment capital, the project could not have been finished without a new construction loan. Unfortunately, these are tough times to get a construction loan for a condo project that is partially constructed.

This week, Austin-based Stratus Properties Inc., the developer of the W, and the Canyon-Johnson Urban Funds announced the closing of a $120 million replacement construction loan for the W Austin Hotel & Residences project. As part of the deal, the developers were required to add partners to raise an additional $45 million in investment capital. As a result of the financing, the project remains on schedule to open in December of next year with condo units being delivered to buyers through May, 2011.

"Our ability to secure a construction loan in the current economic climate reflects the strength and quality of this project and of the relative strength of the local Austin real estate market," said Beau Armstrong, CEO of Stratus Properties. "Unlike many markets, downtown Austin has a small supply of upper end condominiums - just over 400 units - and is not likely to have any additional new supply in the next five years."

The W Hotel and Residences is located on the City's "Block 21" in the heart of downtown Austin`s 2nd Street District. The building will include 159 residential units, 252 hotel rooms and suites, 18,000 square feet of retail and restaurants, 37,000 square feet of office space and a street-level plaza. Also unique to the project, a state-of-the art, live music venue that will serve as the new home of the world renowned Austin City Limits, the country`s longest running televised music series. The venue will be operated by Live Nation.

W Austin Residences will be located on floors 18 through 37, providing views of Lady Bird Lake, the Hill Country, University of Texas Tower, State Capitol Building and the downtown skyline. Homeowners will have access to all hotel amenities including concierge service, an 8,000-square-foot spa and fitness area, private pool and preferred access to property restaurants and the music venue.

Secret Congress Avenue Town Home on Market

Although not widely known, there are a small number of private town homes on Congress Avenue between 8th street and the Capital. They are well hidden --- when you walk by you would never know that these buildings are private residences. If you have $6 million, if you want to live downtown but need more space than the largest condos, and if you don't want to share your rooftop lawn and pool, this is the way to go.

Congress Avenue Town House Austin Downtown Town Home

811 North Congress is a 8,425 historic building near the Austin Museum of Art (AMOA) on Congress between 8th and 9th street. Although built in 1873, the building has been completely renovated for residential use with a cool, modern design. And since it is a historic building, the property taxes are discounted. The building is situated on 0.09 acres and contains 4 bedrooms with 5 full baths and 3 1/2 baths.

The pictures say it all:

Congress Avenue Town House Austin Downtown Town Home

Congress Avenue Town House Austin Downtown Town Home

Congress Avenue Town House Austin Downtown Town Home

Congress Avenue Town House Austin Downtown Town Home

Congress Avenue Town House Austin Downtown Town Home

Congress Avenue Town House Austin Downtown Town Home

Congress Avenue Town House Austin Downtown Town Home

Downtown_austin_congress_roof_top_pool

Congress Avenue Town House Austin Downtown Town Home

Recession Over in Austin: What Will Happen to Housing Prices

A new report from Moody's shows that Austin and 78 other metropolitan areas (out of 384 cities in the U.S.) moved from recession to recovery during the month of August. The report labels cities on a four level scale indicating (1) Expansion, (2) Recovery, (3) At Risk, (4) In Recession. Austin was rated as (2) Recovery. No city in the U.S. is rated as being in expansion mode which would indicate that the metropolitan area has grown beyond it's pre-recession peak economy.

In Texas, 7 out of 28 metropolitan areas including Brownsville, Harlingen, Dallas-Plano-Irving, El Paso, Lubbock, and San Antonio are listed as being in recovery. No metropolitan areas in Arizona, California, Connecticut, Florida, Washington DC, Hawaii, Delaware, Maine, Maryland, Nevada, New Mexico, New York, Oklahoma, Oregon, Rhode Island, Vermont or Wyoming showed signs of recovery. The parts of the country that have fared best are areas that experienced less of a housing cycle of boom and bust and that benefit more from relatively strong prices in oil and natural gas. This is certainly true of Texas.

Texas is ranked 6th in the country for economic performance with much better employment numbers and virtually no housing value decline. Austin, amazingly, is ranked 7 out of 392 metropolitan areas in terms of employment growth. The study notes that while housing prices have dropped in Austin, strong population growth supports demographically driven consumer demand and a well-educated labor force attracts high value-added tech businesses. On the negative side, competitive pressure of foreign high-tech manufacturing challenges local industry and the tech cycle adds to cyclical volatility of overall local economy.

The following year-over-year numbers compare Austin to Texas, California, and New York:


Austin

Texas
California
New York

Employment

-0.71%

-2.43%
-5.04%
-2.25%

Single Family Housing Starts

-6.31%

-19.11%
-21.05%
-23.82%

Industrial Production

-12.61

-12.69%
-10.09%
-12.15%

Growth Over Last 6 Months

+

-
-
-

So what does this mean for real estate values? Real estate values are driven by a combination of supply and demand factors including migration, employment, financing options, new construction, and general economic health. On the positive side, migration is strong, employment and general economic conditions are improving, and new supply (outside of downtown) remains lower than in the past. On the negative side, financing options are severely constrained, especially for jumbo loans and first time buyers. Also, the high tech industry -- which is a major part of the Austin economy -- continues to feel the effects of the downturn.

In summary, nobody is expecting values to jump in the near term. The worst, however, may be over and with mortgage rates low it may be a good time to buy. In downtown, the large number of unsold units means that buyers should continue to look for good deals resulting from over-supply and competition between developers and seller of existing units. When this supply is gone, however, it will be a while before new units are able to hit the market.

12-Floor "Capital Terrace" Development Proposed

A 12-story multi-use project near the Doubletree hotel on Lavaca and 14th street that was originally announced in 2008 is likely to rise next year. The developer, Palmco, is asking the city council on December 10 for a height variance to allow construction of the 163-foot tall building in an area zoned for construction of buildings as tall as 120 feet.

Palmco, the developer, is proposing that "Capital Terrace" will include apartments, offices, shops, five levels of parking, and a restaurant within just a few blocks of the Capitol. Two of the project's parking levels will be located underground. It would have 30 apartments designed for lobbyists and others with business at the Capitol, as well as five floors of office space.

While it is an unusually large project for the north end of downtown, the addition of extensive ground floor retail and restaurant space may help with the creation of a new walkable district. Today, there is minimal pedestrian traffic in this corner of downtown.

The site consists of four lots on just over one-fourth of a city block. There are four buildings on the site, but only one active lease. If they get the appropriate approvals, Palmco would start construction in the second quarter of 2010.


The Downtown Density Debate Resurfaces

Is downtown density a good thing?

That's the big question this month as the Austin City Council reviews proposals that would dramatically change the rules for downtown development.

Over the last decade, the City has freely granted density variances in order to get more people downtown. During this period, downtown has been the one place where density has been encouraged. In fact, it has been a key part of the City's downtown Austin strategy. There are many reasons why downtown density makes sense: the environmental impact is minimized, public transportation is easier, sprawl is reduced, and tax revenue is high compared to the services and infrastructure required.

Today, Austin is not a high density city: even the central downtown area is relatively low density compared to the core of other major cities. Of the top 25 cities, Austin is the 20th most dense city. In Texas, Houston, Dallas, and San Antonio all have higher levels of density than Austin. If you you think Houston is sprawling, than you probably won't like Austin in a few decades if current growth rates persist. El Paso is the only large Texas city with a lower level of density than Austin.

While many people question whether downtown development is good or bad, there is no better way to improve population density. A dense urban core is vibrant, ecologically-friendly, and traffic-friendly. It is the best antidote to sprawl. While downtown development won't stop sprawl in Austin, it is the first step in the right direction. It provides people who want to bike to work or walk to dinner with an alternative that hasn't previously existed in Austin.

This month, the city council will decide whether or not to add new requirements for projects looking for density variances in downtown Austin. If the new rules pass, developers (and their tenants) will need to pay for parks, music venues, low income housing, child care, elder care, or a similar community offering. These are all good things --- but they all cost money. If density is a good thing, these requirements will act as a tax on new projects, making new development less likely and will likely result in reduced downtown density.

Today, downtown property taxes subsidize suburban infrastructure and services. This makes sense --- downtown property is expensive and residents are more affluent than the Austin median. But it is also true that downtown living is very efficient from a city service perspective: it takes fewer roads, pipes, wires, police officers, sanitation workers, and other city staffers to support dense downtown development than it does to support an equivalent suburban population. For this reason, it seems that the city should encourage additional density --- and not tax it --- and use the tax money it generates to support other City needs, including downtown services. Reducing density and discouraging downtown development --- we're not going to see much downtown development in the next few years anyway -- is not in the City's best interest.