Downtown Developments

1,000-room luxury hotel to break ground in downtown Austin next month

The Fairmont Austin Hotel Rendering October 2014

The Fairmont Austinwill break ground at the intersection of East Cesar Chavez and Red River streets on November 3.

Rendering courtesy of Gensler

Austin’s newest luxury hotel will begin construction next month. The 37-story, 1,066-room Fairmont Austin is set to break ground on November 3 at the corner of East Cesar Chavez and Red River streets. The 1.74-acre site, located next to the Austin Convention Center, is currently a parking lot.

A press release stated that Colony Capital, LLC — a private real estate equity firm based in Los Angeles — will provide financing for the $370 million project.

Fairmont Hotels & Resorts first announced plans to team up with developer Manchester Texas Financial Group, LLC and build a downtown hotel in 2011. Changes in building designs (Manchester originally planned for the hotel to have two towers and 50 floors) and other setbacks caused the opening date to move from early 2015 to its current projection of June 3, 2017.

"It's time for construction of The Fairmont Austin to fire on all cylinders," said Doug Manchester, president of Manchester Texas Financial Group, said in the release. "We're thrilled to have aligned with a first-class operator in Fairmont and a premier funding source in Colony Capital, and it’s all the more exciting given how strongly we believe in Austin."

The Fairmont will be the third convention hotel in the downtown area, joining the 800-room Hilton Austin and the JW Marriott Austin, which is currently under construction on Congress Avenue and is is expected to open in February of next year.

Companies associated with the project note that attractions such as SXSW and Formula 1 create a high demand for hotel rooms and event space. According to a 2013 market analysis from consulting service HVS, "Austin Convention Center currently operates at only 40 percent capacity due to a lack of hotel room availability for large conventions and events."

The Fairmont Austin was designed to complement the Austin Convention Center with its two ballrooms, an exhibit hall and an additional 5,850 square feet. Although the hotel will be situated across the street from the Convention Center, an aerial walkway has been planned to connect the two.

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local real estate report

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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