Analysts Say Austin Continues to Defy National Condo Trend
[AUSTIN, TX]
By Faith McGee
High-rise condominiums stretch their shiny edifices across Austin's downtown skyline. Million dollar units gleam from windows and anticipate their new owners lining up to pay top dollar prices. But this question remains: Will they have to wait along with other national condos before they see a lick of furniture? This city in the heart of Texas has 4,000 units either constructed or planned, but will buyers meet the demand?
The real estate market refuses to slow down due to the influx of West Coasters, large corporations moving in and growing, and income increase. However, other cities have demonstrated this growth cycle and later shown the demand for condos turned into a trickle. Current projects have turned a blind eye to the lesson Austin learned in 2000 when the real estate market experienced a slump, and present day construction have reached for the stars in categories of cutting edge technology and amenities. While the national condominium market stays at a steady decline from banks tightening their loan process and refusing clients who they determine to be a liability. Only fifty percent of real estate loans go through banks, which have cut potential condo owners in half.
Austin's notoriously bad traffic prompts the incentive to live downtown, because of the dearth of office workers and booming business district. Also, Austin locals are hoping to maintain their small town atmosphere by discouraging more sprawls. The South Congress district is only a couple heartbeats away from downtown, which marks the epicenter from "Old Austin". The laid-back atmosphere of the "Soco" district remains quite untouched from the metropolitan ambiance of Austin's downtown.
Smaller units are the first to go selling between price ranges in the $200,000's to $300,000. Be that as it may three to four bedroom condominiums are tougher with price tags in the $800,000's to the $900,000's. Specifically the Novare Group's 44-story complex houses smaller-units in the upper $100,000's to the upper $500,000's, and are 90 percent pre-sold. Additionally, some developers are claiming that the market will not be able to meet the demand for condos in the Navare Group's price range.
The delay in construction has also proven to benefit the market. Many of the "wait-and-see" buyers will be aroused to buy when the market proves to be holding its end. Even some complexes have switched from apartments to condos due to outlook of perspective buyers. Perhaps only the higher priced units are the ones to sweat even in this promising market. On the other hand the healthy job market may affect how these multi-luxury units get bought resulting in an upswing after the market levels out.
Austin ranks as one of the top-rated markets in the country. Condo buyers benefiting from $140,000 a year incomes can easily gain loans to afford $600 a square foot units. But will people spend their hard earned money for apartments to be close to the action and the nightlife of the city, enjoy the unique culture that is Austin, and experience the luxury of high-end restaurants and boutiques. Only the next couple of years will be able to tell, but assuredly the lower cost condominiums will continue to pre-sellout and become investments for those brave enough to put faith in the market. If you were to ask one of those lucky enough to walk to their business office, and than saunter over to one of the local premium grocery stores, they may convince you that convenience is worth it's weight in gold.
Austin Condos
By Faith McGee
High-rise condominiums stretch their shiny edifices across Austin's downtown skyline. Million dollar units gleam from windows and anticipate their new owners lining up to pay top dollar prices. But this question remains: Will they have to wait along with other national condos before they see a lick of furniture? This city in the heart of Texas has 4,000 units either constructed or planned, but will buyers meet the demand?
The real estate market refuses to slow down due to the influx of West Coasters, large corporations moving in and growing, and income increase. However, other cities have demonstrated this growth cycle and later shown the demand for condos turned into a trickle. Current projects have turned a blind eye to the lesson Austin learned in 2000 when the real estate market experienced a slump, and present day construction have reached for the stars in categories of cutting edge technology and amenities. While the national condominium market stays at a steady decline from banks tightening their loan process and refusing clients who they determine to be a liability. Only fifty percent of real estate loans go through banks, which have cut potential condo owners in half.
Austin's notoriously bad traffic prompts the incentive to live downtown, because of the dearth of office workers and booming business district. Also, Austin locals are hoping to maintain their small town atmosphere by discouraging more sprawls. The South Congress district is only a couple heartbeats away from downtown, which marks the epicenter from "Old Austin". The laid-back atmosphere of the "Soco" district remains quite untouched from the metropolitan ambiance of Austin's downtown.
Smaller units are the first to go selling between price ranges in the $200,000's to $300,000. Be that as it may three to four bedroom condominiums are tougher with price tags in the $800,000's to the $900,000's. Specifically the Novare Group's 44-story complex houses smaller-units in the upper $100,000's to the upper $500,000's, and are 90 percent pre-sold. Additionally, some developers are claiming that the market will not be able to meet the demand for condos in the Navare Group's price range.
The delay in construction has also proven to benefit the market. Many of the "wait-and-see" buyers will be aroused to buy when the market proves to be holding its end. Even some complexes have switched from apartments to condos due to outlook of perspective buyers. Perhaps only the higher priced units are the ones to sweat even in this promising market. On the other hand the healthy job market may affect how these multi-luxury units get bought resulting in an upswing after the market levels out.
Austin ranks as one of the top-rated markets in the country. Condo buyers benefiting from $140,000 a year incomes can easily gain loans to afford $600 a square foot units. But will people spend their hard earned money for apartments to be close to the action and the nightlife of the city, enjoy the unique culture that is Austin, and experience the luxury of high-end restaurants and boutiques. Only the next couple of years will be able to tell, but assuredly the lower cost condominiums will continue to pre-sellout and become investments for those brave enough to put faith in the market. If you were to ask one of those lucky enough to walk to their business office, and than saunter over to one of the local premium grocery stores, they may convince you that convenience is worth it's weight in gold.
Austin Condos
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