Don’t expect many more condos to rise in the Austin skyline anytime soon.
Developers say the city’s condo pipeline is running dry after years of breakneck construction, leaving only a handful of big projects in the works. Thousands of luxury units have been delivered in the city’s wealthiest zip code, 78701, in the past few years. That includes Urbanspace’s 56-story Modern Austin Residences, Pearlstone Partners’ 41-story Vesper and Reger Holdings’ 28-story Linden, the Austin Business Journal reported. More than 11,000 people now call downtown home, with per capita income topping $137,000 and the median home value above $700,000.
But that momentum is slowing. Pearlstone’s Chris Zaiontz said condo supply is tapped out for at least two years, with roughly 260 unsold units still on the market between the Modern, Vesper and Linden. He blamed high interest rates and wary capital markets, which have made financing projects nearly impossible. Urbanspace’s Kevin Burns predicted it could be 2029 before the next wave of condo towers gets delivered.
Apartments are filling the gap, but even that sector is struggling to absorb new supply. Downtown vacancies have hovered above 10 percent since 2021 and hit nearly 15 percent this summer, according to CoStar. More than 3,000 rental units have come online downtown in the past four years, swelling inventory by 77 percent. The 74-story Waterline, a Lincoln Property and Kairoi Residential project, is slated to deliver 352 luxury apartments next year.
Developers see the lull as necessary and temporary. Burns said a drop in interest rates could flip the condo market into a seller’s market within 18 months. Zaiontz added that Pearlstone is sitting on two downtown sites it plans to develop once financing conditions improve.
Longer term, insiders point to the South Central Waterfront — the site of the former Austin American-Statesman headquarters — as the next frontier for high-rise growth. Major players including Endeavor, Related and Hunt have towers in the pipeline south of Lady Bird Lake.
While the cranes may slow, developers are bullish.
“People are always going to live downtown,” Zaiontz told the outlet. “It has so much to offer, from the food and beverage scene to the entertainment scene. We’re very bullish on the continued success that downtown Austin has seen.”— Eric Weilbacher
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