Austin Projects & Construction

[GoldenBoot]

Originally Posted by crewer

Sounds good up front, but think in terms of price per square foot here guys, not the overall price of a unit. 120K may sound reasonable at first glance, but I'll hold judgement until I see the unit's square footage. They're talking efficiencies, which can range anywhere from the size of a dorm room to something reasonably sized.

Also, and I hate to be the negative thinking guy here, but I feel a storm brewing. I've been sitting in a housing market that has been so DAMN out of control for the past 5 years with people outbidding each other as much as a 100K or more to grab a house or condo. Now that some of these regional bubbles are starting to cool, you have a huge number of vulture investors who have pulled their money out of bubble markets and are looking for the next place considered undervalued, like Austin, where they can make their next killing. My bet is that most of these "affordable" condos will sell very quickly during the preconstruction phase of marketing. And then you're going to see the flipping occur once construction nears completion, and these investors won't be selling those units for 120K, either.

You may also see developers hold onto a fair number of the units until after construction to monitor appreciations on the pre-sold units. If an investor can flip his new condo for 30 or 40% above the preconstruction cost, the developer will do the same on the remaining. It's all about money, and you can wave goodbye to Austin's affordable downtown housing.

The only way this is avoided is if the developer puts some strict guidelines on resale in order to discourage investor buying and encourage home ownership. Will that happen? Who knows.

I really hope I'm wrong, because downtown Austin desperately needs some sort of "affordable" housing. But having been on the frontlines of an out-of-control bubble market, I'm skeptical of the planned outcome. Or maybe I'm just cynical.

Crewer, you hit the nail on the head!