(Ed.: The following was cross-posted to Downtown Austin Blog. Thanks to Jude Galligan for allowing me to publish this on his site.)
Anyone who knows what a construction crane looks like knows that downtown Austin experienced phenomenal growth between 2000 and 2010. The 2010 Census confirms what we could see: census tract 11 (which includes the CBD and Rainey Street) more than doubled in population, from 2,386 to 5,512. And that excludes dense developments that most would consider part of “downtown,” including Gables Park Plaza, the Monarch, Spring and Nokonah, all within Census tract 12. Add these and Downtown’s growth was even more impressive.
Another way of visualizing Downtown’s growth is to look at the block-by-block change in density.
Here are the downtown city blocks circa 2000 (left) and 2010 (right). Higher density is darker shaded.
The Rainey Street district (the roughly triangular tract jutting from downtown’s southeastern corner), is much denser than in 2000, when it consisted mostly of single-family homes. Downtown’s grid is beginning to look like a checkerboard – and a checkerboard is a big improvement over 2000, when most of Downtown lacked any residential development at all.
An interesting question is how this new development affected prices. Figuring out development’s impact on prices is tricky. New stuff naturally tends to be expensive; no one will build a several hundred million dollar tower just to sell units on the cheap.
A better measure is to compare the sales prices of existing units before and after the new construction. Jude Galligan was kind enough to run those numbers for two developments that existed in 2000: the Towers of Town Lake and the Railyard Condos.
The sales price per square foot of the Towers on Town Lake jumped from $146 to $194 between 2000 and 2010. The sales price per square foot of the Railyard Condos jumped from $157 to $242. This might look like wild growth, but let’s put it in perspective.
First, the fact that Downtown experienced phenomenal growth means that there was a phenomenal surge in demand for Downtown living. A 33% increase in the price of Towers of Town Lake condos and a 54% increase in the price of Railyard units seems pretty reasonable in that context.
Second, we can compare the appreciation in Downtown to the appreciation in neighboring Bouldin Creek. The average price per square foot in Bouldin Creek rose from $153 to $250 between 2000 and 2010, a 63% increase. Indeed, homes in Bouldin Creek and the Towers on Town Lake cost almost exactly the same per square foot in 2000; by 2010, homes in Bouldin Creek were 25% more expensive.
I’m not suggesting that Bouldin Creek homebuyers and Downtown homebuyers represent the same demographic. Bouldin Creek is merely yardstick. By that measure, the prices increase of Downtown’s older housing stock was pretty reasonable.
