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Replies (16)
- Jeff Kessler, "TexasHomesBrokers"
- Contributions:75
Downtown Condo buying here is still new, but sales are going okay. They just had an auction at one of the condominium complexes and they are thinking of doing more.
The condo resale is a little soft as people just buy new instead of a used condo.
There are about 25 emerging projects coming online over the next 4-5 years, so there will always be an opportunity to buy.
There are still great signs about living and working in Austin so I believe people will continue to move and buy here.
I have sold condos downtown and worked for a builder as well.
Let me know if you need any help.
Thank you,
Jeff
The condo resale is a little soft as people just buy new instead of a used condo.
There are about 25 emerging projects coming online over the next 4-5 years, so there will always be an opportunity to buy.
There are still great signs about living and working in Austin so I believe people will continue to move and buy here.
I have sold condos downtown and worked for a builder as well.
Let me know if you need any help.
Thank you,
Jeff
- daveyjones2007
- Contributions:469
You should read this fellow's blogs carefully, and pay attention to the comments and statistics on condos, before buying one in downtown Austin.
http://www.escapesomewhere.com/austinblog/
Sales are very slow and inventory is large with lots more to come. I agree Austin has a good future but I don't think that means you should buy a condo right now. Unless boom times return you will not see this inventory clear in four years.
It would be a heck of a lot cheaper to rent a place over that period. At least then you have the flexibility to cancel if you find that you don't use it as much as you had hoped (a common experience for 2nd home owners). I don't think you want to be in the position of buying, not using it, then finding out the market is terrible and having to rent it out way below your monthly cost.
http://www.escapesomewhere.com/austinblog/
Sales are very slow and inventory is large with lots more to come. I agree Austin has a good future but I don't think that means you should buy a condo right now. Unless boom times return you will not see this inventory clear in four years.
It would be a heck of a lot cheaper to rent a place over that period. At least then you have the flexibility to cancel if you find that you don't use it as much as you had hoped (a common experience for 2nd home owners). I don't think you want to be in the position of buying, not using it, then finding out the market is terrible and having to rent it out way below your monthly cost.
- daveyjones2007
- Contributions:469
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- austinbubble .blogspot.com, "Mr. Bubble"
- Contributions:163
In retrospect, Davejones gave good advice. Downtown condo prices have continued to fall since his post.
- austinbubble .blogspot.com, "Mr. Bubble"
- Contributions:163
Do you sellers currently in the MLS at $400 sq ft hear that?
-Mr. Bubble
More at the link above...
-Mr. Bubble
February 28, 2010 21:22 Filed in:News
Today, more than 200 registered bidders showed up to compete for 31 units in the much anticipated Sabine auction. In the end, 29 of 31 units sold for an average 30.5% discount with a final price per square foot of $228. With strong demand, the developer added four units into the auction: three just days before the sale and the fourth unit during the auction.More at the link above...
- austinbubble .blogspot.com, "Mr. Bubble"
- Contributions:163
I agree with this author except for one thing. I don't think buyers will wait for rates to rise and the tax credit to expire to start offering less for real estate in Austin. That information will immediately be reflected in prices offered. In other words, prices have already cratered, that's why sales are scarce over 400k.
So to get out of the way the one positive factor this month, compared to last year at this time sales are up, Inventory is down, median and average prices are up. Sounds great right. But there is a huge huge caveat to that. January 2009 was the worst sales month in 10 years. And January 2010 is the second worst month in 10 years. Personally our sales were down in January and I thought we had just had a bad month. I was oddly relieved to see that the whole market was down.
Read the rest of this blog post via the link above...
So to get out of the way the one positive factor this month, compared to last year at this time sales are up, Inventory is down, median and average prices are up. Sounds great right. But there is a huge huge caveat to that. January 2009 was the worst sales month in 10 years. And January 2010 is the second worst month in 10 years. Personally our sales were down in January and I thought we had just had a bad month. I was oddly relieved to see that the whole market was down.
Read the rest of this blog post via the link above...
- Lindsay Lahrman Kelley, "LindsayLahrmanKelley"
- Contributions:20
Downtown condo buying in Austin has been plagued with the question of when will the market bottom-out. It will be the last to recover from the slump that we have seen in recent months. Think about resale and affordabilty. With that being said, I have some condos pocket listed that you can get a heck of a deal on...and they are near Zilker. If I was going to buy one, then this would be the place. Contact me if you want more info.
The definition of a real estate "investment" to me is an investment that cash flows. If it doesn't, it is not an investment, unless you have knowledge that the market is about to double digit appreciate, and you are anticipating selling the condo for a massive profit.
Condos typcially have high HOA fees, which you have to pay, in addition to principal, interest, taxes and insurance.
The way to go, in my opionion, is to get a feel for what you can charge for rent, how many new units are coming on the market, how many are being resold, and then decide if you will make money owning the unit and renting it out.
I have a great spreadsheet that I share with my clients that let's them figure out whether a condo or a home would make a good cashing flowing real estate investment.
Give me a call and I would be happy to share with you what I know.
Alex, 512-300-4289
Condos typcially have high HOA fees, which you have to pay, in addition to principal, interest, taxes and insurance.
The way to go, in my opionion, is to get a feel for what you can charge for rent, how many new units are coming on the market, how many are being resold, and then decide if you will make money owning the unit and renting it out.
I have a great spreadsheet that I share with my clients that let's them figure out whether a condo or a home would make a good cashing flowing real estate investment.
Give me a call and I would be happy to share with you what I know.
Alex, 512-300-4289
- daveyjones2007
- Contributions:469
Downtown condo buying in Austin has been plagued with far too much supply and high prices. I don't see the bottom as much of a question. Either they cut prices drastically or wait 10 years. There are comparable deals in San Francisco right now (not all over the place but you can find them) so there's your first clue. Plus there are still blocks of old houses in downtown waiting to sell to the next builder, so there is many years' more supply waiting in the wings. There is too much available land everywhere in Austin. Multiple competing projects at $300-1000/ft ain't gonna work itself out right away.
- daveyjones2007
- Contributions:469
Regarding the cash flow comment, I seriously doubt there are any downtown condos that come within 30% of break even when true market rents and costs are included. Show me one with positive cash flow, I'll eat my shorts.
- Charles Wheeler, "charlesmwheeler"
- Contributions:76
The condos on the South Side of Lady Bird Lake are very reasonable. Many of them are old (1960's and 70's) apartments that have been turned into condos. So, they are pretty ugly on the outside, but most units are very nice on the inside (very modern). I consider myself representative of the average Austin consumer and the idea of a condo is a bit odd. Texan's want a ranch house with a big back yard. Investment wise, it is a fine idea. I don't have a crystal ball, but your risk is pretty low, because anywhere close to the lake is a pretty easy rent. Worse case scenario you have to rent out your condo if you cant sell it in 4 years. Just try and find a good location with low HOA fees.
- Robert Guice, "ARC6676.com"
- Contributions:33
Austin is always a long term market. We have slow appreciation. Good thing about DT condos is that all the new ones are high end properties. You have to keep in mind that most of the condos DT are marketing to the higher end market. Lower priced condos are pretty safe as far as re-sale goes.
As Austin continues to grow and develops more DT it will catch on eventually. I have a condo DT and absolutely love it. The lifestyle is great.
Another fact to point out: although the condo sales may be struggling, the leasing market is thriving. Almost all condos DT are over 95% leased out now.
- daveyjones2007
- Contributions:469
Asked a friend in Austin if property values were still holding up okay. He said "realtors say yes but there's an article every day about another 5-10% state budget cut due to falling property and sales tax collections (no income tax here). That is really the ultimate evidence. Realtors say Austin is different and I agree except right now that difference is working in the wrong direction. Long term I like it though. Every Texan wants to live here some day. Problem right now is companies haven't followed suit so jobs are scarce. We have a lot of entrepreneurs which is rough in a downcycle like this. There is a TON of empty commercial space in this town."
- Robert Guice, "ARC6676.com"
- Contributions:33
There is a good bit of empty commercial space and I hear what your saying. One thing both good & bad is that we have a lot of self employed people who work from home.
As for commercial yes and no. Older developments struggle but newer ones (if in a popular area) tend to do well. Now is the time for the older commercial spaces to do some renovations to attract more business.
Note doubt the Austin economy is starting to feel the recession. Historically speaking Austin is usually the last to feel it - that's why the Austin real estate market is so great - its predictable!
Look at the charts and note California > Florida (Miami) > Colorado > New York > Austin. The lag time depends on severity but with a little research its clear as day.
- daveyjones2007
- Contributions:469
He suggested you get a copy of the latest Grubb Ellis report. Class A is almost 25% vacant, B is 17%, C is less than 15%. Downtown is over 16%. I forgot to ask him what a normal market looks like. Anybody know?
- Anthony Gibson, "Anthony Gibson"
- Contributions:1
The downtown market will still be growing in 4 yrs. We have seen more activity in the surrounding area of downtown. Barton Hills, S lamar area which have much more return potential since the established area.
How soft is the market for Condos on Town (Lady Bird) Lake?
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