Urban or Suburban: How Much Does it Cost to Own in Downtown Austin?

1 11 2007

There’s no doubt the downtown Austin buzz is growing. It seems there are more than a few people considering a lifestyle change by moving out of the suburban areas and into downtown. Until recently, there hasn’t been a large supply of downtown residential space available. Predictably, demand for condos and lofts in the urban core continues to swell.

For example, the W Hotel & Residences saw 80 percent of their units reserved within a week of breaking ground and the sales center opening its doors (1 reservation = $10,000.00 deposit per unit). That’s remarkable given the expected completion date is still 3 years away… But even if you’re not willing to wait 3 years for your condo, there are at least 10 other projects under construction and roughly 2,000 units due to be complete by the end of next year. All of this begs the question… How much will it cost to own a downtown condo?

 AustinTowers rightly points out, “The price of a condo is only one component of the final cost. In addition, you’ll need to think about monthly condo fees, property taxes, utilities, etc. the good news is that the price is relatively fixed: unlike owning a single family house, you won’t need to worry about surprise maintenance projects like a new roof or new AC that can cost thousands of dollars.”

It is true condo owners don’t have to worry about as many maintenance issues when compared to owning a single-family residence. However, it is crucial for condo buyers to carefully investigate the financial health and viability of the owner’s association. Otherwise, you may be subjected to surprise assessments down the road. I will expand on this in a future post. 

Here is a breakdown of what you might expect to pay for three common floor plans in a high-rise condo development in downtown Austin. My assumptions are noted below the charts.

cost.jpg

These calculations assume an average price of $350 / sq ft. Owner’s association dues are calculated on an average of $0.34 / sq ft. The mortgage principal and interest payment is based on a 30-year, fixed rate mortgage with a down payment of 10 percent at an annual interest rate of 6.25 percent. Assumes tax rate of 2.5% annually.

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Related Post :: Urban or Suburban: Where Should You Live

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