Wow! Strong April & May MLS Condo Sales & Price Appreciation

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for April and May, 2011and the results are very, very good. With 42 MLS sales during the two month period (and as many as 40 non-MLS sales in May alone), our twelve month tracking index showed it's highest average sales price ever: $368,929. The new record was the result of both price appreciation and a shift in mix to higher-priced units.

In April, 18 units sold for an average price of $387,508 -- a 29% increase in sales, 32% increase in average price, a 4% increase in $/SF and a 23% decrease in average days on market. While May sales volumes were level with last year, sales prices increases by 35%, $/SF by 15%, and average days on market dropped by 49% to 60-days. Overall, the units sold this year were newer, bigger, and more expensive than the units transacting a year ago.

April 2011 Condo Sales
Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Apr-10

14

$294,263

$273
1,061
1985
96%
128

Apr-11

18

$387,508

$284
1,302
1989
96%
98

Change

29%

32%

4%
23%
4.00
0%
-23%

May 2011 Condo Sales

Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
May-10

24

$258,967

$285
934
1976
96%
118

May-11

24

$349,329

$327
1,041
2000
97%
60

Change

0%

35%

15%
11%
24.00
1%
-49%

During the two month period, sales prices ranged from $100K to $1.2M. 7 units sold for less than $200K, 31 sold for $200K - $500K, 2 from $500K to $1M, and 2 units for more than $1M. The two units that sold for more than $1M were both in the Nokonah. It is interesting to note that more than 90% of sales were for less than $500K and that the big dollar transactions are almost all happening off the MLS in new projects like the Austonian, W, and Four Seasons.

The most units sold were in 360 -- the largest downtown Austin condo project and one of the most desirable -- with 12 units selling for an average of $392 / square foot. After 360, five buildings each saw 3 sales during the two month period: Sabine, Nokonah, Greenwood, 904 West Ave, and Milago.

As usual, private sales -- which are not reflected in the MLS data -- continued to close at Spring, Four Seasons, the W, and the Austonian. April and May are the beginning of the peak selling months and, so far, the trend looks good. Year-to-date, sales are up to 75 units over 71 last year thanks to a strong April.

See the full index here.


Exclusive: Building-by-Building Sales Analysis



We've received a few requests for detailed sales statistics by building. In response, we have re-run the 2010 MLS sales numbers to provide a more detailed picture of sales for all of the major condo projects -- at least all the projects that had at least two completed sales on MLS.

The statistics include the average price, price per square foot, size, sales price as a percentage of the asking price, and the average days on market. In addition, we've provided the sales statistics for the least expensive and most expensive unit sold in each project.

In 360, for example, 38 units sold on MLS in 2010 for an average price of $375,779 and an average $/SF of $378. Interestingly enough, the most expensive unit was a penthouse that sold for $1.45 million for 2,022 square feet or $717 / square foot. It's unusual to see such a high $/sf spread in a single project.

Here are the full building-by-building statistics for the top downtown Austin Condo projects:

360 Condominiums
38 units sold in 2010

Average Unit
Avg $: $375,779
$ / SF: $378
Avg SF: 960
% Ask: 96.9%
ADOM: 115

Least Expensive Unit
Min $ $240,000
SF 744
$/SF $323

Most Expensive Unit
Max $ $1,450,000
SF 2,022
$/SF $717


Austin City Lofts Amd
7 units sold in 2010

Average Unit
Avg $: $674,643
$ / SF: $373
Avg SF: 1,813
% Ask: 94.4%
ADOM: 100

Least Expensive Unit
Min $ $410,000
SF 1,482
$/SF $277

Most Expensive Unit
Max $ $1,050,000
SF 2,997
$/SF $350

Much more data after the jump!
Read More...

First W Austin Condo Sale Prices Hit MLS

As condos in the W Residences begin to close, the first two units have hit the MLS. For buyers looking at the W, this is one of the first public signals of the building's market value. The units were:

23rd Floor
1,169 Square Feet
1 Bedroom / 2.5 Baths
$570,984
$488 / SF

22nd Floor
3,498 Square Feet
3 Bedroom / 3.5 Baths
$2,035.000
$582 / SF

In addition, a second Austonian unit also appeared on the MLS list of February sales:

23rd Floors
1,609 Square Feet
2 Bedroom / 2.5 Baths
$950,000
$590 / SF

Exclusive: Condo Sales Soar in February

There is lots of evidence that the Austin real estate market should be improving: inbound migration rates are extraordinarily high. Job growth is back. Inventory is declining. Rental rates are soaring. February's sales provide the first evidence that the market may be improving.

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for January and February, 2011. In January, the market was flat -- 6 units were sold at a slightly higher average price but a slightly lower price per square foot. Average days on market was very long.

January 2011 MLS Downtown Condo Sales Statistics
Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jan-10

6

$274,547

$291
953
2005
96%
127

Jan-11

6

$289,650

$265
1,086
1989
98%
139

Change

0%

6%

-9%
14%
-16.00
2%
9%

February 2011 MLS Downtown Condo Sales Statistics

Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Feb-10

8

$291,938

$292
1,002
1979
94%
50

Feb-11

14

$460,327

$353
1,128
1996
97%
143

Change

75%

58%

21%
13%
17.00
3%
186%

In February, however, sales increased dramatically as units transacted soared by 75% from 8 to 14 while absolute prices and $/SF increased substantially. In general, the units were newer and bigger than prior year sales. The results included two sales at the W Residences ($582/SF & $488/SF) and one at the Austonian ($590/SF) which helped to boost the averages. In addition, four units sold at 360, two at Milago, and one at the Shore as well as one each in four older buildings: Cambridge, Greenwood Towers, Westgate, and Penthouse condos.

The February data shows how diverse the inventory has become: with sales prices ranging from $91,500 to $2,035,000, $/SF ranging from $189 to $590 and size ranging from 485 SF to 3,498 SF. Half the units sold were under $350K and half were over $350K. Four units sold for less than $200K and one unit sold for more than $1 million.

As usual, private sales -- which are not reflected in the MLS data -- continued to close at Spring, Four Seasons, the W, and the Austonian. January and February are typically slow months -- we'll watch closely as March results provide a clearer picture of the direction of the downtown Austin condo market -- and see if the acceleration is more than a one month trend.

See the full index here. (Note: original story corrected with updated data)

Exclusive: October Downtown Condo Sales

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for October, 2010. For the second month in a row, sales volumes fell far below the year ago level. With the sale of two high value units, however, average sales price spiked 28% to $571K.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Oct-09

13

$444,173

$323
1,376
1988.461538
94%
151

Oct-10

8

$570,625

$295
1,834
1995
96%
74

Change

-38%

28%

-9%
33%
6.54
2%
-51%

During October, 8 units worth a total of $4.6M were transacted on the MLS: 5 less than during the same period in 2009. The % ask increased year over year to 96% of the listing price.

Over the last few months, the vast majority of transactions have been for units priced below $300k. In the first nine months of the year, only four units of 130 sold were priced above $1M. In October, however, two units sold for more than $1M -- one in Westgate and one in 5 Fifty Five. The higher priced unit sold for $1.425 million -- the second highest downtown condo transaction that we have on record. In counter to the long-standing trends, only one unit sold in October was sold for less than $300k.

So where were the units that sold? Unusually, none of the units were in 360. Three were in the Shore and two were in Milago.

As always, the results show the weakness of the MLS. While 8 units sold through MLS, additional units went ton sale at the Austonian, the Four Seasons, Spring and other new projects outside of the MLS. While the MLS numbers slid in October, the market has grown year-over-year in 14 of the past 16 months showing increasing strength. As we have noted, as more projects hit the secondary market, MLS transactions are expected to grow and diversify. In particular, we expect to see more expensive units sell on MLS v. through private transactions in the new high end projects, That said, it is difficult to know exactly what is happening in the broader market as sales office transactions are rarely included in the MLS numbers.

Over the next few months, the MLS will grow to become more representative as new construction inventory dwindles and resale units in the Austonian and the Four Seasons Residences begin to hit the market.

See the full index here.



Exclusive: Strong August but Weaker September Downtown Condo Sales

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for August and September, 2010. After 14 months of year-over-year sales gains, sales volumes in September dropped to below their year ago level.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Aug-09

14

$252,029

$255
986
1987
93%
57

Aug-10

16

$330,088

$298
1,056
2004
94%
57

Change

14%

31%

16%
7%
16.07
1%
0%

Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Sep-09

15

$258,993

$307
845
1986
91%
81

Sep-10

12

$221,745

$282
786
1993
96%
113

Change

-20%

-14%

-8%
-7%
7.13
6%
40%

During August and September, 28 units worth a total of $7.9M were transacted on the MLS: 1 less than during the same period in 2009. While volume and price both increased in August and then decreased in September

Read More...

Exclusive: 30 Month Milago Sales Analysis

Over the last 30 months, 344 downtown Austin condos sales have been recorded on the MLS. Of these sales, an amazing 52 have been in the Milago -- more sales than any other downtown Austin condo project (360 is #2). Of course, MLS statistics exclude sales that aren't listed on MLS -- including almost all sales by the developer. As a result, the MLS statistics provide a clear picture of resale units but not initial sales.

When looking at resale volumes and quantities, the 52 Milago sales provide an interesting picture of the downtown Austin condo market over the 30 months. During this period, Milago sales volumes have decelerated from 2.1 sales per month to 1.9 sales per month and prices have dropped from $322 / SF to $266 / SF. The price drop occurred almost entirely in 2009. Fortunately for owners, prices have been relatively stable going into 2010.

Milago Sales Analysis: Sales Velocity

Year

# Sold

Units / Month
Avg SF

2008

25

2.1
1041

Read the full analysis here:

Read More...

Exclusive: Summer Downtown Condo Sales Stay Strong

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for June and July, 2010. With the new results loaded, we are pleased to announce that year-over-year sales volumes have increased for the 13th month in a row. In addition, more expensive units are starting to sell, prices are rising, and average days on market is dropping. The downtown Austin condo market continues to gain strength as it enters it's second year of growth and recovery.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jun-09

8

$431,738

$292
1,400
2000
87%
117

Jun-10

18

$387,241

$324
1,160
1999
95%
100

Change

125%

-10%

11%
-17%
-1.00
9%
-15%

Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jul-09

12

$265,450

$265
1,021
1987
97%
88

Jul-10

14

$338,192

$298
1,121
1999
96%
74

Change

17%

27%

12%
10%
12.00
-1%
-16%

During June and July -- key summer selling months -- 32 units worth a total of $11.7 million were transacted on the MLS: 12 more than during the same period in 2009. In addition

Read More...

Exclusive: 2009 Condo MLS Sales Review

With the help of urbanspace Realtors, we have put together a comprehensive analysis of recorded downtown Austin condo transactions in 2009. The analysis looks at MLS data capturing 2009 condo sales in area DT during the year 2009. Like all listing data, it excludes private transactions that were not listed on the MLS. This is a big exception considering that hundreds of units have been sold through non-mls sales.

The data does, however, provide a very clear view of the downtown resale market. It shows the price per square foot that buyers are willing to pay for real units, provides information on building-by-building sales prices, and shows how long it takes for units to actually sell. Here is the annual summary of 2009:

Market Summary - MLS recorded 112 downtown Austin condo transactions during 2009 (down 14% over 2008) with an average sales price of $329,374 (down 5%) which represents an average price per square foot of $298 (down 3%). Units sold for 95% of listing price in an average of 88 (3 days faster than 2008). For the second year in a row, the project with the most sales on MLS was Milago with 24 transactions (v 25 last year). Here are the details for 2009 with the comparison to 2008 in parenthesis:
- DT Condo Transactions: 112 (130 in 2008)
- Avg. Sales Price: $329,374 ($345,856)
- Avg. Listing Price: $353,311 ($362,750)
- Sold Price as % of Listing Price: 93% (95%)
- Avg. Sold $/SF: $298 ($308)
- Avg. Listing $/SF: $319 ($322)
- Avg. Days on Market: 88 (91)
- Avg. Unit Size: 1,126 (1,106) Square Feet

Old v New
- The MLS data clearly shows that the downtown Austin condo market is really 3 separate markets. The first market contains older units constructed prior to 1986 with an average age of 41 years. The second market is buildings constructed after 1998 when the current downtown boom started. The third market, which we have the least data on, is buildings currently under construction or recently completed. In particular, the high-end Austonian, W, and Four Seasons serve a much higher-end market than any of the current projects. Over the last year, sales of older units has plummeted as new buildings have entered the market. Sales of newer units are up dramatically. Prices for all units are down. Here are the details:
- Average Year Built, All Condo Sales: 1991 (1983 was the average in 2008)
- Units Built Before 1986: 40 (73)
- Units Built 1987 - 1998: 0 (0)
- Units Built After 1998: 82 (57)
- Pre 1986 Avg Sales Price & $/SF: $219,083 ($277,737) & $237 ($278)
- After 1998 Avg Sales Price & $/SF: $390,646 ($430,416) & $324 ($363)

High & Low: In a market and year where affordability is an important issue, it is amazing to see that there were 24 transactions under $200K which is a large increase from 18 units in 2008. It shows that it is possible to find affordable units downtown.
- Least Expensive Sale: $110,000 in Greenwood Towers ($107,000 in Greenwood Towers in 2008)
- Most Expensive Sale: $1,368,000 in the Nokonah ($1,100,100 in the Nokonah)
- Lowest $/SF: $162 for a unit in Greenwood Towers ($168 for a unit in Towers on Town Lake)
- Highest $/SF: $452 for a unit in the Nokonah ($571 for a unit in Five Fifty Five Condos)
- # Units Under $200K: 24 (18)
- # Units Over $750K: 5 (6)

Transactions by Month: Sales results were less cyclical than usual with strength in the second half of the year. Compared with 2008, the beginning of 2009 saw a dramatic reduction in the number of units and the back half of the year saw a strong increase over 2008. While there was strength in the back half of the year, it doesn't seem to have translated into higher prices. At Milago for example, prices were 3% lower on average in the second half than the first half.
Month - # Units
January - 4 (5)
February - 6 (6)
March - 4 (14)
April - 4 (22)
May - 11 (13)
June - 8 (13)
July - 12 (10)
August - 14 (13)
September - 15 (13)
October - 13 (9)
November - 13 (8)
December - 8 (4)

Over the next year or two, as a significant quantity of transactions continue to be conducted outside of the MLS, it will be difficult to gauge exactly what is happening with downtown Austin condo sales, especially on the high end. With a greater proportion of transactions shifting from private developer sales and auctions to resale and the MLS, we need to see increased MLS activity over the next year just for the market to remain stable. While lending remains constrained and the stresses of the economy remain strong, a dramatic near-term downtown condo upswing is unlikely. For sellers in particular, the next few months will continue to be very difficult.

With the addition of December data (it was a strong month), we've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index through the end of 2009.

Exclusive: November Condo Sales Volume Strong, Prices Moderate

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for November, 2009 and, for the sixth month in a row, MLS sales volumes have increased in comparison to previous year numbers. On a per square foot basis, year-to-date prices are down about 5% over the comparable 2008 numbers.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Nov-08

8

$460,973

$322
1,361
1989
93%
151

Nov-09

13

$292,018

$286
1,022
1995
96%
78

Change

63%

-37%

-11%
-25%
5.80
4%
-48%

In the month of November, 13 downtown Austin condo units were transacted on the MLS: 5 more than in November of 2009 with an 11% lower price per square foot. In addition, the % of asking price jumped significantly from 93% a year ago and 87% in June to a more typical 96%. Average days on market for units that sold came in at 78, an enormous 48% drop over last year. There are many units that have been on the market for a long time, especially larger and nicer units which have not been moving. The most expensive unit sold in November was $554,750. Continuing a trend toward lower priced units, nine units sold for less than $300,000 including a tiny 454 square foot unit that sold for $110,600.

Sold units were in seven projects including 360 (3), Penthouse condos (3), Milago (3), Five Fifty 05 (2), Railyard (1), and Towers on Town Lake (1). Units in 360 carried the highest price per square foot during the month with an average of $374/SF.

As always, the results show the weakness of the MLS. While 13 units sold through MLS, additional units went ton sale at tSpring and other new projects outside of the MLS. While the MLS numbers continue to show growth in transaction volume, it is difficult to know what is happening in the broader market as sales office transactions are rarely included in the MLS numbers. For example, no Spring units have appeared in any of the MLS sales reports this year.

See the full index here.





Milago: Detailed Comparable Sales Analysis

Over the last 22 months, AustinTowers has been working closely with urbanspace to track the downtown Austin condo market.

During this period, Milago has sold more units on the resale market than any other project . The 46 Milago transactions over the last 21 months provide an interesting microcosm of the downtown Austin market.

The numbers clearly show the challenges that the market has faced over the last year. Over the last six months there have been 16 Milago transactions averaging $268/SF. Over the previous 15 months, there were 29 transactions averaging $320/SF. This decrease represents a 16% market decline. During this period, average days on market increased 50% from 75 to 113 and the average discount from listing price increased by one point from 4.5% to 5.5%.

The 15 units sold over the last 6 months ranged in price from $175,000 for a 756 foot one bedroom unit on the 11th floor ($231/SF) to $372,500 for an 1,189 square foot 2 bedroom unit on the 9th floor ($313/SF).

Interestingly enough, the 2 bedroom units have commanded a per-square-foot premium over the one bedroom units over the last 21 months. During this period, 20 two bedroom units have sold for an average price of $368,923 ($309/SF) and 24 one bedroom units have sold for an average of $227,256 ($288/SF) representing a 7.5% per-square-foot premium for two bedroom units. In addition, one three bedroom unit sold in early 2008 for $368 / SF.

Finally, over the last year, 22 of the project's 240 units have sold representing 9% of the building's units. An additional 20 units are currently on the market which is equivalent to 10.9 months of inventory.

The good news for Milago owners is that the units continue to sell at a reasonably brisk pace and are relatively liquid. The large number of transactions means that comparable values have been firmly set making pricing key for sellers looking to move their units . For buyers, it means that comparative analysis from a realtor is key to ensure that you are not overpaying.

Exclusive: October Downtown Condo Sales

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for October, 2009. For the fourth month in a row, MLS sales were higher than the previous year's numbers. The most recent numbers suggest that the bottom of the downtown Austin condo market was likely hit this spring. Over the last few months, sales, prices, and price-per-square-foot have all been on the rise.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Oct-08

9

$456,839

$307
1,483
1991
94%
108

Oct-09

13

$444,173

$323
1,376
1988
94%
151

Change

44%

-3%

5%
-7%
-2.54
1%
40%

In the month of October, 13 downtown Austin condo units were transacted on the MLS: 4 more than in October of 2009 with a 5% higher price per square foot. The percentage of asking price remained constant year-over-year at 94%. Average days on market for units that sold came in at a painful 151, a 40% increase over last year and tied for the highest number on record.

As always, the results show the weakness of the MLS. While 13 units sold through MLS, additional units likely sold at Spring and other new projects outside of the MLS. In peak months, we know that dozens of units have been transacted outside of the MLS at projects like Shore, Spring, and 360. As ratio of resale units to units increases, the MLS will begin to show a more accurate picture of market transactions.

Over the last few months, an amazing proportion of sold units have been priced under $250K. This trend started to reverse in October as only 3 units sold for less than $250K v. 6 units in this price band during September. Similarly, 5 units sold for more than $450K including one for $915K in Austin City Lofts and one for $1.37M in the Nokonah. The Nokonah unit sold for $452/sf --- the highest $/SF we have seen on the MLS in more than a year.

All in all, the numbers show renewed strength in the downtown resale market. For the full details, visit the AustinTowers | urbanspace Downtown Austin Condo Market Index.

Exclusive: Strong October & September Downtown Condo Sales

In the year between the summer of 2008 and the summer of 2009, a typical month saw 8 downtown condo sales captured in the Austin MLS. In four of those months, only 4 units sold. In the best month, 13 units sold.

All of this has changed in the last two months. Between September 1 and October 31 -- a two month period -- 28 downtown condo units ranging in price from $110K (Greenwood Towers) to $1.4M (Nokonah) were sold according to the MLS. In September alone, 15 units sold during the month. This is the second highest number we have seen in the history of the index --- second only to the 22 units sold in April, 2008 during what was probably the market peak.

During the last two months, units have sold in a broad range of existing buildings including Greenwood Towers, 1700 Nueces, Railyard, Milago, Brown Building, 360, Shore, Westgate, Plaza Lofts, Brazos Lofts, Nokonah, 5 Fifty-Five, and Austin City Lofts -- an amazing cross-section of the downtown market.

While a handful of units sold for more than $500K, it should be no surprise that many of the units sold in lower price brackets. In fact, 17 of the 28 units sold for less than $300K and, amazingly, 8 of the units sold for less that $200K.

Here are some of the key statistics on the 28 units sold over the last 2 months:

Statistic
SF
Listing $/SF
Listing Price
Sold $/SF
Sold Price
DOM
Min

472

$189.15
$115,000
$180.92
$110,000
1

Max

3,025

$527.00
$1,400,000
$452.23
$1,368,000
600

Average

1,091

$320.89
$371,836
$300.08
$344,970
11

We'll update the index soon with all of the monthly data through October. . . stay tuned!

July Downtown Condo Sales Show Improvement

We've updated the AustinTowers | urbanspace Downtown Austin Condo Market Index for July, 2009 and, for the first time this year, MLS sales were higher than the previous year numbers.

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jul-08

10

$307,500

$279
1,098
1985
97%
106

Jul-09

12

$265,450

$265
1,021
1987
97%
88

Change

20%

-14%

-5%
-7%
2.00
0%
-17%

In the month of July, 12 downtown Austin condo units were transacted on the MLS: 2 more than in July of 2009 with a 5% lower price per square foot. In addition, the % of asking price jumped significantly from a June low of 87% returning to a more typical 97%. Average days on market for units that sold came in at 88, a 17% drop over last year. From an inventory perspective, months inventory droped from 33 months to 24 months -- a significant drop. This number, however, remains high as buyers seem to prefer units in new projects over MLS inventory.

As always, the results show the weakness of the MLS. While 12 units sold through MLS, additional units went ton sale at the Shore and other new projects outside of the MLS. While the MLS numbers continue to show a surprisingly small transaction volume, it is difficult to know whether sales were weakening or whether the most recent sales were simply closed off MLS.

A final observation is that the units that are moving are priced at less than $350,000. In July, 2 of the 12 units were priced uner $200K, an additional 7 were priced under $300K, and only 3 were priced over $300K with the highest priced unit fetching $350K. So far this year, there has only been one sale on the MLS for more than $1,000,000.

See the full index here.

EXCLUSIVE: Downtown Condo Market Surges

Over the last 8 weeks, the downtown condo market has taken a dramatic positive turn. After 20 tough months, buyers have begun snapping up units at a surprisingly strong pace.

While the MLS data shows 11 units having sold during May -- 2 less than last year -- the real story is much more dramatic. Since May 1, bargain hunters have put more than 40 units under contract at the Shore and another 20 in the Brazos Place auction. In addition, pre-sale units continue to move at the W and Spring. In fact, inventory numbers have dropped over the last month. If this rate continues, there could be a shortage of mid-price inventory by the end of the year.

As for the May MLS data, which does not include the Brazos Place transactions and does not yet include the Shore contracts, there was a 1% year-over-year increase in price per square foot and a 31% decrease in average days on market.

One-Month Sales Report







Month

Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
May-08

13

$297,792

$304
995
1969
95%
91

May-09

11

$347,045

$308
1,150
1989
96%
63

Change

-15%

17%

1%
16%
20.91
1%
-31%


May sales represented a surprisingly broad set of transactions with sales in Austin City Lofts, the Brown Building, Cambridge Condos, Milago, the Nokonah, Railyard condos, and three units in 360. The average price per square foot for the May 360 units was $360 per square foot.

While the 1-month data is inevitably a small sample, our 12-month rolling index echoes the trend, showing the lowest Average Days on Market reading of the year.

See the full AustinTowers | urbanspace Downtown Condo Market Index -- including the monthly sales and inventory reports and the 12-month rolling index here.

 

Exclusive: March Downtown Condo Sales Disappoint

We've updated the AustinTowers | urbanspace Downtown Condo Market Index for March and the news is not good. While month-by-month results fluctuate wildly, March saw a drop of 71% in the number of units sold -- from 14 units last March to just 4 this March. For the first quarter of 2009, sales dropped from 25 units sold in 2008 to 14 units sold in 2009.

Needless to say, March of 2008 was a very strong month. Amazingly enough, it wasn't a new project that drove last year's volume: sales during the month included 14 units in 11 projects including Milago, 5 Fifty Five, Brazos Place, Westgate, Railyard, Sabine, and the Brown building.


Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Mar-08

14

$355,004

$345
1,022
1977
94%
86

Mar-09

4

$431,625

$285
1,442
1985
94%
107

Change

-71%

22%

-17%
41%
8.00
0%
24%

On the bright side, this March saw sales of three units larger than 1,000 square feet including a 2,500 SF unit in the Nokonah. However, this 41% increase in avg. SF was accompanied by a modest 22% increase in average price As a result, $/SF dropped by 17%.

During the same period, Inventory dropped from 187 units to 183 units with an average listing price of $613K.

See the updated index here.

February, 2009 Downtown Condo Sales

We've received the latest monthly downtown Austin condo sales report from our friends at urbanspace realtors. Here are the results from February, 2009:

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.

January, 2009 Downtown Condo Sales


We've received the latest monthly downtown Austin condo sales report from our friends at urbanspace realtors. Here are the results from January, 2009 :

Month
Sales
Avg. Price
$/SF
Avg SF
Avg Year
% Ask
ADOM
Jan-08

5

$384,600

$315
1,172
1991
93%
73

Jan-09

4

$358,225

$321
1,129
1996
93%
85

Change

-20%

-7%

2%
-4%
5.00
-1%
16%

While 4 units is a small number no matter how you look at it, January has been a historically slow month for the downtown market. Last year, in a much healthier market, only 5 units were sold. While there were small price shifts, the sample is really to small to be meaningful

Most notably, the January results include the first two units from 360 to hit the MLS resale market. The units sold for an average price-per-square foot of $353 with an average of less than 30-days on the market. The sellers received 96% of their asking price.

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. Still, other market reports, have confirmed that downtown sales slowed during the final months of last year.

The full results and current inventory are available on the new AustinTowers | urbanspace Downtown Austin Condo Market Index.

New Market Data: 2008 Downtown Condo Sales Analysis

With the help of urbanspace Realtors, we have put together a comprehensive analysis of recorded downtown Austin condo transactions in 2008. The analysis looks at MLS data capturing 2008 condo sales in area DT during the year 2008. Like all listing data, it excludes private transactions that were not listed on the MLS. This is a big exception considering that 360, the Four Seasons, the Austonian, and the W have taken commitments for more than 500 units. During the year, approximately 400 units were sold at 360 alone.

The data does, however, provide a very clear view of the downtown resale market. It shows the price per square foot that buyers are willing to pay for real units, provides information on building-by-building sales prices, and shows how long it takes for units to actually sell. Here is the summary of 2008:

Market Summary - MLS recorded 130 downtown Austin condo transactions during 2008 with an average sales price of $345,856 which represents and average price per square foot of $308. Units sold for 95% of listing price in an average of 91 days. The project with the most sales on MLS was Milago with 25 transactions. Here are the details:
- 130 DT Condo Transactions in 2008
- Avg. Sales Price: $345,856
- Avg. Listing Price: $362,750
- Sales were 95% of Listing Price
- Avg. Sold $/SF: $308
- Avg. Listing $/SF: $322
- Avg. Days on Market: 91
- Avg. Unit Size: 1,126 Square Feet

Old v New
- The MLS data clearly shows that the downtown Austin condo market is really 3 separate markets. Read More...

Uh Oh. Austin Homes Sales Fall 39% in November, Prices Down 3%

Last month, at the peak of the national economic crisis (so far), Austin home sales dropped 39% from last November, dropping from 1,805 units in 2007 to 1,086 today. During the same one year period, the median sales price fell 2.9% from $185,200 to $179,900.

In looking at this data, it’s the sales volume that is the big news -- much more so than the small price drop. From a volume perspective, last month was the weakest November in 11 years. The number of transactions was roughly half the number 2-years ago during the 2006 market peak. While median sales prices dropped 3% year-over-year, it’s important to note that median price changes do not necessarily mean that home values have changed. The median price factors home sales prices and the mix of sales. So, if prices increase slightly but sales boom for inexpensive houses while sales fall on expensive house, the median price will likely decrease while house values may actually go up. In the current market, we’re seeing both ends of the market under unusual pressures: new home buyers have trouble getting credit and high-end houses are being hurt by very high jumbo mortgage rates.

The rapid drop in sales volume clearly reflects uncertainty about the ongoing economic crisis. While many forces effect sales --consumer confidence, mortgage rates, credit availability, net migration, and local employment --it is important to note that mortgage rates have dropped to a nearly 40-year low since the end of November, providing a very strong reason for buyers to jump back into the market and reverse the November trend.

For historical context, the following table shows November sales volumes and median sales prices in the Austin MLS for the last 15 years:

Year # Sold Median $
2008 1,086 $179,000
2007 1,771 $185,200
2006 2,141 $172,200
2005 1,975 $167,900
2004 1,630 $147,500
2003 1,362 $151,500
2002 1,304 $149,800
2001 1,388 $152,400
2000 1,245 $148,000
1999 1,340 $130,800
1998 1,222 $119,300
1997 1,004 $113,600
1996 861 $109,400
1995 928 $103,200
1994 727 $ 98,100

SOURCE:
TAMU

The numbers reinforce the point that sales volumes have dropped dramatically -- to 1997 levels -- while median prices have dipped just slightly, behind only last years record levels. Read More...

September Update: Prices Hold Steady

The September MLS statistics on sales of existing single family homes are out and the news is about as good as can be expected. During the month, sales of existing homes fell by 8 percent while the median price stayed flat. Notably, prices are actually up approximately 10% from September of 2006. While the rest of the country struggles with massive price erosion, the Austin market continues to hold its ground.

The news, in general, was stronger in some of the more central areas and weakest in the more distant high-dollar suburbs. In Area 1B, just west of downtown, prices dropped by 2.8 percent. In far out 8W, just outside the 360 loop South of the bridge, prices dropped by a whopping 26.4 percent.

While downtown condo numbers have not been published, the numbers tend not to be very useful anyway. Most new downtown units are never listed in the Multiple LIsting Service -- they are sold directly by the sales office -- and as a result they never hit the MLS statistics. The inventory of existing downtown condos remains very small and only covers a part of the market (existing buildings). As a result, the market statistics are not always representative of the downtown Austin condo market.

Here is a summary from the Statesman:

Sales of existing homes fell 8 percent in September, but the median price was flat at $182,600 — the first time in months it had not increased, according to the Austin Board of Realtors.

The year-over-year price drops included 2.8 percent in Area 1B, which includes Tarrytown; 7.6 percent in Pflugerville; 26.4 percent in 8W, the affluent suburbs of Southwestern Travis County; and 18.2 percent in west Georgetown.

Local real estate experts had been anticipating that prices would start to drop, as a near-record supply of homes for sale gave buyers plenty to choose from. New-home builders also have been offering aggressive incentives, providing more competition for buyers.

In other parts of the country where prices have been falling for months, sales have picked up sharply. For example, Southern California home sales jumped 65 percent last month as prices fell 33 percent to a five-year low.

In Central Texas, there were 1,670 sales last month. There were 1,520 pending sales — transactions in the pipeline — down 10 percent from a year ago.

There were 10,217 homes on the market, up 2 percent from a year ago.

Austin Real Estate: The State of the Market

With today's release of March real estate statistics, the Austin market posted its ninth consecutive monthly decline. While the news is mixed, the Austin market -- and Texas in general -- have fared better than most any other market in the U.S.

Still, it's not like it used to be. While the average sale price last month was up 5% over last March, sales were down 21% from the same period last year. Today, nearly 40% of houses put on the market are removed before they sell. Price per square foot has dropped by 4%, and the average discount from listing price for completed transactions has increased from 1.9% to 3.5%. It's worse everywhere else, but Austin is still feeling the pain.

A big question is whether there is a bubble in Austin. The consensus is no, although some price decreases are likely this year. The common wisdom is that the economy is strong, net migration is high, and Austin never experienced the boom that inflated values across the rest of the country. These three reasons are compelling, and they are often recited as the fundamental reasons why Austin is different.

Interestingly enough, Austin may be more exposed to a downturn than many experts recognize. The local economy is dependent on technology. This was made very clear during the dot com bust when migration patterns reversed, jobs were lost, and the housing market stalled. Months ago, Austin and San Francisco were named the strongest economies in the country based on the strength of the technology sector at the time. Since then, much has changed. Today, technology employers are beginning layoffs as the sector weakens. While nobody expects this downturn to be as bad as the last one, a tech downturn will effect the Austin market.

As for the second factor, this remains positive as Austin will continue to grow. Austin's buzz has never been hotter -- the Austin brand will draw people to town under almost any scenario. This migration will be an important buffer over the next couple of years. If this pattern changes, it is time to get worried.

The final "fact" about the Austin market -- that it skipped the boom -- is simply not true. While the broad Austin market experienced only modest growth over the last five years, prices in central Austin have soared. Between early 2005 and late 2007- just a little over two years -- prices for single family homes increased by 41% in Area 4 (Hyde Park), 43% in Area 2 (Allandale & north central Austin), 55% in Bouldin (near Zilker Park), and an incomprehensible 2-year gain of 83% in Area 3 which covers East Austin close to downtown. During this short period the typical central East Austin house increased in value from a median price of $168K to more than $255K. In Bouldin, price per square foot for the median house peaked at more than $300 / square foot in the second half of 2007 -- prices that make downtown condo projects look affordable.

Like any other market, it is difficult to believe that prices can nearly double during a couple of good years and then not retreat when the economy slides, mortgage rates rise, loan underwriting guidelines strengthen, and the national market implodes. While Austin remains stronger than almost any other market, central Austin prices may be at risk over the next year. While new condo prices are unlikely to go down -- they are too linked to costs -- any negative market change will certainly add pressure on developers as they try to complete the sales process for new projects.

Here is a summary from the Statesman:

Central Texas home sales continued to slide in March, falling 21 percent from a year ago, the Austin Board of Realtors reported today.March, which had 1,832 sales of existing homes, was the ninth consecutive month that home sales numbers dropped. And pending sales — sales expected to close in April — show that the slowdown could continue. Those sales fell 54 percent, the highest percentage on record, the report shows, to 1,349.Even with the slowdown, real estate experts assert that the Central Texas housing market is faring much better than most areas around the country. But the national housing crisis has jaded consumer confidence, and Austin has not been immune to the slowdown.The area’s median price of a single-family home for March increased by 5 percent year-over-year to $186,680. However, homes are taking longer to sell, with an average of 73 days on the market, an increase of 14 percent. With homes taking longer to sell, more homes are on the market, up 24 percent to 9,638.

2008 State of the Market: Updated Condo Sales Statistics

There is much speculation about the state of the Austin condo market. With lots of new projects, a national housing crisis, and no precedent for high-rise development in downtown Austin, the common wisdom is that all the new projects will fail.

With the revitalization of downtown, the rapid growth of the city, the strong local economy, and the lack of other downtown housing options, the common wisdom so far has been dead wrong. While some ill-conceived projects will likely never break-ground, those that capture the imagination of Austinites--and that are priced appropriately--will thrive.

Take the 360 project, for example. At 44-stories and 430 individual units, it is one of the most ambitious downtown projects. Today, with the skeleton complete, it is the tallest building in the Austin skyline. Set for completion this year, it is at the point where it needs to have sold 70-80% of units to be viable. Not only is the project now sold out with significant deposits, but there is waiting list with enough buyers for an additional 140 units. While some sales may fall through -- the fact of the matter is that demand has been extraordinary for 360. With great views, a great location, and competitive pricing, 360 shows how strong the downtown Austin condo market is for the right project. With this much demand, 360 buyers should expect to see strong appreciation on their units over the next few years.

A report this week from Residential Strategies provides additional details on the state of the downtown Austin condo market. The report, and other sources, provides the following snapshot of several projects' sales/reservations through the end of first quarter 2008:

* 360: 430 units total; 430 committed. 140 unit waiting list.
* The Shore: 192 units; 189 committed.
* W Austin: 196 units; 140 committed.
* Four Seasons Residences: 166 units total; 60 units committed.
* The Austonian: 188 units; 45 committed.
* SoCo Lofts: 69 units; 41 committed.
* Zilker Place: 74 units; 29 committed.

While different projects have different standards for reservations, the data clearly illustrates a few key market forces. First, near-term projects such as 360 and The Shore are doing great. Second, the most affordable projects are selling well, even if they are outside the downtown core. Finally, the ultra-luxury projects--many of which are still a couple of years out--remain the most at risk. While the Austonian, Four Seasons, and W have broken ground--many of the most expensive units may be the hardest to sell.

All-in-all, the news is good. With clear market data, there is no doubt that thousands of people are willing to live downtown. While some of the projects that have broken ground still have work to do, the projects that do break ground in this environment are likely to be successfully completed. While the local real estate market is far from perfect (though much better than the rest of the country), the state of the downtown Austin condo market remains strong.

July Sales: Central Austin Demand & Appreciation Remain Strong

July sales numbers are out and the news is very positive for central Austin. While the number of sales in July decreased for the city as a whole by 2% (even as prices increased 7% citywide) when compared to last year, the story is truly a tale of two cities: inventory is growing in the outskirts of Austin while demand remains very hot for central Austin. In central Austin, sales volumes are increasing, prices are going up, and inventory has been shrinking, It is a very strong market.

The best analysis of the market comes from Ki Gray and his blog:

If we look at the numbers, we saw a total increase in inventory of 1083 homes. If we break this down, we saw an increase of 1050 in outer Austin and an increase in inventory of 33 homes in central Austin. So this is an increase of inventory in the suburbs of 15 percent compared to an increase of 2 percent for central Austin.Another way to look at this is to look at months of inventory on the market:

All.........Outer Austin.......Inner Austin
3.57......3.91..................2.48

So in summary, the numbers for the Austin market are better than what we see in an average market (6 months of inventory) but we have slowed down a bit from the fasted pasted market that we saw last year. Also we are seeing central Austin again outperform the suburbs.



When analyzing these numbers, there are a few things to note. First, prices are increasing sharply in downtown neighborhoods: as much as 20-30% in the prime neighborhoods over the last year. Second, these statistics do not include the strong sales of downtown condos which are not listed in MLS. In fact, when these units are considered, it is possible that citywide sales actually grew in July. Finally, it is very important to note that these numbers do not reflect the dramatic changes in mortgage lending which occurred in mid- August. While iy will will take a few months to see the full effect of the current lending environment, it will be strong and negative. The good news is that Austin is better prepared than almost any other metro area: with a strong market and low inventories, Austin should ride the down market quite well.

Update: Further Analysis of June Sales

On July 20, June MLS numbers were released, showing the first drop in June sales in five years, even as prices rose by more than 7%. As the strength of the Austin market has defied national trends over the last year, it's natural to worry whether this might signal the beginning of the end.

In our first posting on this subject, we concluded that the negative statistics do not really effect the downtown condo market which does not include units below $130K where the most dramatic market changes seem to be taking place. Today, thanks to Ki Gray, we have much more detailed statistics to analyze.

These statistics allow us to look more closely at neighborhood-by-neighborhood sales details for the high end area closest to downtown. Here is what this new data shows:

In June:
- Price per square foot increased in June in 20 of 23 central austin neighborhoods analyzed by Ki

- In the 20 most central areas in the first Half of 2007 (v. the period one year earlier):
- Prices increased by 12%
- Sales volumes decreased by 15%
- Days on Market increased from 49 to 52

So what does this data add to the picture? As we stated previously, the culprit is clear when it comes to the change in the broader Austin market: the current sub-prime lending crisis means that many first-time buyers with borderline credit can no longer qualify for mortgages. This is resulting in a decrease in sales of low priced sales -- i.e. houses priced under $130k in Austin.

To our surprise, It does look like similar market forces are effecting the prime central areas. While there may not be many units priced under $130k, the same trend is occurring: sales volumes are dropping while prices are rising. The most likely interpretation is a strong broad market with weakness at the low end. The high end seems to be strong while sales of lower priced houses -- and not just units priced under $130K — suffering.

Will this effect the downtown condo market? The data suggests that it will: buyers with borderline financing qualifications will be excluded from the market. However, with strong price appreciation and low inventory, the numbers still look good for developers and buyers alike. But the thing to note is that the June statistics do show a change in the market which should be closely monitored in the upcoming months.


June Home Sales

June sales were announced today by the Austin Board of Realtors and the news is interesting: volumes were down 6% from June of 2006 while prices were up by 7%. This was the first June drop in volume in the Austin market in 5 years.

What is going on? Does this mark an end to Austin's defiance of national trends? How will this effect downtown condo sales?

According to the Austin Board of Realtors, the biggest volume change occurred with sales of single family homes priced below $130,000. This explains both the volume drop and the decrease in the median price. The culprit is also clear: the current sub-prime lending crisis means that many first-time buyers with borderline credit can no longer qualify for mortgages. This is resulting in a decrease in sales of low priced sales -- i.e. houses priced under $130k in Austin.

When low priced sales are taken out of the equation, it does seem that sales remain strong. One important thing to note is that MLS statistics do not include the many new condo units that have been sold directly by the developers without ever listing the units on the MLS. Since these numbers are not included in the Austin Board of Realtors' statistics, it is hard to know exactly what is happening in the market at large. The only thing we know is that the volumes and median prices would both be higher if all downtown condo sales were included.

In summary, today's negative statistics do not really effect the downtown condo market which does not include units below $130K where the most dramatic market changes seem to be taking place. But that said, any Austin real estate deceleration is reason for concern, especially after 5 consecutive years of sales increases.

Update: The Million Dollar Austin Housing Market


The big Austin downtown condo question remains: how big is the market for million $ condo units in downtown Austin?Some new market stats from Ki Gray of Escapeso Austin Real Estate provide some context on the high-end downtown market and it's performance so far in 2007.

Here are the number of houses that sold for $1 million or more by year and that were recorded in MLS in the Austin metropolitan area:

2004 - 152 houses
2005 - 213 houses
2006 - 341 houses
2007 - 181 houses (1st Half of 2007 Only)

The amazing thing is that the size of the market has more than doubled in just 3 years. As one of the fastest growing segments of the market, high-end inventory and demand have been rapidly expanding.

It remains to be seen how many high end condo units can be absorbed by the Austin market. In the Austonian alone, there will likely be more than 100 units priced over $1 million -- that is a lot of inventory in one building. The project's construction budget alone is greater than $1 million per unit which should provide an indication of the average unit selling price.

The good news for the high-end projects are that they are adding much needed downtown inventory in the fastest growing segment of the market. The bad news is that nobody knows how deep this market is -- or how many units can reasonably be sold in any given year,

The Strong Austin Home Market


Interest rates keep going up. Sub-prime lending has been cut back. The rest of the country is watching housing values drop. In Austin, however, it's a very different story.

May real estate statistics were released today and the numbers show a surprisingly strong market. According to the Office of Federal Housing Enterprise Oversight, housing prices in Austin are up 10% so far this year. According to MLS statistics released by the Austin Board of Realtors, the average number of days on market in May was just 55 days and the median sales price was $183K.

As we've mentioned before, these numbers provide a context for looking at the Austin condo market without providing the complete picture: many condo projects are privately marketed so that the units never hit the MLS and aren't included in the monthly statistics.

The Million Dollar Austin Condo Market


How big is the market for million dollar condos in downtown Austin? Developers are betting that hundreds of buyers are willing to invest $1 million or more on high end units in projects like the Austonian, 21c, the Four Seasons Residences, and in the condos at the W hotel.

To get a sense for the competition for million dollar homes and condos in the Austin market, I scoured current MLS listings for homes and condos currently on the market with asking prices above $1 million.

Surprisingly, there is an amazing amount of single family home inventory priced over $1 million:

Current MLS Inventory by Listing Price
$1M + -- 572 Homes
$2M+ -- 171 Homes
$3M + -- 70 Homes
$4M+ -- 29 Homes
$5M+ -- 12 Homes
$10M + -- 1 Home

And how about the Austin condo market? Currently, there are just 9 condos priced over $1 million in all of Austin. While the MLS numbers include projects that are being marketed directly without an MLS listing, the number is still amazingly low. While the number of houses in Austin with a Tax appraisal over $1 million has grown from 1,602 to 2,981 between 2005 and 2007, the million dollar market is the fastest growing segment of the Austin real estate market. While it remains to be seen if downtown Austin demand grows proportionally, it seems quite likely.

The Efficient Condo Market


If you buy a house in central Austin, the odds are that it is different -- in one way or another -- from every other house in central Austin. When it comes time to sell your unique house, you may get lucky and sell for more than it's worth, or you may be unlucky and have it sit on the market for a long time. Setting a price is a key variable, but pricing a unique house is as much art as science.

The issue is that the value of unique single family homes is subjective and highly personal. Every house, every street, and every aesthetic is valued differently. The single family home market, as one would expect, is very different from the downtown austin condo market.

Every high-rise condo project has a large number -- sometimes hundreds -- of interchangeable commodity-like units. Unit 16B is essentially identical to unit 17B. The result is a much more efficient resale market. When it comes time to sell a downtown condo, there will likely be similar units on the market. If they are cheaper, they will sell faster. If they are more expensive, the may never sell at all.

While the floor (the higher the better, stay away from the ground floor) matters and in some buildings the view can vary greatly from side to side, the effect on value is not as dramatic as one might think. Our ongoing analysis of Nokonah values and appreciation confirms this: units on floor 11, the top floor, are valued at just 11% more than units on the second floor. Buyers seem to pick a building first, and then look for the right unit weighing size and price. This approach leaves very little room for creative pricing.

Yet, it's amazing how differently sellers price similar units. The AustinTowers listings pages provide a few great examples of this. For example, there are two units currently for sale in the Nokonah: a 670 SF 1/1 for $450K and a 1,225 SF 2/2 for $550K -- the smaller unit is almost certainly overpriced.

Because it so easy to compare prices, downtown condo values will be efficiently set by the market. The building will make a huge difference, but actual prices will be set by your neighbors. This has some benefits and drawbacks. On the positive side, accurate comparables make it easy to set the right price and correctly priced units should sell quickly. On the downside, pricing may fluctuate more widely with supply and demand: when there are lots of people selling at the same time, it's likely that prices will drop. And there is very little chance to get lucky and sell your unit for above market value --- if a unit doesn't sell, the most likely reason is that it is overpriced.

Flipping in Austin?


Now that it is open and available for occupancy, the 240 unit Milago is completely sold out. Despite the fact that all units have been purchased, it is curious to see 30 units -- 1 / 8th of the building -- currently listed on MLS. While some could be from people whose plans have changed between when they signed the contract and now, the most likely option is condo flippers.

It will be interesting to see what happens. While the Austin market increased by 5% last year, this is hardly the sort of growth that gets flippers excited. Now, with 30 units competing for buyers, it will be interesting to see how fast they turn and whether prices increase as the market strengthens.

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...

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!


The Downtown Condo Market: 2003-2006

It's not easy to get a clear picture of downtown condo sales volumes. Real estate sales statistics are reported by MLS area, and the downtown area cuts across a few zones: Area 4 runs from Guadalupe to I-35. Area 1B runs from Scenic on the west to Guadalupe / Lamar. Both are bounded on the south by Town Lake and the north by 2222. There are also some projects south of town lake in Area 6. While most of the downtown units are captured in these statistics, there are also some units near the university, in Tarrytown, and in the other corners of central austin contained in area 1B and 4.

So what do the numbers show? Downtown condo sales grew from 2004-2006 by 33% while sales volumes in the larger Austin market grew by 27%. In fact, downtown condo sales as a % of all Austin condo sales actually shrunk from 31% to 25% during the same period. In 2006, a total of 619 condo units were sold in areas 1B and 4.

I draw three conclusions from the numbers: Read More...