In a new report on the Austin housing market, Texas economist Ray Perryman analyzes the future of the downtown Austin condo market. With 40,000 new people moving to Austin each year and fewer than 4,000 downtown units planned over the next 5 years, Perryman believes that the market for downtown condos will remain strong.
Perryman’s analysis includes two key points. First, downtown is becoming an increasingly attractive place to live as the urban core redevelops. As traffic and sprawl worsen throughout the rest of the city, the more demand will increase for downtown units. The second point is that net migration into Austin is incredibly high with more than 40,000 new residents pouring into the city each year. If just 2% of new Austinites decide to live downtown, all planned downtown units will likely sell out.
Here is a summary from the Austin Business Journal:
The steel and glass residential towers set to reshape the downtown Austin skyline aren’t a pipedream. They’re coming–and they’re going to be filled, a new study shows.The analysis from Texas economist Ray Perryman suggests that while the nation battles a housing correction, Austin’s residential market remains relatively healthy. Moreover, says Perryman, there is clear demand among Austinites to live in the city’s vibrant downtown.There are currently about 6,000 people living downtown. And with about 4,000 residential units under construction or planned around downtown, that population is expected to double over the next two years. Perryman says with the Austin area adding more than 40,000 new residents annually, the local housing market will continue to fair well, and rising energy costs and traffic woes will drive a growing interest in urban living.”This housing market will fundamentally support the type of housing being developed downtown,” Perryman said at a morning press conference at City Hall organized to discuss the report. “There is an amble population to absorb these units.”Asked whether those who desire to live downtown could actually afford to purchase units, most of which are over $500,000, Perryman says the market is there, particularly among young professionals coming to the area making good money in expanding fields like technology. He pointed out that if less than 1 percent of the entire area population chose to live downtown, they would fill up all of the existing units as well as those being planned downtown.