The Austin Business Journal reports that a new research report questions whether some of the new condo projects projected for Central Austin will move forward under their original timelines, or at all, given the decline of available financing.
The report from Residential Strategies Inc. shows that there are more than 5,800 condo units planned or recently completed in Central Austin. Of those, about 2,500 units are currently under construction. But with more than 2,100 units anticipated in projects that have yet to break ground, the report casts doubt on whether some of those will be able to proceed given that "developers' ability to obtain financing for new projects has been significantly hindered by the current 'credit crunch.'"
The average per-square-foot value for local projects stands at $351, with the higher end of the spectrum topping out around $750 a square foot for luxury downtown high rises and units in East and South Austin valued at an average of $350 a square foot.
Nevertheless, the report seems to support the assertion among developers that demand for units is strong. Since presales efforts for the most recent wave of projects began in 2004, about 2,856 units have been committed. That averages out to 725 to 900 units annually--roughly twice the absorption Dallas experiences each year.
As for resales, Residential Strategies says about 1,045 condos or townhomes were sold in 2007, and the number of units sold was up in almost every price-point category.
Though Austin continues to fair better than other major markets in the current housing slump, the Residential Strategies report argues that the region is not immune to the ailing new home market conditions being experienced elsewhere around the country.
"The overall perception of the health of the new home market from prospective buyers will continue to present challenges for the sales forces at new condo projects," the report states.
A snapshot of several projects' sales/reservations through the end of first quarter 2008:
- Four Seasons Residences: 166 units total; 60 units committed.
- The Austonian: 188 units; 45 committed.
- The Shore: 192 units; 189 committed.
- Zilker Place: 74 units; 29 committed.
- W Austin: 196 units; 140 committed.
- SoCo Lofts: 69 units; 41 committed.