We don’t watch much TV, so we missed this KXAN piece highlighting the potential shortage of new downtown Austin condos. The report claims 408. Downtown Austin Blog’s count is 475. I deal in downtown condos everyday, and this report is a little misleading. Reports like this ignore the approximately 175 downtown resales currently available for sale. Still, it’s very encouraging to receive some positive press reflecting the vibrancy of downtown.
Thanks to the Jdawgboy at SkyscraperPage forums for the heads up!
-Jude
So then what is the market like for those 400 or so luxury units. can they be absorbed, will we see auctions? Will any of the buildings sell out before they open?
The current market for these buildings works like this: There are buyers right now paying for a specific view, or floorplan, or the flexibility of combining units. We’re negotiating hard, and seeing deals with 10-15% discounts from asking. There are other buyers waiting patiently for better negotiating posture in a softer market – they are less concerned about having a specific space.
Until each building receives a certificate of occupancy, and we can observe the velocity of closings on the existing contracts, it’s challenging to gauge a market for a product that Austin is unfamiliar with (i.e. luxury urban condos).
I don’t expect they will sell out before they open unless they soften their prices in a blanket fashion come springtime. However, I don’t expect you will see auctions (with the possible exception of the attainably priced Sabine) as the financing for the Austonian, W, and Spring give them a couple of years before they need to repay the debt.
Good catch on the missing resale data. I don’t expect condos in Austin to be a scarce commodity for quite a while yet despite industry shills trying to create a frenzy. Bad job by KXAN.
I have a different perspective. The 408 units KXAN is referring to are luxury product. With the exception of the new units at 904 West Ave and the unreleased units at the Sabine, there are ZERO “attainably” priced units coming to market.
This is why I’m bullish on resales for the next few years.