Nokonah Analysis: Part II

Two months ago, Austin Towers initiated a comprehensive unit-by-unit analysis of appreciation in the Nokonah. 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.

As we mentioned in Part I of our analysis, 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).

In part two, we've further examined the tax data and have come up with some interesting results:

- The average unit appreciated 61% over three years from $233/SF to $376/SF.

- Appreciation varied dramatically by floor: the higher the floor, the greater the appreciation. The strongest lesson is to stay away from ground floor apartments. at the Nokonah, the ground floor units appreciated by 30% while floors 2-5 appreciated by 58% and floors 6-11 appreciated by 77%. The highest appreciation was on the 11th floor which went up by 84% over the three year period.

- The largest units appreciated the fastest: units over 2,500 SF appreciated by an average of 70% while smaller units appreciated by an average of 60%.

- The smallest units (under 750SF) , even though they were on the lowest floors, appreciated at a faster rate than the mid-size units between 750 and 1,500 square feet. The most valuable unit on a $/sf basis, was unit 1002 at $498 / sf -- it is 697 square feet on the 10th floor. The third most expensive unit at $476 / sf was the largest unit -- # 1101 which is 4,459 square feet and currently valued by TCAD at $2.1M -- a huge jump from it's 2003 value if $1.1M.

As mentioned before, we are 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!