The Austin skyline has changed dramatically in the past two years as numerous high-rise luxury condo buildings have been built throughout downtown. With thousands of square feet of new residential space becoming available at the same time that the national real estate market has turned downward, the obvious question has been “Will these condos sell?”
Evidence so far has shown that sales are brisk and the new condo units are seeing success that ignores the national trends. The Austonian, The Four Seasons, The Spring, and The W together bring 736 new units to the market. Of those, 389 have been sold or are currently under contract, with prices holding steady. Shonda Novak of the Austin American-Statesman recently provided an in-depth look at the downtown condo market. Here are some highlights and excerpts from her article.
Despite coming to market during the worst national recession in decades, the newest projects have managed to hold their own.
“The market in the past 12 months is far stronger than what we experienced in the previous year,” said David Ward, executive vice president for Atlanta-based Post Properties Inc., which developed the Four Seasons Residences with Ardent Residential. “The fear that was prevalent during the depth of the downturn has been replaced by confidence.”
At the Four Seasons, 77 of the 148 units are sold or under contract, the developers said. The count at the other projects: 70 of the 178 units at the Austonian; 158 of 247 at Spring; and 84 of the 159 at the W, where the first buyers will be able to move in within a few months.
At the Four Seasons, where prices range from $400,000 to $4 million, Ward said pricing “has been very stable.” The Austonian has even raised prices on some units.
In general, sales activity “has been surprisingly good, given the very high price point of this latest wave of condominium construction,” said Charles Heimsath, a local real estate consultant for many downtown developers. Heimsath noted that the average asking price among the four projects is just over $1 million.
Aside from a recovering economy, the developers of the new projects have two other things in their favor.
One is that most of the projects targeted very affluent buyers. Heimsath said a fairly high percentage of buyers in the four new projects paid cash for their units, which are second or third homes for some.
Another is the absence of new competition. As lenders turned off the spigot for new construction during the downturn, several proposed projects have been postponed or shelved.
When construction started on Spring that year, Zuniga said, “we thought we would be 70 percent sold at completion.” But she said those expectations were adjusted when the recession hit in 2008, and the project ended up with about 35 to 40 percent of its units spoken for.
“We are currently selling at a much faster pace than we thought we would be in 2008,” Zuniga said. “We just hit the 60 percent sold mark, and the pace of sales continues to increase. \u2026 We are making five to 10 new sales every month, and we expect to see this number increase as the economy continues to improve and consumer fear continues to lessen.”
To see the complete article on the Austin American-Statesman website, click here.