What’s it like to be a single mom, or a married couple in downtown Austin? Take a listen…
The audio links above represent the latest radio spots from DowntownAustinFacts.com (link). I still feel compelled to qualify their proclamation that there are only 400 condos remaining. From one perspective, that number is insufficient to describe the number of units available for purchase. From another perspective, that number paints an overly rosy picture of what’s available to the average buyer. To elaborate further:
First, this number (400) represents new construction and doesn’t include the approximately 175 resales that are on the market.
Second, this number represents the inventory at four buildings: the Austonian, Block 21 Residences (aka W Hotel Residences), Residences on Town Lake (aka Four Seasons Residences), and Spring condos.
Third, how many new “attainably” priced units are available? Nearly ZERO – ok, there are five units at Sabine and two units at the Shore condos.
Let’s get this out of the way for the trolling skeptics… DowntownAustinFacts.com is a website sponsored by a consortium of builders. That fact doesn’t change the reality that downtown Austin is facing a shortage of condos for sale over the next 5-10 years, especially priced in the 200-400k range. THE INVENTORY IS LOCKED IN. You will not see any new projects come out of the ground until at least 2013, perhaps longer.
The HOA fees at the W, Four Seasons, and Austonian are going to keep many buyers away. While buyers can negotiate temporary waivers for HOA fees, the fees will eventually return to their ultra-high levels. The Spring is not in the ultra-luxury category with the others. I consider the Spring over-priced and predict even deeper discounts as they try to sell the last 20-30% of their units.
Mr. Bubble says
Why does everyone see this from the standpoint of the developer or seller? This is a great buying opportunity!
this is a great opportunity for buyers and sellers, not so much for developers. Fannie mae is putting a damper on allowing buyers and sellers to capitalize on the great opportunities however.
This is no good….Austin ranked 3rd for housing crisis forecast
This is a scary picture too…..
Just the other day I read some encouraging news about Austin market and here we go……
Irrespective of what these analysts say, I do think Austin housing market is over priced. If we need to sustain these prices, we better bring in more companies and more jobs, just ACL and SXSW will not do much help! We are a city of small businesses which will not support these prices, if we want to see any appreciation in prices or even sustain, city has to put in some ‘real’ effort to bring in some big companies that will create some well paying jobs, just a ‘nice’ city image does not take it too far. Austin should emerge as a serious business city and not just a fun place to hangout.
Jude Galligan says
Saint, what you might not see (what many don’t see) are the hundreds of off-market transactions that occurred with no advertising, no publicity, no MLS listings. I just can’t qualify “over priced” from my experience, at least in downtown where there were more buyers in 2009 than in 2008, and we sold out three buildings (Brazos Place, 360, the Shore*) for 20-30% under asking price, again all of this goes largely unreported.
For the first time in years, we have visible evidence of the City recognizing it must recruit companies. We need to land a couple of big ones, and I think we will.
the inventories at the in progress high end nearing completion buildings, the W, austonian, four seasons and Spring will encounter newer issues from fannie mae conventional guidelines.
Given the level of luxury, fha is out of the question, whats left? conventional financing.
Fannie Mae’s new guidelines for one require 70% of a building/condo project be pre-sold
#2 No more than 15% of a condo project units can be more than 30 days delinquent on condo fees. This is an existing guideline that is now being applied to new condo projects. The calculation was also changed from being 15% of the total fee payments to 15% of total units.
Those “400” units will be moving at a very slow pace unless prices are lowered.
If you own a condo in downtown right now, you are in leasing heaven
Let’s be honest, this is a campaign as Jude said put on by builders. The numbers they are touting have not changed at all in 6 plus months. Its just lazy marketing in not updating numbers.
I do think the Austonian is in a little trouble, but for the most part I think these 4 buildings will be over 70% sold by the end of 2011. Its just going to take more time and cut into developers profits, but IT will still happen.
To think that the Four Seasons or W will be selling units at under 300 a sq ft is very doom and gloom type thinking.
Mr Bubble says
There will always be 400 for sale if they don’t adjust prices. These new projects were conceived to sell and very high prices which no longer exist. Sabine was auctioned off at $218 sqft. I know, it has some problems but those are new condos. No condos will be selling at $450 sq ft.
I am being offered units, out of the MLS, in the $275-350 range in the newer buildings downtown. The party is over. Agents, you represent buyers and sellers. Figure out which one it is and advocated for honest pricing reflecting prices in the Obama economy.
Fred Schmidt says
As a “marketing guy”, the other aspect of the “only 400 condos left” campaign that I will point out is this: 400 was the number of units touted when that campaign first debuted with Will Wynn as spokesperson, when — around November? Or maybe January? Can’t remember exactly. Though suspiciously low as a number, I still felt like the campaign was effective because the message did represent a sense of urgency that (regardless of exact number) inventory was fairly low and no further new product was imminent for several years due to the credit crunch on construction loans. But now fast forward to today… I just heard that campaign resume again this past week — with the SAME “400” number being cited. That now tells me that ZERO units have sold over these past several months since I heard this previously! As a consumer, this message now tells me that those remaining 400 units must be way too expensive, overpriced, a bad deal, bad locations, bad views, etc. In other words: don’t bother checking them out…no one else has snatched them up either. Hmmm…
Jude Galligan says
To be fair, most of those 400 units are not yet complete, and downtownaustinfacts.com provides an inventory (pdf) of each building’s availability as collected by Capital Market Research. Spring is available now, and I can personally attest that they are making sales. The Austonian and Four Seasons will begin to close contracts in Q2. W later this year.
Going by the numbers in that document, Spring doesn’t seem to be in great shape. If they sold less than 50% in the first year(when you would expect to see majority of the sales), including pre-sales, discounts etc, that doesn’t show very well.
I continue to be optimistic about downtown Austin but these numbers bother me.