The April 2019 Real Estate News Roundup

First Quarter Housing Starts Up Over 2018

First quarter Central Texas housing starts were up almost 7 percent year over year, according to Metrostudy, which tracks the local housing market. Metrostudy reported that Austin-area builders began construction on 4,294 homes from January through March. This represents a 22 percent increase from the fourth quarter of 2018, when 3,518 homes were started, according to Metrostudy. The data indicates that more than half of the first-quarter starts were in the $200,000 to $300,000 price segment.

Could Downtown be at Capacity in 20 Years?

A report released recently by the Downtown Austin Alliance suggests that, based on land availability and building restrictions, downtown Austin could reach capacity within the next 20 years. According to the report, 58 downtown projects are currently under construction or planned, adding to the 70 million square feet of existing development. New development consists of more than 6,000 residential units and nearly 3,000 hotel rooms. More than 93,500 employees work downtown.

Penn Field Office Space to Open Early Next Year

A new office building will open in early 2020 in the 16-acre mixed-use Penn Field development on South Congress Ave. The two-story building, under construction now, could accommodate a single tenant or a tenant on each 21,000-square-foot level. The developer, Los Angeles-based CIM group, says the new building’s design will be in line with the existing repurposed warehouse and industrial buildings, according to the Austin American-Statesman. Now home to offices, restaurants and shops, Penn Field was established in 1918 as a World War I military airfield.

Millennials Turning to Smaller Cities for Home Ownership

Priced out of big-city markets, millenials are buying homes in smaller towns, according to CNBC. Cities such as Madison, Wisconsin, Grand Rapids, Michigan, Omaha, Nebraska, Salt Lake City, Utah, and Durham, North Carolina, are seeing explosive millennial growth, and these 23- to 38-year-olds are putting down roots. El Paso, too, has seen a spike in millenial home-buying, and one might wonder if other, smaller Texas towns might be next. San Marcos, perhaps?

Austin Development Targeting Younger Buyers

Speaking of millennials, builder Wes Peoples is targeting this group of consumers with his Gracy Groves at Gracy Farms infill development near the Domain in north Austin. The 25 single-family, detached homes will be offered this summer at prices from the high $300,000s to the $400,000s. Not far from Facebook, Amazon, HomeAway, Indeed, Schwab, Apple and other millennial-heavy employers, the development is certain to attract its target.  

Miami Beach’s Famed One Star Island is Back on the Market

Grammy-winning singer Gloria Estefan has relisted her waterfront Miami Beach compound at a reduced price of $32 million for the 8,000-square-foot property on Star Island, an exclusive spot that draws A-list celebrities. The two-story Floridian-style home sits on 1.34 acres, and features a separate guest house, 240 feet of water frontage, and a private dock. The main house has 5 bedrooms and 4.5 bathrooms, while the guest house has 3 bedrooms and 3 bathrooms. The buyer of this home will also have the opportunity to work with famed architect Carlos Ott to modernize the home.

Sales of Luxury Homes Declining

Estefan’s timing, however, may not be stellar because sales of “luxury” homes, those listed at $2 million and above, fell 16% in the first quarter of 2019, the steepest annual decline since 2010. At the same time, the supply of these high-dollar homes was up 14 percent, the fourth consecutive quarter of annual inventory increases. Furthermore, average prices of luxury homes are falling, as well. Interestingly, according to the  Federal Reserve Board Survey of Consumer Finances, the majority of the wealthiest Americans don’t live in a luxury home. In fact, 21% live in a home valued at less than $250,000, and close to one-third live in one worth between $250,000 and $500,000. Only 16% have a home worth $1 million or more.