This past weekend I was showing downtown condos to clients. The weather was gorgeous. Seventy degrees, not a cloud in sky on Saturday. 

As of late, the focus is on new high-rise condos and lofts that are sprouting up all over the place. However, during our tour, something else caught my eye as we visited the historic Brown Building.

I immediately wondered, where are these sellers moving? And why?

Perhaps they are moving up and into a newer building or relocating to some other place. Maybe they are just testing the market to see if they can find an offer that will make them move. Or, they could be in financial trouble.

There’s no doubt the downtown Austin buzz is growing. It seems there are more than a few people considering a lifestyle change by moving out of the suburban areas and into downtown. Until recently, there hasn’t been a large supply of downtown residential space available. Predictably, demand for condos and lofts in the urban core continues to swell.

For example, the W Hotel & Residences saw 80 percent of their units reserved within a week of breaking ground and the sales center opening its doors (1 reservation = $10,000.00 deposit per unit). That’s remarkable given the expected completion date is still 3 years away… But even if you’re not willing to wait 3 years for your condo, there are at least 10 other projects under construction and roughly 2,000 units due to be complete by the end of next year. All of this begs the question… How much will it cost to own a downtown condo?

 AustinTowers rightly points out, “The price of a condo is only one component of the final cost. In addition, you’ll need to think about monthly condo fees, property taxes, utilities, etc. the good news is that the price is relatively fixed: unlike owning a single family house, you won’t need to worry about surprise maintenance projects like a new roof or new AC that can cost thousands of dollars.”

It is true condo owners don’t have to worry about as many maintenance issues when compared to owning a single-family residence. However, it is crucial for condo buyers to carefully investigate the financial health and viability of the owner’s association. Otherwise, you may be subjected to surprise assessments down the road. I will expand on this in a future post. 

Here is a breakdown of what you might expect to pay for three common floor plans in a high-rise condo development in downtown Austin. My assumptions are noted below the charts.

These calculations assume an average price of $350 / sq ft. Owner’s association dues are calculated on an average of $0.34 / sq ft. The mortgage principal and interest payment is based on a 30-year, fixed rate mortgage with a down payment of 10 percent at an annual interest rate of 6.25 percent. Assumes tax rate of 2.5% annually.

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Related Post :: Urban or Suburban: Where Should You Live

Last week the W Hotel and Residences officially broke ground. To be honest, it’s the first time I’ve seen the letter “W” downtown without an anti-symbol displayed with it. In fact, this seems to be a W that many Austinites are happy to welcome to town.

Block 21 of the 2^ND Street District is now the construction site of a $260 million dollar project that once completed, will be home to a 35 story, Platinum LEED-certified structure designed by Arthur Andersson of Andersson-Wise. Here’s what’s planned for the site: 

• 250 hotel guestrooms

• 196 condos  

• Austin City Limits Studio Theater (2,200 seats)

• Spa and Pools

• Signature bar and Restaurant

• 25,000 sq ft of ground floor retail space (The sales staff shared with me a list of possible tenants including Uchi, Eddie V’s, and a high-end grocer)

Unfortunately, I probably will not become a lucky resident of the W Austin anytime soon, but that doesn’t stop me from daydreaming about the legendary “Whatever/Whenever” service the home owners will enjoy. If you’re unfamiliar with the experience, W/W stands for pretty much anything and everything you could possibly request… so long as it’s legal, which some would argue is a relative term here in Austin… Here are few examples of that delightful W/W service:

“You’re at a dinner meeting and your beloved Golden Retriever is at home. Why not send us an email from your BlackBerry® and let us know? We’d be happy to take Ginger for a stroll around Lady Bird Lake.”

 “Your old college friend is in town for a taste of Austin. Where better to kick off the weekend than at the new Austin City Limits Studio Theater? Let us arrange for some last minute tickets.”

 “Long workdays rarely leave time for grocery shopping. Drop off your list in the morning and we’ll have everything in your fridge—from Belgian cheese to Oaxacan tomatillo salsa—when you return home.”

Overall, I think the project will be a positive addition to the 2^ND Street District and the broader urban fabric by not only improving a key piece of real estate to its highest-and-best use, but also uniquely contributing to the district’s growing sense of place.  City officials, I’m sure can already smell the sweet scent of tax revenue from Austin City Hall, across the street.

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“Austin’s efforts to create a denser and more active urban core have helped it land a major conference that will draw an estimated 2,000 attendees next year to learn what the capital of Texas is doing right. Austin has been selected as the host city for the 16th annual Congress for the New Urbanism, a leading national forum dedicated to advancing the urban density model and promoting alternatives to sprawl” (Austin Business Journal).

Why did they choose Austin? Here are 51 reasons. Email me to request a copy of the latest downtown emerging projects map and information regarding downtown living [Jason.M.Groves(at)gmail.com].

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 The Austin urban landscape has been changing drastically every day so far in 2007. We’re not developing at the rate of Dubai, but my how things are changing. Most of the attention lately has been focused on two new urban villages, The Domain and Mueller Redevelopment which seemed to sprout overnight, but my attention is elsewhere.

 I had the privilege of meeting with John Rosato, managing partner for Seaholm Power, LLC earlier this week. John spoke to me and a few associates at my brokerage about a future (re)development that will be focused around my favorite architectural landmark in all of Austin, the Seaholm Power Plant.

After hearing about the effort to preserve the historic, art-deco structure in addition to creating 275,000 sqft of luxury, residential condominium space (right on Town Lake), I couldn’t help but think about the many ways I will begin saving up for a down payment in 2009 when completion is expected. After studying the plans and talking to John, I believe this site will be particularly significant to the urban core of Austin as a result of the transit oriented approach the development team is taking. 

The Seaholm Power Plant has sat dormant for nearly 20 years. I’m excited to see the site will soon be restored and functioning as a power source for community building and social capital in Austin for many years to come. (Someone please inform Robert Putnam, we’ll no longer be Bowling Alone!)

John Rosato mentioned, “The units could cost from about $450,000 for about 1,200 square feet to more than $1 million for the largest 3,000 square foot units.” So maybe I should’ve said, ”Those who can afford the down payment won’t be bowling alone…” I’m hoping to get the Seaholm pioneer discount.

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The project plans call for 128 condominums and aproximately 10,000 sqft of retail space across from Chuy’s, near Sturzig street. No renderings have been released.

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