Heading east

East Austin's newest apartment project comes with prickly past

Oden Hughes proposed a project similar to this one in Montopolis.

Photo courtesy of Oden Hughes

As Austin housing costs continue to rise, real estate developers are looking for unique solutions to combat affordability issues. Greenwich, Connecticut-based investment firm Starwood Capital Group said June 24 that one of its affiliates had purchased a 342-unit, garden-style apartment project currently under construction at 500 U.S. Highway 183 South, a largely overlooked area in Far East Austin.

Austin-based development firm Oden Hughes began construction on the Cactus Rose project in 2018. It’s scheduled to be finished in spring 2020. Amenities will include a clubhouse, a fitness center, a pool with cabanas, quartz countertops, and stainless steel appliances.

Starwood Capital Group says it now will finish developing the project.

“Austin has experienced significant population growth and positive demographic trends, and we believe East Austin presents an attractive opportunity to meet the growing demand for high-quality housing with Class A amenities and finishes,” Anthony Murphy, an acquisitions associate at Starwood Capital Group, says in a release. “With convenient access to Austin’s expanding job centers and entertainment district, this project will appeal to a wide pool of renters."

In the release, Starwood Capital Group says the Cactus Rose property is one of the few sites in the Montopolis area that can accommodate garden-style apartments. Company representatives couldn’t be reached for additional comment.

The Cactus Rose Mobile Home Park once stood on the 23-acre site largely occupied by low-income mobile home owners and renters who were relocated with financial assistance from Oden Hughes. In 2016, the Austin City Council granted Oden Hughes’ rezoning request for the property. At the time, neighborhood advocates argued that the apartment project would eliminate yet another option for affordable housing and spur more gentrification.

According to apartment website RentCafé, rents for garden-style apartments — which usually are no taller than four stories — tend to be lower than for mid-rise and high-rise apartments. However, rents are rising faster for garden-style apartments than for the two other categories, according to RealPage, a provider of data and analytics for the real estate industry.

Aside from Cactus Rose, garden-style apartment projects underway locally include Flats on Shady Lane in Southeast Austin and Nexus at Goodnight Ranch in South Austin.

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Homebuyers can afford to be picky as Austin housing inventory rises

Photo by Avinash Kumar on Unsplash

Housing economist Clare Losey said the most significant factor affecting home sales in Austin is high mortgage rates.

The latest real estate report from Unlock MLS and the Austin Board of Realtors (ABoR) has revealed housing inventory is still on a steady rise in the Austin-Round Rock-San Marcos MSA, creating more choices for potential homebuyers as they navigate a high interest rate market.

Residential home sales dipped by a mere 1.5 percent year-over-year from October 2023, amounting to 2,248 closed sales in the Austin-Round Rock-San Marcos MSA. Median prices have also dropped to $430,000, or 3.2 percent less than this time last year. More than 3,300 new home listings were added on the market — a 7.4 percent increase from 2023 — bringing the total number of active home listings to 11,599.

According to Unlock MLS and ABoR housing economist Clare Losey, Ph.D., October's mortgage rates stood at 6.4 percent and are showing no signs of a significant drop in the near future. Even heading into 2025, Losey says potential homebuyers who are biding their time in the hopes of seeing rates plummet "may be in for a long wait."

"In the meantime, sellers must recognize that bringing buyers to the table requires a more aggressive pricing approach," Losey said. "Even in a more balanced market, buyers with limited purchasing power are struggling to meet current price expectations."

As for the overall health of the Central Texas housing market, 2024 Unlock MLS and ABoR president Kent Redding labeled recent news reports that called Austin "ground zero" for a downturn as an "extreme over-exaggeration."

"Austin led the state and nation in record-breaking home price growth and sales activity during the pandemic," Redding said. "For three years, near-zero housing inventory, numerous offers above list price and a rapid-paced market raised home prices and left little negotiating power for buyers. During this record-setting growth, ABoR and Unlock MLS consistently emphasized the unsustainability of the rapid growth, and now, our market is working to balance those extremes."

Central Texas housing trends in October 2024

In Travis County, 979 homes were sold last month — a slight 2.5 percent increase from last year. Median prices remained flat year-over-year at $510,000. Active home listings continued growing to 5,702 homes, which is 9.4 percent more year-over-year.

In Williamson County, 807 homes were sold in October, with median prices steadily dropping to $420,000. There were 1,028 new home listings on the market, showing a 4.5 percent increase from October 2023, bringing the total number of active home listings to 3,369.

Residential home sales dropped by nearly eight percent in Hays County in October, totaling 315 sales. Median prices also fell 5.5 percent year-over-year to $359,000. Active listings rose 6.6 percent year-over-year to 1,740 homes with the addition of 534 new listings on the market.

Meanwhile, 114 homes were sold in Bastrop County last month, which is 4.4 percent more than this time last year. Median prices dropped by a single percentage point year-over-year to $355,000. There were 654 active listings on the market in October, and 152 new home listings, representing a 1.3 percent slip in new inventory when compared to last year.

Only 33 homes were sold in Caldwell County in October to reflect a near 14 percent decline year-over-year from October 2023. Median prices fell to $262,990, which was a 13.5 percent decrease from last year. There were 136 active homes on the market last month, and 40 new homes added on the market.

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