Welcome back to Property Lines, a column by veteran real estate reporter Alexei Barrionuevo. Each week on Tuesday, Barrionuevo will report on housing trends, real estate deals, and major business moves right here on Curbed.
Photo by Alexei Barrionuevo.
I stepped into a pale yellow house in Austin, Texas, a few days ago and tried to wrap my head around a boomtown struggling to find the balance between hype, value, and sanity. At first blush, the little two-story home seemed charming, with a wood balcony and enough old Austin charm to deserve its historical designation. Inside, the exposed electrical cables, unfinished floors, and hole-pocked walls screamed "tear-down."
But this is Austin circa 2015, a real estate town hotter than a Texas jalapeño, and the market was saying something very different than my eyes. The four-bedroom home, in the trendy Travis Heights neighborhood, was listed at $649,000.
Within 15 minutes of my visit, with Celeste Quesada, a broker at the Gill Agency, two other parties arrived to check it out. Rob Tompkins, a financial consultant to tech startups who lives with his wife in the neighborhood, toured it excitedly.
"It is kind of a dream for me," said Tompkins, who moved to Austin from New Orleans a few years ago. "I would be interested in rehabbing and keeping it. These old homes all back through here, especially that need a little TLC, are fun to think about. They are pricey, though."
The historic designation for the yellow house in Travis Heights. Photo by Alexei Barrionuevo.
. The four-bedroom house is for sale for $649,000. Here's the entrance hallway. Photo by Alexei Barrionuevo.
Austin is America's fastest-growing city. They say, depending on which census figures you look at, that between 50 and 100 people are moving to Austin every day. The demand for housing continues to prop up sales prices: The average price for a single-family home rose by five percent in September, to $324,150, compared to the same month in 2014.
Whole Foods corporate headquarters is based there, and HomeAway, and Dell computers in nearby Round Rock, as well as a swath of video-game and other tech startups, not to mention a burgeoning film and television industry. Hollywood actors and filmmakers live there to feel normal, including Billy Bob Thornton, Matthew McConaughey (a graduate of UT Austin), Robert Rodriguez, Richard Linklater, Terrence Malick, and Mike Judge, live there to feel normal. Actress Sandra Bullock lived, for a time, in a modest three-bedroom home in the Barton Creek neighborhood, and she owned the now-shuttered Bess Bistro in town.
While a few A-listers choose to live large, most don't, Quesada said. "We're just not fancy here," she said. To make that point, after leaving the little yellow house we drove down Newning Street and passed the former home of Led Zeppelin singer Robert Plant. The house, at 1503 Newning Street, underwent minimal updates to its hardwoods, exposed beams, and vaulted tin ceilings, before going into contract earlier this month for $1.9 million. Plant, Quesada said, was well-known to neighbors, especially, for handing out Halloween candy every year.
Still, it's not the A-listers or the spoiled tech types that Quesada worries about. As the wife of a Grammy-winning producer, Adrian Quesada, she worries that the warp-speed transformation of Austin is threatening to squeeze out the very creative people whothat gave the place the hippie-cool-creative vibe that has drawn emigres from everywhere. It's a common and increasingly disturbing complaint in a lot of cities, among them New York City and San Francisco.
"It is flattering that these great bungalow houses are selling for so much," she said. "But really I feel concerned. A lot of the reason why the folks that can afford those kinds of houses are moving to Austin is because of the creative class and the incredible cultural arts scene, the thriving music scene. But the creative class, if we are not careful, is going to get priced out of the city. So we need to be very mindful of what we are doing."
Quesada, 44, sells real estate, raises two kids, and also is an event promoter. She tends to specialize in homes that reflect the traditional culture of Austin: smallish, bungalow-like structures with low-key facades built with a lot of wood. The kind of place you wanted to host a house party at back in college, back when the rent was $800, not $2,400 like today.
How much is the market rate for this two-bedroom house for rent in south Austin? See below. Photo by Alexei Barrionuevo.
She showed me one special home currently offered for rent in a rapidly gentrifying South Austin neighborhood. It is next door to a historically protected home once owned by Willie Wells, a shortstop who played in the Negro leagues before being posthumously inducted into the Baseball Hall of Fame. Austin artist and musician Tim Kerr painted a giant mural of Wells on a back wall of the two-bedroom home I toured, owned by Paul K. Johnson, a New York-based landscape architect, who is renting it for $2,350. It has become a local tourist attraction.
Local artist Tim Kerr painted this mural of Willie Wells to honor the ballplayer, who lived next door. Photo by Alexei Barrionuevo.
Of course, where there are yuppies, well-heeled empty nesters, and and well-paid hipsters, downtown condos will follow. Austin is no exception. It has a growing clutch of tall glassy towers. While average condo prices are hovering, on average, around $500-per-square-foot, they have risen above $1,200-per-foot for luxury towers.
The only tower with new inventory available is the Austonian, at 200 Congress Avenue, where one- bedrooms with about 1,200 square feet are selling for between $800,000 and $900,000. The three-bedroom penthouse, with 3,635 square feet, is still available for $3.4 million.
Seaholm Residences, the first condo high-rise announced since 2008, is under construction. The 280-unit development, which is offering studios from $270,000 and three-bedrooms from $1.1 million, was fully reserved within a few days of its announcement in 2013.
A third condo development, Fifth & West Residences, began taking reservations last year for a 39-story tower on the site of the former Texas Press Association. Its developer, Riverside Resources, plans to complete the 154-unit building by the fall of 2017. It has apartments ranging from $400,000 for a one-bedroom to $5 million for the penthouse.
Efforts to create more affordable housing, where artists can live and work, have been slow-going, said Sarah Andre, an affordable-housing developer and consultant. For the past two decades, she and her writer-producer-director husband have moved from affordable neighborhood to affordable neighborhood, riding the upswings. They paid $600-a-month in 1994 for a two-bedroom town home on South Congress Avenue—a short walk from the yellow house—back when it had an active porn theater, hookers prowling the streets, and drug addicts sleeping on the sidewalks, she says. Today, with many homes selling for more than a million dollars, "few of the apartments going in over there are affordable," she said.
She pointed to one glimmer of hope: an East Austin development in the works called thinkEAST, which seeks to create as many as 300 units of affordable housing for people with earnings from 30 percent to 80 percent of the median household income of $63,572. "It is supposed to be live-work for artists," she said.
Suzee Brooks, a real estate agent who also moonlights as a singer in a country band, disagrees with Quesada and Andre that the boom is chasing out artists. "If we didn't have such a vibrant economy now, these creative people wouldn't be able to piece together their lives," said Brooks, who also works for the Gill Agency. "That couldn't happen in the '80s. It didn't cost anything to live here then. But most of the people who were your servers at the three restaurants we had here had PhDs," because of the lack of good jobs.
That said, in a boomtown, someone always gets left behind.
Later that day, as we wound down our tour, Quesada got a message from her brokerage about the little yellow house in Travis Heights. It had gone into contract that afternoon, just hours after our visit, and after seven days on the market. (Tompkins later confirmed to me by email that he was not the buyer, adding that the house "needs another $200K-$250K to finish it out.") "Can you believe it?" Quesada said. "There were no flyers advertising the home. Welcome to the Austin housing market."