I’m blown away by the number of closings that occurred in October for new luxury condos in downtown Austin. Total number of downtown Austin condo transactions in October is confirmed at 29 30 closings! Resale data shows eight resale transactions, two of which were over $1MM. Here’s the kicker: there were a combined 21 closings at the Four Seasons Residences, Spring, and The Austonian!
I spent extra time this month confirming transaction reports at the top-tier buildings. “Spin” was minimal and there is genuine transaction velocity.
October Highlights:
- two $1MM+ resale transactions (not including developer sales at top-tier buildings)
- The Austonian shows 30 closed units, nine in October.
- The Four Seasons Residences shows 43 closed units, six in October.
- Spring Condos closed six seven in October.
- DANA’s Downtown Living Tour was the biggest ever with over 1000 attendees.
- W Hotel is hiring its staff, and buyers with contracts are anxiously awaiting their Q1 2011 move in date
One not so bright spot in the data: the number of resale transactions is down year-to-year, from 18 in October of 2009 to just eight this past month. The data below highlights last month’s aggregate sales statistics for MLS Area “DT”.
Investors and economic contrarians, like me, who demand value should continue to be on the prowl for deals on downtown Austin condos by focusing on the resale market. Especially during the winter months, increased seasonal buying power is evident. I’m working one short sale deal right now, and I’ve targeted others for my clients. For example, I’m tracking a 2bd/2ba at Milago that can be purchased for under $299,900 SOLD (inquire with me).
The average resale price remains steady at $294.55 per square foot, compared to $293.65 psf in October 2009. The chart below shows downtown resale transactions. Notice the spike in buying activity during the springtime. Now, notice the subsequent fall off… that’s a buying opportunity. 🙂
-Jude
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I’m seeing that, too. It’s resulting in sellers [those that need to sell] at great buildings like Austin City Lofts and The Shore having to drop their pricing to move their units.
I share with my clients that there are two markets in downtown. One is below $400 per foot, the other is above $400 per foot. When you drop below $500,000 the inventory is static – locked in with nothing new on the horizon. Above $500,000 and you enter the top-tier/luxury market and, as you said, all the attention is on the Four Seasons, Austonian, and W Hotel.
Now that units are closing, we are seeing transparency in Austin’s luxury condo market for the first time. That’s a paradigm shift, and it will be interesting to see how the market reacts. I expect it will affect the resale market positively.
Jude – great commentary. It’s interesting to notice the gap in closings between $500K and $1M in the resale market. I’ve predicted for a while that the Four Seasons, Austonian and W are capturing all the attention in that market.
We’ve been having great success with sales under $500K downtown, but only “tire kickers” looking at our listings above $500K. I get the sense many of those prospective buyers are waiting to see what happens to pricing in the three luxury buildings mentioned above, but we believe their pricing will remain substantially higher than the other bulidings downtown. Thoughts?