Continued demand pushes denser, more expensive growth
From the 1950s through the 1970s, South Lamar Boulevard was an industrial corridor, home to auto repair shops and blue-collar haunts such as The Broken Spoke and The Horseshoe Lounge.
Then the price of downtown land started going up, and multifamily housing developers looked south, said Joe Bryson, president/broker of Real Estate Alliance Inc.
“These developments are drawing a mass of young people who [tend to be] wealthy, since the apartments are expensive,” said John Heffington, senior associate with real estate firm CBRE Group Inc. “Retailers like that customer base and want to follow them.”
Today South Lamar from Lady Bird Lake to Westgate Shopping Center is several years into its redevelopment. Real estate experts say more than 2,000 apartments and condominiums have been added there since 2009, and commercial sites along the road are being developed and redeveloped.
“At 1300 S. Lamar [Blvd.], there were three older buildings in disrepair,” CBRE Vice President Bryan McMurrey said. “The landlord is completely refinishing the facades and signed Ramen Tatsu-Ya [as a tenant]. These buildings that had sat vacant are now being repurposed into these new and exciting, fun uses.”
Along with increased development, commercial rents have gone up 30 to 50 percent in the past three to five years, Heffington said.
Real estate agents say demand for housing has also sent property values soaring.
In March 2009, the median single-family home in the Greater South Lamar area sold for $381,200, according to the Austin Board of Realtors. In March 2014, the median home sold for $550,950.
Median prices have also risen in the past year alone.
The South Lamar corridor runs through two zones of Austin’s Multiple Listing Service, a tool real estate agents use to list properties for sale. Together, zones 6 and 7 are bounded by Lady Bird Lake to the north, I-35 to the east, Ben White Boulevard to the south and Loop 360 to the west.
In the eastern Zone 6, the median home sale price rose from $322,450 to $425,000 from March 2013 to March 2014, said Matt Ditlow, broker associate with Realty Austin. The median home sale price in the western Zone 7 rose from $376,250 to $564,750 during the same period, he added.
Properties only stay on the market for an average of 20 days, he said.
“2013 was an unbelievable year,” Bryson said. “There was so much appreciation, but that level is just not sustainable.”
Mario Champion, president of the South Lamar Neighborhood Association, said he has lived in South Austin for 20 years.
The biggest changes in the area have been the home values, he said. He said he has seen neighbors move away because they could not afford the property taxes on their homes. He has also seen neighbors sell duplexes for more than $400,000.
“Obviously there is the traffic, and it is difficult to park,” he said. “But [living in the area] is great in the sense that it is so walkable—I can walk to East Side King or walk to a park.”
Walter Moreau, executive director of Foundation Communities, said the nonprofit hopes to get state funding in July to build and open an affordable housing development, Bluebonnet Studios, on South Lamar in 2016.
“All of the new apartments being built on South Lamar are very expensive and out of reach for many single individuals that work and earn less than $15 per hour,” he said.
Moreau said the nonprofit has never had waiting lists for homes as long as it does today.
“Austin used to be cheap and weird,” he said. “I think you can still find some weirdness around town, but the cheap is gone.”
Several major properties are under construction north of Oltorf Street.
When completed in summer 2015, Lamar Union will have 443 residential units and 60,000 square feet of retail, according to Derek Brown, managing director of development for Greystar, which is developing the property.
Brown said the renovated Alamo Drafthouse South Lamar will open this summer, and the first residential units and retail properties will open in the fall. Businesses will include Boardlife, Jose Luis Salon, Optique Eyewear, Resolute Fitness and Service Menswear. Restaurants will include Cantine, Caffe Medici, Daily Juice and Shake Shack.
Nearby, housing developments are taking shape or have recently opened.
Hanover South Lamar will contain 340 luxury multifamily units. Gibson Flats, a 202-apartment property, recently opened.
Matt Ditlow, broker associate with Realty Austin, said after the 2008 financial downturn, it was difficult to get funding to build condos. However, developers still could get funding to build apartments, so they started building them along the road.
More recently condo funding has returned, so more condos are being built, he said.
One firm plans to build 69 condos on the 2.23-acre former site of the South Lamar Trailer Bazaar, said Chris Stutzman, managing director at real estate firm Transwestern.
Capital Metro will launch Route 803, a MetroRapid bus service route that includes South Lamar Boulevard, in late summer to early fall.
The route runs north from Westgate Shopping Center up the South Lamar corridor to downtown Austin and The University of Texas before terminating at The Domain.
The decision to add the service was based on ridership and demand, Capital Metro spokeswoman Melissa Ayala said.
South Lamar Boulevard ends at the Westgate Shopping Center south of Ben White Boulevard.
The current Westgate Shopping Center is a redevelopment of the Westgate Mall, which was built in the 1990s, said Alison Barnwell, vice president of retail services for Live Oak-Gottesman. The center is anchored by Central Market and movie theater Regal Westgate Stadium 11.
The Westgate area is part of the 78745 ZIP code, which has also seen significant price increases in recent years.
In March 2009, the median home price for a single-family home in 78745 was $158,000. In March 2014, the price had risen to $229,500.
The ZIP code is the most populated in Austin with more than 55,000 residents, according to city demographics data.
Matt Ditlow, broker associate with Realty Austin, called 78745 the next hot area for property sales.