AustinTowers.net editor Paul D’Arcy was featured on a News 8 Austin Story on the state of the downtown Austin Condo market. In the interview, D’Arcy pointed out that many Austinites want to live downtown and that well-conceived projects in prime locations at reasonable prices continue to thrive despite the many challenges facing buyers and developers.
Here is the transcript of the News 8 Austin story (Original story and video can be found here):
Living in a condominium has its perks.
Lou Talamo lives at The Shores on Davis Street in Downtown Austin.
“I’m close to everything,” he said.
Talamo is one of a growing number of condo owners in Downtown Austin, and more are on the way.
According to the Sales and Marketing Director for The Shores and Four Seasons, Brandon Miller, demand is high.
“Of the 1,000 condos under construction, at least half have already been sold,” he said.
According to Austintowers.net Editor Paul D’Arcy, four downtown condos have been cancelled and seven are pending.
“Certainly, when I started this a year and a half ago it was boom time for condo projects. It seemed like every week another one was being announced. Since then, many of the projects have disappeared,” he said.
Plans for Aqua Terra Condos on Barton Springs are on hold as are plans for Sungari Pearl Lofts on East Fifth Street.
JMI Realty President and CEO John Kratzer said they’ve decided not to build condo units on top of the hotel they plan to build on Davis Street.
Kratzer said it all boils down to money.
“As you know, we had the meltdown in the sub-prime mortgage market last fall,” he said.
That’s why many lenders aren’t willing to invest in these major projects anymore.
“I would say you could count them on one hand across the whole country,” Kratzer said.
Those wanting to buy into the condo projects are finding it equally difficult, according to Melanie Taliaferro, Fairway Independent Mortgage Company loan officer.
“The big banks are starting to take a closer look and say, ‘Now before we lend anybody money to buy into these projects, we want to see that they are at least 50 percent pre-sold,” she said.
Miller said the stalling condo market could be good news.
“That means what is being built and what’s under construction today is all that’s going to be under construction. You’re not going to see any new building start up which means we are not bringing a lot of supply to Austin,” Miller said.
But D’Arcy said developers shouldn’t throw in the towel just yet.
“There still seems to be enough demand for those projects to be successful,” he said.