"Will Real Estate Ever Be Normal Again?" (Austin: sublease, apartment)

[dicipher]

Originally Posted by Ice_Major

[/b]

Out of curiosity, what's your guest on the point were it would become a lateral move? Austin appears to be the most expensive metro between the Appalachian and Rocky Mountains now. Compared to the coastal cities it's a bargain but even this gap is shrinking.

Is it?

How many metroplexes can you say you can live within 20 miles of the city center at the substantial discount you have here? Most times you would have to purchase some 40-60 miles away to get any type of price decrease. Here you can live in Round Rock and Pflugerville and pay substantially less for a home and still be fairly close to downtown. And as much people like to complain, the commute is nothing like coastal cities.

And the median house price in Austin is roughly $600k. Take a look at a COL calculator and see what it says in comparison to those coastal cities. It is still a bargain.

[atxcio]

Originally Posted by Need4Camaro

It seems today in America you pretty much have to be a high earner or have a considerable savings / investment / strong financial planning skills / or bought when things were still affordable to own the things we portrayed as the American dream decades ago otherwise you are shafted into a lower social status and incapable of seceding it without a major breakthrough. No longer is working a 9x5 enough to buy your dream home, or in many cases, a home at all.

You must be so happy with your home purchase now. If I recall correctly you bought just before the wild 40% increase in Austin where no one can afford a house on a regular income. Talk about timing the market.

[Ice_Major]

Originally Posted by dicipher

Is it?

How many metroplexes can you say you can live within 20 miles of the city center at the substantial discount you have here? Most times you would have to purchase some 40-60 miles away to get any type of price decrease. Here you can live in Round Rock and Pflugerville and pay substantially less for a home and still be fairly close to downtown. And as much people like to complain, the commute is nothing like coastal cities.

And the median house price in Austin is roughly $600k. Take a look at a COL calculator and see what it says in comparison to those coastal cities. It is still a bargain.

I don't understand I never stated it wasn't a bargain, but merely the gap is shrinking. The question was "at what point does it become a lateral move. "

LA cost of living is 48% higher, Queens NY is 42% higher, Manhattan is 152% higher. Do prices have to equal these cities? What about quality of life factors that aren't so easy to quantify, such as weather, scenery, opulence, urban landscape. I'm just curios about what factors could power Austin's growth to the level of these cities.

[dicipher]

Originally Posted by Ice_Major

I don't understand I never stated it wasn't a bargain, but merely the gap is shrinking. The question was "at what point does it become a lateral move. "

LA cost of living is 48% higher, Queens NY is 42% higher, Manhattan is 152% higher. Do prices have to equal these cities? What about quality of life factors that aren't so easy to quantify, such as weather, scenery, opulence, urban landscape. I'm just curios about what factors could power Austin's growth to the level of these cities.

My point is the gap isn't shrinking much. All those higher COL cities have gone up also and even if the percentage is higher in Austin, it's mostly because the starting price point was lower. Quality of life factors are tradeoffs. I value a beautiful home and warmer weather (which I'm getting here). For others, the factors might be something else. You get lots of retirees that probably don't care so much about the urban scene except for an occasional visit downtown (but again, you can get affordable living fairly close to the city center).

Austin's growth has already exceeded its infrastructure. I think it would far exceed it's capacity if it got to a point where it was a lateral move.

[Need4Camaro]

Originally Posted by Ice_Major

[/b]

Out of curiosity, what's your guest on the point were it would become a lateral move? Austin appears to be the most expensive metro between the Appalachian and Rocky Mountains now. Compared to the coastal cities it's a bargain but even this gap is shrinking.

Not as quickly as you think it is, and it definitely will not outpace the general appreciation of those areas. Also consider this, there are tech workers making $100 - $140k that live in trailers and RV’s in San Francisco. My house wouldn’t exist even at its current inflated value anywhere near the SF Bay Area. I would be in the burbs of Sacramento. If I wanted to be in SF, I would literally have to pay double and I would still be within a 1.5 - 2 hour commute with traffic accounted for (I’m within 35 - 50 minutes of downtown depending on traffic currently.).

The price appreciation of Austin is extreme relative to itself and yes some gap has closed between peer premiere cities but we are still a long shot away of comparing ourselves to them in terms values.

The point where we will see Austin becoming a lateral move, assuming markets of premiere cities do not continue to appreciate, will be when places like Georgetown are built out AND have an average home value exceeding $1 Mil for a standard cookie cutter between 1k to 2k sqft… or Jarrel are built out AND have an average home value exceeding $700k … That really exists in California and New York … we are a long ways off.

Originally Posted by atxcio

You must be so happy with your home purchase now. If I recall correctly you bought just before the wild 40% increase in Austin where no one can afford a house on a regular income. Talk about timing the market.

I got lucky to be dead honest. I was thinking of holding off and allocating the money to other things but decided to buy while I still could.

[DashRiprock]

Originally Posted by dicipher

Is it?

How many metroplexes can you say you can live within 20 miles of the city center at the substantial discount you have here? Most times you would have to purchase some 40-60 miles away to get any type of price decrease. Here you can live in Round Rock and Pflugerville and pay substantially less for a home and still be fairly close to downtown. And as much people like to complain, the commute is nothing like coastal cities.

"20 miles" sounds nice but it's still an hour or more when it matters, i.e. rush hour. I love those ads that say "minutes from downtown!" and you look and the house is in Hutto or something.

It may be worse in coastal cities, I don't know, but it's bad enough here. East coast cities also have more transportation options. West coast might too, but I'm not as familiar with them.

[dicipher]

Originally Posted by DashRiprock

"20 miles" sounds nice but it's still an hour or more when it matters, i.e. rush hour. I love those ads that say "minutes from downtown!" and you look and the house is in Hutto or something.

It may be worse in coastal cities, I don't know, but it's bad enough here. East coast cities also have more transportation options. West coast might too, but I'm not as familiar with them.

It is worse. Try driving the 405 or 5 in Southern Cal or 80 in the SF Bay Area. An hour is nothing but a podcast episode to me. And that's really only during rush hour. People are just not used to it here.

[Need4Camaro]

They do have much better transit than we do but that doesn’t always equate to shorter commute, just less aggravating as you don’t have to deal with traffic first hand, but they make up for their strengths by the need to transfer between routes and wait for busses / trains to arrive sometimes in harsh weather or around people bumming off of you.

And a 20 mile drive in NYC, LA, SF and in some cases Seattle can take over an hour. I live about 25 miles out but it hasn’t ever taken me more than 45 minutes to get to Downtown but I also don’t have to rely on I-35 which is the biggest problem road in Austin IMHO. Also unlike the coastal cities which experience their traffic problems due to overpopulation, most of current day Austin’s traffic issues are due to lack of planning and coordination.

[DashRiprock]

Originally Posted by atxcio

You must be so happy with your home purchase now. If I recall correctly you bought just before the wild 40% increase in Austin where no one can afford a house on a regular income. Talk about timing the market.

Yeah, I guess this is what troubles me as much as anything, and why I don't understand how this is sustainable. How do people with a "regular income" afford an $800K house? I understand that a lot of the people moving in have cash from the sale of a house in California or whatever but what about young folks just starting out? My wife and I do pretty well and we couldn't even sniff our current house if I had to buy again, and it's nothing special.

What are these tech jobs paying that people can afford this?

[dicipher]

Originally Posted by DashRiprock

Yeah, I guess this is what troubles me as much as anything, and why I don't understand how this is sustainable. How do people with a "regular income" afford an $800K house? I understand that a lot of the people moving in have cash from the sale of a house in California or whatever but what about young folks just starting out? My wife and I do pretty well and we couldn't even sniff our current house if I had to buy again, and it's nothing special.

What are these tech jobs paying that people can afford this?

Honestly, when has buying a house ever been easy?

Many of us were house poor when we got our first homes. My wife and I didn't take a vacation for 3-4 years after buying and were brown bagging it for quite some time.

And no, I'm not trying to sound callous. I do think it's harder for young people now. But ultimately, buying a home has usually meant sacrifices. I just think today's young people are forced to be more creative. Some of my younger co-workers were living in a rented home with another couple to save up. Some were fortunate to have parents that let them stay with them for 2-3 years while they saved up on those higher paying jobs. And then we have crazy stories like engineers living in their vans in the Google parking lot.