Austin Retail Affects Residential Home Sales

October 22, 2008

Plopping Down Subdivisions

In Austin, the theory is that home builders go out to the suburbs where there are a bunch of ranches, buy some land and plop down subdivisions, creating mini-cities within the suburban cities. For example, in Pflugerville, the Blackhawk area consists of Villages at Hidden Lakes, Falcon Pointe, Avalon, the Meadows of Blackhawk, and the Fairways at Blackhawk. What used to be there before a bunch of houses? Ranches. There are even still some ranches between the subdivisions, horses and all.

In Come The Starbucks

After the houses are built, the theory is that commercial retail will soon follow as it is now attractive to open up shop where all these people now live and survive somehow without a Starbucks and a Target. In the Blackhawk area which is at Hwy 45 and 130, ground was broken last year on a Home Depot anchored retail center with a Target soon to open and there are two HEBs within two miles to service this surge of population to the area.

With the current economic issues (we’ll avoid the “R” word here), the homes are already built and are often waiting on the retailers to come swooping in, but will they? Lance Morris, president of the Weitzman Group’s local office, predicts that retail rents and occupancy rates will be flat through 2009.

“I think it’s going to be a year or two before we hear any new big-box store announcements,” he said.

So What About Home Sales?

What does that mean for residential home sales? Buyers often look around at retail before putting up their down payment- how far of a drive to the store is it? Is there nearby entertainment? Are hospitals nearby? Some home buyers are looking to get away from the hustle and bustle of the city while others are seeking to be outside of downtown Austin yet have the convenience of shopping nearby. Therefore, as retail remains stable, residential resale could experience the same trend- we’re not expecting prices to drop or raise substantially, nor are we anticipating the days on market to go down in this quarter.

Call it stable, flat or level, it doesn’t matter- the tidbit people miss in the above quote from Morris is that he doesn’t say the announcements are gone forever, but that it will be a year or two before the bounce. Buying now, knowing that future development is planned could mean equitable growth in your home’s value, making it an outstanding investment.

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Hen Pecked by Lani, Asset Director | Filed Under Austin Real Estate Blog, Selling 

People Reactions

One Response to “Austin Retail Affects Residential Home Sales”

  1. Grant on October 24th, 2008 4:11 pm

    People are trying to cut back on the gas expenses. So no one wants to drive too far to the grocery store. I agree. Also, many people are health conscious and want to make sure that there is a nearby grocery store with good healthy products.
    -Grant Pollet

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