Recently I represented a tenant for a downtown rental. In doing so I got an education in the downtown apartment market. Downtown Austin is/was known for its recent addition & occupancy of several new high rise condos and with more to come.

What did escape my attention were the new apartments: the Monarch, Legacy & Ashton that were also opened. What a surprise when I found some of those buildings with over 95% occupancy rates. This coupled with rents averaging $2000 for a one bed/one bath apartment that got me to thinking about pent up demand.

While lenders have all but disappeared and mortgages are hard to come by, condo loans are all but non existent except for those with 20-25% down. Qualifying for single family home loans while stringent is still achievable with 5-10% down. So this means a lot of new renters downtown that may eventually want to buy.

When qualifying for a condo mortgages does improve there may be some latent demand. This will not signal the start of a new speculative era of real estate but may show steady growth in the medium priced downtown condos in the coming years.

The Austin American-Statesman says on its front page (11/26/2008) that the real estate slowdown has even hit condos in downtown Austin. While this event has been anticipated for more than a few months, the admission – or revelation – may seem shocking to many.

From a real estate buyer’s angle, nothing could be better. If you are considering a condo downtown or near downtown there is a holiday sale going on – deep discounts are available.

Baron Rothschild (1871) is credited with the saying “the time to buy property is when there is blood in the streets”. Panic and uncertainty create opportunity.

There may be blood in Austin’s downtown streets today.

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If you’re thinking about buying a downtown condo…existing condos generally are offering better value than new or very recent ones. Long-range investors have some attractive opportunities, for several reasons:

• Existing condo projects are largely sold out, reducing the pressure on prices
• Existing condo prices are based on a historical sales, not hypothetical future ones
• Homeowners Association fees may be lower and/or more stable because they’re shared out among a larger number of owners
• Many new and very recent condo projects are in the luxury price range

In short, they have more measurable value than presales or recently offerings. Still, existing resales are discounted from 15-25%.

If you believe the stock market anticipates future economic activity, now may be the time to buy. Real-state investment trusts are down 50% from their highs, so real estate assets may be a bargain.

Lots of cranes. Many new projects are now underway and some have recently closed. Some of the announced downtown projects are still scrambling for funding. If you are looking for a downtown condo you would do well to consider some of the older established projects such as Plaza Lofts and the 5fiftyfive. The Brown Building and Brazos Place Condos are close to great restaurants, the Capitol, downtown entertainment but more moderately priced than the new condos coming online.

Austin offers other condos than the downtown highrise options. The outlying townhouse or condos in the central Austin area are usually lowrise buildings that may offer downtown views, small yards and a definite neighborhood feel. Many are located within walking distance to shops and restaurants. South Austin offers many possibilities and others are now being built in the great older neighborhoods, such as Old Enfield.