Sam Archer

There was a great article in Business Week about real estate trends and looking at patterns in appreciation following artists moving into neighborhoods. Basically, it asserts that artists can act as the forerunner for re-development of neighborhoods and are a pre-condition in many cases setting the foundation for the run-up in appreciation of an area. The article mentions specific cities where this is the case and Austin's own eastside is among these. Below is the link to the article.

http://www.businessweek.com/lifestyle/content/sep2008/bw20080923_944330.htm

There are numerous ways to spot this trend in action, most of it just simply by driving around and being in transitional neighborhoods. In East Austin in particular, the early signs of this change were when the East Austin Studio Tour http://www.eastaustinstudiotour.com/ got underway - which has been around for over 5 years now. The seminal event in this case was the need for large spaces where artist could expand into (and ply their trades) with low overhead.

I'll try to expand on this topic in a future post.

Sam

My family and I just returned from a 12 day overland journey into Mexico for a pretty amazing adventure. There were so many incredible things to share about the special time that we spent there and the absolutely incredible beauty of San Miguel de Allende, Patzcuaro, Zacatecas and the Pacific Coast. I think the most profound thing was the way that we were so completely disconnected from the busi-ness of our daily lives and the way that we were able to really re-connect as a family. Our boys Niko and Gabe are now 8 and 12 respectively and it's pretty clear that we're living on borrowed time before the teenage years hit.

On that Friday we came back through San Antonio on our final leg to Austin from Zacatecas (a stunningly beautiful colonial city), and we tuned into the local NPR affiliate there and learned of the complete economic meltdown happening in the stock market and in the financial sector. What a change 12 days can make.

So what does this mean for the housing market? Well, the housing market has fared one heck of a lot better than the stock market generally on the national scale, and in a few pockets (Austin being one of them), the housing market has stayed pretty robust, thank you very much. There was an article that just came out the other day in Forbes that I'd like to share with you that gives you a picture of what's happening in Austin as a stark contrast to the rest of the country. Below is a snapshot and enclosed is the full article.

The economic storm sweeping the country has left Americans with few places to hide. But those looking to hunker down might want to head to Texas, where they can get the best value for their dollar. That's because Austin and San Antonio lead our list of places where your money goes farthest. Residents of both enjoy affordable housing and promising prospects for job growth in coming years.[1]

If you have any questions about the current status of the housing market in Austin or would just like to talk about what's happening in your neighborhood, I'd be happy to hear from you. Feel free to call me at 512-633-4650 or email me at Sam@ArcherAustin.com. I've invested in some new tools that I think will help give you a better picture of Austin on a per neighborhood basis - with data provided on a weekly basis. If you'd like to receive these reports on an ongoing basis so you can keep on top of local real estate trends let me know. I'm really excited to share this with you. Even if folks aren't thinking of buying or selling in the near term everyone seems to be perennially curious about the market. It seems to be handily outperforming the stock market at this point.

Thanks and be sure to check out my blog at www.samarcher.vox.com where I'll be posting timely information on real estate trends and resources. And if you want any tips on tips and tricks on driving to and through Mexico, let me know.

Sam

[1] Forbes Best And Worst Bang For The Buck Cities, 10/10/08

There was a really great presentation given by Charles Heimsath this week regarding downtown development in Austin and the condo phenomenon. I've Included below some of the key highlights of the report which can be found in its entirety at http://www.downtownaustin.com/news/

The analysis done by Heimsath identifies some very interesting early trends of who is buying and where they're coming from. In this analysis a full 2/3 are moving from another residence in Austin and only 19 percent are buyers from out of state. This is all very useful information and I've posted some of the most salient aspects of the analysis below. Given the rate of increase in condo development in downtown Austin, this information is very important to keep in mind both as a prospective buyer and as a real estate professional.

 Population of Austin has doubled every 20 years for the past 100 years

 16th largest city and 38th largest MSA in the U.S.

 Fifth fastest growing city, with a population increase of 4.3 percent in 2007, according to the U.S. Census Bureau

 Austin-Round Rock MSA had the eighth highest numeric population gain, with 65,880 new residents moving into the region in 2007

 1.5 million residents, 1/2 between ages of 18-44, median age is 4 years younger than national median

 8 colleges & universities with enrollment of more than 114,000

 An economically healthy Downtown benefits all Austin citizens as downtown-generated taxes pay for City services outside Downtown*

 Downtown is 1.65 square miles, or 0.6% of the total City of Austin land area

 Taxable value is $3.45 billion, or more than 5% of the City of Austin total taxable value

 An area of more than 8,000 acres would be needed to generate the same average taxable value on a per acre basis

 Downtown is currently home to 5,978 residents, hosts 67,000 daytime employees in the CBD and 90,000 daytime employees within a 1-mile radius of 6th & Congress

Currently there are 12 residential projects under construction in downtown Austin - 7 of the 12 are condominiums.

•Since 2000, 5,054 units - condos and apartments - have been completed or are currently under construction. Approximately half (51.1%) of those units are condos: 2,586 condosand 2,468 apartments

•As shown on the chart above, it took several years to confirm the market demand for downtown living. Only 1,004 units were built between 2000 and 2005. But once the market success was established, many new projects were planned and some of them are now coming to fruition.

 Condo demand is matching the dramatic increase in supply.

 Age of buyers is varied.

 Current residential location of most buyers (68%) is predominantly within the Austin MSA.

 Austin population continues to double every 20 years. People need residential options. Downtown condo and apartment living is an attractive alternative to suburban living. People moving downtown are making a lifestyle choice.

 A strong downtown residential market has a positiveimpact on retail and office markets. More than 2/3 of the buyers are moving into downtown condos as their primary residence.

Many new projects are limiting the number of investment purchases. Condo developments in cities like San Diego and Miami have suffered due to the high percentage of investment buyers.

It is interesting to note that 70% of buyers included in the survey do not work downtown. They are not choosing their residence based on proximity to work. They're making a lifestyle choice.

More than 2/3 of the buyers are relocating from another residential location in Austin. And only 19 percent of buyers currently live outside of Texas.

There's been a heck of a lot of residential development in Downtown Austin these days, so I developed a presentation that gives a picture of the scope of this change. If you'd like a copy of this presentation in a pdf format, definitely let me know.

Downtown Austin: A Landscape of Change
Courtesy of Sam Archer, REALTOR
512-633-4650

From the Statesman Letters to the Editor January 10, 2008
“I would like to build some condominiums at the Texas Capitol. Of course, the Capitol building can remain for character and whatnot”

Presentation Overview

• The Big Picture
• The Downtown Development Juggernaut
• Future Sustainability of Growth
• What’s Next?

The Big Picture

• Austin - 735,000 residents in 2007
• Austin is the 16th largest city in the U.S. and grew 41% in the 1990s.
• The area is projected to double in population in the next twenty years.
• More than 281,000 people live within 5 miles of the intersection of 6th Street and Congress Avenue, the heart of Downtown Austin.
  

Downtown Specific Stats

• Currently only 5900 people live downtown
• Over 363,000 people live in the primary market area of downtown.
• 16 CBD apartment and condominium projects are currently under construction (more are planned).
• When these buildings are completed, more than 4,300 new residents will move downtown, bringing the total population to over 10,000.
• There are 67,000 downtown workers in the central business district
• 90,000 employees work within a one-mile radius of 6th Street and Congress Avenue, the central hub of Downtown.
• 7 million people visit the area annually for conventions, trade shows and tourist attractions.
  

What’s Changing?

• Developers see this market as incredibly strong and a good investment
• Urban lifestyle attractive to the young, tech savvy and entrepreneurial spirit of Austin
• There’s more political will surrounding downtown development (Wynn’s 25000 goal). Efficiency of infrastructure use
• New Opportunities - Waller Creek Tunnel Project removing 1 million square feet from the flood plain
  

Downtown Austin Projects

What the Experts Say
“Condos may seem overbuilt, but they are not as out of balance as it seems,”
John Hockenyos – Texas Perspectives

What Does all this Mean?

• The downtown will continue to gain momentum as new urban focused businesses create more critical mass.
• Absorption may be a near term issue, not likely to be a mid term much less long term issue
• Significant opportunities to market services and products to high wealth urban dwellers

Questions?

• Should you have any questions about this report or about the real estate market generally please feel free to contact me.
• Cell phone – 512-633-4650
• Email – sarcher@cbunited.com