Exclusive: Full Year Analysis of 2011 Downtown Austin Condo Sales

The Annual AustinTowers | TOWERS Realty Condo Sales Report
2011 Analysis: Downtown Austin Condo Sales

2011 showed new market strength as volumes, prices, and $/SF rose broadly across the market. With the addition of new, high-end inventory at the W and Austonian, the market saw increased breadth with more sales in mid and high-price bands. Sales were up 16% from 2010 and 74% over 2009.

With very few new condo units on the horizon, inventory is rapidly decreasing as more units are selling quickly at prices close to the asking price. By almost any measure, it’s the strongest downtown Austin condo year in recent memory. If interest rates stay low and lending standards continue to return to more normal levels, 2012 should be a strong year for condo resale and condo values.

With new pricing records set throughout the year — and a few big dollar unit sales — the average condo price rose an amazing 13% to $388,157. During 2011, 195 downtown condo units sold — not including additional non-MLS sales at the Austonian, W Residences, Four Seasons, and Spring — for a record average of $329 / SF. Unit sizes were unchanged from last year and slightly newer, continuing a four year trend that has moved the average year of construction from 1983 in 2008 to 1996 today.

While the year ended strong, it is important to note that much of the increase in value, and a small part of the increase in volumes, comes from the expensive new units that sold in the big new projects. Not all existing buildings saw the same market average price appreciation: there were winners (Nokonah +16% $/SF, Milago +8%, Towers Town Lake +7%) and losers as well (Brown Building -11% $/SF, Brazos Place -11%, Cambridge Condos -8%). Buyer preferences seems to be favoring newer, nicer, taller buildings.

Downtown Condo Sales: 2008 – 2011

A close look at the 168 recorded MLS transactions revealed the following highlights:

• Once again, 360 was the downtown project with the most sales (46 this year, 38 last year)
• 360 values, a good benchmark of the health of the market, were unchanged $377 / SF vs. $378 last year
• The newest projects had the highest $/SF: $620 / SF at the W, $557 / SF at the Austonian, and $436 at Spring
• The average time to sell a condo was 83-days, a 17-day decrease from 2010.
• 7 units sold for $1 million or more during 2011 compared with 8 in 2010, 2 in 2009, and 1 in 2008.3 of these units — including two priced over $2 million — were in the W. There were 2 sales each in Austin City Lofts and the Nokonah. There were likely many more unreported non-mls $1+ million sales in the Austonian, W, and Four Seasons.
• Despite a higher volume of sales, there were fewer values to be found. In 2011, only 27 units sold for less than $200,000 vs 38 units in 2010. The least expensive condo sold for $91,500.
• Units sold the fastest in Greenwood (29 days) and Milago (31 days) and slowest in Plaza Lofts (260 days) and the W (156 days).

While 2011 far exceeded 2010 results, it is also worth noting that the market was stronger on almost every dimension than the peak market in 2008. As we look forward, it seems that 2012 will most likely be defined by a continuation of the trends that we have seen over the last year: constant inventory, slow but steady sales at the new high-end buildings, a sell-out at Spring, a reduction in inventory priced below $200K, and a broadening of the resale market for larger, more expensive units.

Over the next few weeks, we’ll continue to provide detailed analysis of 2011 results, including a full analysis of building-by-building performance.

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