More downtown condos coming? Here’s what the experts say
Sept. 4, 2014
Anna Hardeman, The Boutique Real Estate
Anna Hardeman of The Boutique Real Estate tracks downtown condo sales and says more inventory is needed — in the right category.
Is the downtown Austin condo market heating up after years of being stagnant?
It might seem so now that the Seaholm LLC residential tower is 80 percent sold nearly a year before it’s finished. Listing broker Kevin Burns of Urbanspace is confident the entire project will sell out in the next few months. It’s just a matter of going through the remaining waiting list of 2,000 people to close out the 30-story tower. More about that amazing statistic and the buyer profiles will be published in the Sept. 5 weekly edition of the Austin Business Journal.
But how are condo sales overall at the moment and what’s the prospect for more condo development when much of the construction activity downtown has involved more easily financed apartment projects?
Anna Hardeman, broker and owner of The Boutique Real Estate, crunched some numbers for us, and Charles Heimsath, president of Capitol Market Research, weighs in on the prospect of new for-sale product.
According to Hardeman, thus far 209 downtown condos have sold this year. Compare that to sales completed by Sept. 30, 2013, when 157 condo sales had been recorded. The pace is definitely picking up.
“We need more condos downtown, but they need to be the right kind of condos,” Hardeman said.
In her estimation there are four tiers of product from the highest end luxury condos, which include numerous amenities — such as The Austonian or the W Residences, to the more affordable entry-level projects with few amenities — such as Avenue Lofts and the Railyard Condominiums.
“What we need is the Tier 2 stack,” Hardeman said.
Tier 2 communities, she said, “are higher end buildings minus all the fanfare. (They have) understated luxury.”
She classifies Nokonah, Austin City Lofts and the 555 Condos above the Hilton in that category. The finishes are premium, but the amenity package is not over-the-top. Thus, homeowner’s association dues are lower than the top tier. The proposed Fifth and West Residences that will be built by Riverside Resources falls into that segment, Hardeman said.
“There’s really a lack of this type of inventory currently,” she said.
Could that niche demand encourage new condo development or condo conversions downtown?
“It’s not likely that any of the large downtown properties will convert in the foreseeable future, but I would expect to see more small central core properties convert over the next few years,” Heimsath said.
Though more new condo development likely will evolve, he said, it won’t be on par with the current apartment boom.
“The demand is evident but financing is still difficult,” he said.
Here’s a look at more of Hardeman’s research for the first six months of 2014.
• 157 condos sold
• 55 condos currently on the market
• 78 one-bedroom condos sold
• 73 two-bedroom condos sold
• 8 three-bedroom condos sold
• $119,250 least expensive one-bedroom condo sold (Greenwood Towers)
• $799,000 most expensive one-bedroom sold (W Residences)
• $179,000 least expensive two-bedroom condo sold (Greenwood Towers)
• $1,675,000 most expensive two-bedroom condo sold (W Residences)
• $665,000 least expensive three-bedroom condo sold (Towers of Town Lake)
• $2,537,500 most expensive three-bedroom condo sold (W Residences)