The #1 thing going for the downtown Austin Condo market is downtown Austin. In downtown Houston, where they also have a brand new crop of high rise condos, very few people want to live downtown. In the other neighborhoods where towers have popped up, picky residents can live nearby in larger, less expensive housing.
Here is a summary from the Houston Chronicle:
Even as single-family housing shows signs of momentum, Houston’s high-rise condo market remains stalled.
Developers who put up shiny new towers during the boom have filed for bankruptcy protection and others are renting their high-dollar units because they can’t sell them.
“In all of our projects, the market is really slow,” said Ben Lemieux of Group LSR, which develops condominium buildings in the Houston area under the name InnerLoopCondos.
Sales and prices of these properties have fallen every quarter over the past two years.
During the last quarter, sales were down 17 percent and prices were off 20 percent compared with the same period in 2008, according to data from the Houston Association of Realtors.
Brokers are quick to point out, however, that Houston is no Miami. There, tens of thousands of high-rise units sit vacant, casualties of the nation’s real estate crash.
On Houston’s Multiple Listing Service — which doesn’t include every building on the market — 486 condos are up for sale.
Unlike other cities whose condo markets cratered after investors bid up prices during the boom, Houston’s troubles had other causes.
For one, developers misread demand for this type of housing, said Giorgio Borlenghi, whose firm built two condo towers in Uptown Park before the market began to sink.
He believes there’s only demand for about 30 high-end units per year in Houston.
“If you have two or three buildings coming up at the same time, it will take some time to absorb,” Borlenghi said.
Still, not everything that was supposed to be built here was.
Some developers pulled out of the market after trying to pre-sell units — but not until after spending millions on sales centers and lavish parties.
They were encouraged by the city’s large population and the amount of wealth created by the energy industry.
But what they didn’t realize was that the price of a single-family house or patio home in Houston is often less than a high-rise unit just a few blocks away.
“It’s not housing you’re selling, it’s a lifestyle,” Borlenghi said. “And when you’re selling a lifestyle, it’s an even smaller market.”