Discuss Austin's residential market

[Solutioneur]

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[MightyYoda]

Why have construction costs gone up so much that a mid-range condo can't even be built for what people are willing to pay?

[Solutioneur]

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[MightyYoda]

Originally Posted by Solutioneur

This has been building (pun intended) for a while - total development costs now exceed the prices buyers are willing (and able) to pay for a luxury condo unit. With the exception of W and Austonian, most other recent buildings have dramatically altered the definition of "luxury." So, during the last 10 years the quality-finishes-amenities have gone down, while prices have gone up. At the same time, the market for high-rise condo living can afford $300-$400 per-square-foot, but Developers cannot deliver units at that price.

If Seaholm does switch from apartments to condos, the prices will be +$500 PSF (Average for the building) and it will be difficult to find enough buyers. The second problem is finding buyers willing to wait 2-3 years to occupy their new home. It's hard to finance speculation, especially when you ask your buyers to sign a contract (with some earnest money) and then wait a few years. Seaholm needs to find 280 real buyers willing to wait. Banks need to believe that enough to provide financing.

Maybe we should start a Thread about downtown condos versus apartments and shed some light on the development costs and schedule. Most realtors and brokers I know suggest there are thousands of buyers if the price is right - it's just the development community cannot deliver that product.

I guess I am just still confused as to why it is happening. Is this an Austin specific occurrence due to lack of construction workers (other projects), convoluted building code, or is it more national in scope?

[hereinaustin]

Originally Posted by MightyYoda

I guess I am just still confused as to why it is happening. Is this an Austin specific occurrence due to lack of construction workers (other projects), convoluted building code, or is it more national in scope?

Local bureaucracy + dollar inflation.

Source: http://www.measuringworth.com/ppowerus/
[It takes $1.25 (as of 2012 data) to match the purchasing power of $1 you would have spent in 2003 (the year the Frost Bank Tower opened). If 2013 data were available, the amount would be closer to $1.30.]

Edit: I found this link with current data: http://www.usinflationcalculator.com/ (Updated 9/17/2013)

[the Genral]

Rats....everytime I go to this thread I think the update will be about the Seaholm redevelopement...you know, new pics, architectural conversation, schedules...

[The ATX]

Originally Posted by the Genral

Rats....everytime I go to this thread I think the update will be about the Seaholm redevelopement...you know, new pics, architectural conversation, schedules...

Life is full of disappointments. I saw that the General made a new post and I went to check out what crazy new Avatar he had. But I already saw that one before.

[Solutioneur]

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[migol24]

Originally Posted by Hill Country

Life is full of disappointments. I saw that the General made a new post and I went to check out what crazy new Avatar he had. But I already saw that one before.

Speaking of avatars... yours are always dark and morbid but now you've got a really positive and colorful one.

And speaking of bad news... my mother is in the hospital. She's not doing too good but she is recovering.... so that's the only good news. I'm headed to Austin, on the plane now. I hope I have time to take some photos and bring them on here. I brought my Canon.

[MichaelB]

Originally Posted by migol24

Speaking of avatars... yours are always dark and morbid but now you've got a really positive and colorful one.

And speaking of bad news... my mother is in the hospital. She's not doing too good but she is recovering.... so that's the only good news. I'm headed to Austin, on the plane now. I hope I have time to take some photos and bring them on here. I brought my Canon.

Best thoughts for your Mother. I hope she recovers quickly

[jtown,man]

Saying we can't build high rises in Austin without it being 400-500 per sq ft is rediculas. What is different from Austin to Chicago or Atlanta? They both have built many high rises for much cheaper rents/prices than in Austin. In Atlanta's case it is MUCH cheaper to live in a high rise than in Austin.

I just feel like downtown Austin is a joke being played on young wealthier people by real estate developers looking to cash in. The city makes it no easier.

Why charge DOWNTOWN/HIGH DENSITY buildings a tax for affordable housing while a huge downtown-sized land area in the burbs pays no fee? What is the difference between a 600,000 dollar condo downtown or a 600,000 house in North Austin? Nothing. I have been in this city for a short time, but I can already see that the leaders here are self-destructive. They're idiots. We have unprecedented growth, we may never see this time of construction in the city and burbs again at this rate.

I think the city leaders need to check out cities of roughly the same size that AREN'T growing nearly as fast, and then complete a reality check. We should encourage highrise building. We should not tax them for building large, we should encourage them too.

I just don't understand the false lable of progressive city that taxes density and makes them run through months or years of hoops while a new suburban "community" goes up every week(yes, in the city limits).

[The ATX]

Originally Posted by jtown,man

Saying we can't build high rises in Austin without it being 400-500 per sq ft is rediculas. What is different from Austin to Chicago or Atlanta? They both have built many high rises for much cheaper rents/prices than in Austin. In Atlanta's case it is MUCH cheaper to live in a high rise than in Austin.

I just feel like downtown Austin is a joke being played on young wealthier people by real estate developers looking to cash in. The city makes it no easier.

Why charge DOWNTOWN/HIGH DENSITY buildings a tax for affordable housing while a huge downtown-sized land area in the burbs pays no fee? What is the difference between a 600,000 dollar condo downtown or a 600,000 house in North Austin? Nothing. I have been in this city for a short time, but I can already see that the leaders here are self-destructive. They're idiots. We have unprecedented growth, we may never see this time of construction in the city and burbs again at this rate.

I think the city leaders need to check out cities of roughly the same size that AREN'T growing nearly as fast, and then complete a reality check. We should encourage highrise building. We should not tax them for building large, we should encourage them too.

I just don't understand the false lable of progressive city that taxes density and makes them run through months or years of hoops while a new suburban "community" goes up every week(yes, in the city limits).

Well said.

[lovethecity]

Originally Posted by jtown,man

Saying we can't build high rises in Austin without it being 400-500 per sq ft is rediculas. What is different from Austin to Chicago or Atlanta? They both have built many high rises for much cheaper rents/prices than in Austin. In Atlanta's case it is MUCH cheaper to live in a high rise than in Austin.

I just feel like downtown Austin is a joke being played on young wealthier people by real estate developers looking to cash in. The city makes it no easier.

Why charge DOWNTOWN/HIGH DENSITY buildings a tax for affordable housing while a huge downtown-sized land area in the burbs pays no fee? What is the difference between a 600,000 dollar condo downtown or a 600,000 house in North Austin? Nothing. I have been in this city for a short time, but I can already see that the leaders here are self-destructive. They're idiots. We have unprecedented growth, we may never see this time of construction in the city and burbs again at this rate.

I think the city leaders need to check out cities of roughly the same size that AREN'T growing nearly as fast, and then complete a reality check. We should encourage highrise building. We should not tax them for building large, we should encourage them too.

I just don't understand the false lable of progressive city that taxes density and makes them run through months or years of hoops while a new suburban "community" goes up every week(yes, in the city limits).

I agree completely!

[the Genral]

I concur. And it seems to me like our city council still can't keep up with the times. They're like high school coaches trying to coach on the professional level.
Hill Country, your new avatar makes me sad....

[Solutioneur]

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[Solutioneur]

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[The ATX]

The Solutioneur is definitely LookingUp reincarnated. Market forces are at work. Stop whining.

[Solutioneur]

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[H2O]

Originally Posted by Solutioneur

It's just math, Hill Country. Nobody is whining.

This is apparently a trial-balloon to determine interest in condos at $500 PSF and there is very little info. If they're still apartments and this was just a name-change, we can watch your "market forces" together. It's fair to determine if these are luxury condos or just typical (Gables) apartments.

Urban Spaces tried this with Zom's Monarch apartments back in 2009. It stayed apartments. Expect the same here.

The Monarch condo conversion failed because they waited to the last minute to do it, and there was plenty of competition with other condo projects at the time. There is ZERO competition for moderately priced downtown condos currently.

[wwmiv]

Originally Posted by H2O

The Monarch condo conversion failed because they waited to the last minute to do it, and there was plenty of competition with other condo projects at the time. There is ZERO competition for moderately priced downtown condos currently.

Exactly. There are nuances here that Solutioneur obviously doesn't understand or refuses to acknowledge.