Daily Briefing: 🏗️ Austin's $257M Makeover & Why Your Next Home Might Not Be Here! 🏘️

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Here’s what you need to know about CenTex CRE Today:

1. Catellus ramps up Colony Park with 3,000 homes, $257M project. 🏗️

2. Austin's median income jumps to $89,415, outstripping U.S. average! 💼

3. Austin's homebuyers eyeing exits; high costs push searches elsewhere. 🚚

4. City eyes $15M Salvation Army shelter buy for downtown Austin. 🏠

Urban Development and Housing Market Dynamics

Catellus proposes increased density for Colony Park Sustainable Community in Austin

Source: Construction Review Online

Summary: Catellus Development Corp. is pushing for zoning changes to allow for increased density in the Colony Park Sustainable Community. The developer is seeking approval from Austin City Hall to amend the existing planned unit development (PUD) zoning for the project. The changes would pave the way for the construction of 2,000 to 3,000 new housing units and the allocation of over 41 acres for parks and open spaces. Plans also include the creation of 230,000 square feet of commercial space, with 125,000 square feet dedicated to retail. The project's cost is estimated at $257 million and is expected to generate $780 million in taxes for the city. The development has committed to income-restricted units, with 20% of the units set aside for such purposes.

Why this matters: Understanding these proposed zoning changes and potential growth in the Colony Park area allows commercial real estate professionals to provide informed advice to clients looking for investment opportunities in rapidly developing areas of Austin.

Report: Austin losing homebuyers to other cities for 1st time on record

Source: KXAN

Summary: For the first time on record, more homebuyers are looking to leave Austin than move in due to the high housing costs, according to a report by Redfin. The data, which is based on searches from about two million Redfin users, reveals that over the past year, twice as many Austin-based users searched for homes outside the metro area. Rising home prices, doubling of monthly mortgage payments since the pandemic, and remote workers being called back to headquarters are some reasons for this trend. Austin's housing inventory has seen an uptick, especially for middle and upper-income buyers, but affordable options are lacking. Mortgage rates are also increasing, which further impacts the demand for homes.

Why this matters: This information can aid commercial real estate professionals in developing strategies for their portfolio or advising clients, understanding that the high cost of living and returning to office work may increase demand for commercial properties outside of Austin.

Economic Growth and Income Trends

Austinites had a better income increase than most of the country in 2022, per new report

Source: Houston CultureMap

Summary: Austin outperformed the rest of the U.S. in terms of median income increases in 2022, with a rise of 12.41% to $89,415, compared to the national average growth rate of 8.1%. This growth rate was slightly higher than the average median growth across all major U.S. cities. Austin's top employers, family-friendly environment, and local attractions are seen as key factors driving this income increase. In comparison, San Antonio and Killeen saw lower increases, while Round Rock experienced a much smaller growth of 2.71%.

Why this matters: With Austin's significant income growth, commercial real estate professionals can expect increased interest in premium properties, as an influx of higher-income individuals and families might be looking for upgraded residential and retail spaces.

Social Welfare and Public Policy

City of Austin looking to buy Salvation Army homeless shelter downtown for $15 million

Source: Commercial Real Estate Direct

Summary: The City of Austin is considering the purchase of the downtown Salvation Army homeless shelter for over $15 million, with the intention of continuing its operation at the current location. This is part of an item on the Austin City Council's agenda, set for discussion on November 9, which aims to authorize the necessary negotiations and executions for the purchase. The city currently holds a one-year lease on the property.

Why this matters: The prospect of the city buying this real estate property could potentially affect future commercial development plans in the downtown area, offering real estate professionals a chance to anticipate new trends or shifts in local policy that might impact the Austin commercial real estate market.