In July of 2007 we recorded 14 transactions at an average of $353psf.
In July of 2008 we recorded 11 transactions at an average of $289psf.
In July of 2009 we recorded 13 transactions at an average of $267psf.
In July of 2010, we recorded 12 transactions at an average of $314psf!!
What insights can we glean from four years of July transaction data? Based on my experience this year, I would say those numbers show that [in aggregate for downtown] a bottom had been reached, and we’re returning to normal where average prices hover around $300psf.
If developers reported sales (they don’t, but if they did), July’s closed Sabine units would nullify the effect of the higher priced closings at the Austonian, Spring, and Four Seasons. Also, at least two of July’s transactions were deeply discounted transactions at Milago and yet the average numbers are still strong.
The market continues to place a premium west of Congress Avenue, as transactions at Austin City Lofts and 360 condos exceed $400psf. Feedback from my clients indicate this premium is a reflection of these buildings’ proximity to a mix of retail uses and to Whole Foods. As inventories of new construction continue to dwindle, the average buyers’ expectations are beginning to come back inline with a healthy resale market.
An example of a great buy in July: Milago #423. A 2bd/2ba corner unit at tree level with city views for $300,000. The seller took a hit on this one and originally paid $382,500. Also, I’m bullish on the Rainey Street District, future improvements to Waller Creek, and the desirability of living near the trail for couples/families.
What does the buyer who prioritizes value do now? Be prepared. Get pre-qualified for a mortgage. Be ready to pounce on the random short sale or bank owned property. I seem to find 1-2 each month. Forget about foreclosure auctions in downtown – they simply do not happen with any regularity, and 99% of the time the bank takes back the property and lists it on the MLS market where they can get closer to market rates. Of course, you can go to the courthouse to see for yourself. Or, you can just contact me.