(By Dale King) AUSTIN — Condominium sales in Texas’ major metro areas increased during the first half of 2016 as baby boomers, retirees and millennials discovered revived downtown areas where workplaces, restaurants, shopping opportunities and entertainment spots have re-staked their claims, says the Condominium Mid-Year Sales Report released by the Texas Association of Realtors.
Austin, Dallas, Houston and San Antonio all experienced an increase in condo sales along with an increase in prices between January and May 2016 compared to the same six-month period last year. Townhomes in the same metro areas saw a slight decrease in year-over-year sales results, the report states.
“Many young urban professionals and newly retired baby boomers are buying condos, as they provide an affordable alternative to single-family homes and townhomes,” said Leslie Rouda Smith, chairwoman of the Texas Association of Realtors. “These millennials and retirees don’t want the upkeep of a traditional, single-family home and want to be close to nightlife and amenities.”
“This is the first time in the report’s history that condo and townhome statistics have been reported separately,” said Smith. “So we are not used to seeing it this way.”
“It’s kind of interesting,” she said, “that you can still get the older, existing condos for under $200,000. These are the ones predominantly located closer in town.”
“A lot of people don’t want the upkeep of a traditional single-family. They want to be close to the night life and the amenities.” Tied to this, she noted, is the desire of certain groups, particularly younger and older citizens, to find places that are “walkable. There is less stress and less commuting time.” For those living in the suburbs and work downtown, “it can take an hour each way to commute, and that’s on the days when there are no accidents.”
Several previous stories on the RealtyNewsReport.com website have discussed the concept of “walkability” of some downtown areas, making them more popular for residential growth among those looking to leave the suburbs. This factor has also been cited as a reason for the revitalization of employment, shopping, restaurant and entertainment venues in downtown areas and the desire of many to eschew suburban sprawl for the attraction of urban life.
Many millennials, Smith said, favor riding bicycles, another reason they flock to downtowns. Bike riding, as well as access to buses and commuter rail, are also linked to walkability. “My daughter also has a motorcycle which, thankfully, is currently not running.”
Smith said the report also found a “double-digit gain in the median price of condos in three or the four largest metro areas, excluding Austin.” In addition, it said, townhomes saw smaller price increases in three metro areas, with San Antonio experiencing a slight decrease. While the median price of condominiums and townhomes is still lower than single-family homes in most areas, the price-per-square-foot is significantly higher.
In Houston, specifically, “we are still seeing an increase in the condo market,” said Smith. “There has been a slight decrease in town home sales. A lot of young professionals, the newly retired and baby boomers are moving, just as in Dallas. Also, Houston has a much more vibrant downtown than it used to.”
“A challenge facing new Texas condo and townhome developments is that these types of housing, similar to single-family, are generally not being built for under $200,000 due to high land and labor costs,” said Jim Gaines, chief economist with the Real Estate Center at Texas A&M University. The “under $200,000 price range,” he said, “is best suited for first-time, entry-level homebuyers.”
But Smith said “properties under $300,000 are really moving off the shelf. We don’t measure them in days on the market, we measure them in hours on the market. My daughter listed a property at $199,000. After three hours and 45 minutes on multiple listing service (MLS), she had received more than 20 requests for showings and 11 offers to buy.”
A resident of Plano, just outside Dallas, Smith said she has lived in Texas for 32 years. “When I look back, I remember when the downtowns were not vibrant places at all. If you went downtown for a sporting event or a restaurant, that was it. Now, there are so many high-rises in downtown Dallas, it’s unbelievable. It has become a city of its own, with neighborhoods that are a lot safer than they used to be. There are a lot more people downtown.”
In addition, Realtors Association President Smith speaks proudly about a bit of legislation that has been passed by the U.S. Congress and is awaiting the signature of President Barack Obama. “Housing affordability is becoming a big issue in Texas,” she said. “That’s why Texas Realtors have worked tirelessly this summer to encourage Congress to pass a bill that increases the number of condos that are eligible for FHA financing.”
That legislation was adopted unanimously by the House and got the Senate’s OK just over a week ago.
“This is a positive step that many Texans need to own a condo of their own.”
July 26, 2016. Copyright 2016 Realty News Report