So is $400-$500k the "new" cheap in Austin and other places? (Atlanta: houses, safe neighborhoods)

[sliverbox]

I float around on various city forums for cities I might plan on moving to. Whether its Austin, Nashville, Raleigh, or Atlanta there's usually a handful of posts every day from people mentioning they're planning on moving there at some point. This is naturally followed by a list of requirements: Safe neighborhoods, good schools, etc etc etc. But then the kicker is that more often than not they would "like" to pay anywhere from $300k-$600k for a house. We're talking cities that all have a median home price of under $200k.

I thought one of the main reasons people were moving here and other cities was because they were affordable. If you're willing to spend $500k, then you might as well move to coastal California because the prices are about the same. I guess to me it doesn't make a whole lot of sense given that the typical $150-$200k houses I see in these cities are all nicer, bigger, and better than a house that costs $600k where I live in the Bay Area. When the day comes that we also move to whatever city like Austin or Nashville you better bet your boots I'm not coming anywhere close to spending $500k on a home when $200k or less will get us something a lot nicer than what we could afford where we currently live.

But it got me thinking: Do people really and truly think that $400k-$500k is "cheap"? Is that really the new norm or something?

[LittleCityATX]

Not in Austin, 400K and up are a small percentage of the overall market. The average price is closer to 230K. I think if you asked the average long-term Austinite what they thought of 400K houses in central Austin, they would lament that those same houses were 200K ten years ago.

[AustinSpartan]

500k gets you nothing in coastal California.

[jobert]

1. Perhaps they are coming from places where property taxes are low, and their wish list is sprinkled with ignorance.

2. Maybe they are looking for the neighborhoods where the houses are 300-600K and they are trying to find the 200K one there if it exists.

[someguyatx]

$400-500K would be reasonable for a home with a yard in downtown Austin but in the suburbs you can have a mini mansion. I hate living 20 miles away from the action but I like my low mortgage.

[CptnRn]

I see lots of posts here from people looking for houses in good neighborhoods for less then $200K and they are available. I'm personally shocked when I see someone looking for something in the $500K neighborhood. Seems like misplaced values to me.

[sliverbox]

I didn't mean to be nasty to anyone looking for a $500k home by the way so hopefully nobody took offense. Its just that when we visited Austin we drove around and saw homes in what I'd call just plain ole' boring neighborhoods- as in nothing special with 1970's-1980's tract homes priced for as little as $120k. We don't have kids and don't need nice schools and all that. Its just that what I saw for under $200k to me seemed perfectly sufficient- especially given that the same boring house with perhaps less upgrades and a smaller yard would set you back $600-$700k where we live now. To me that seems like a pretty good deal. Then again we're not looking for Mcmansions, retirement communities, or perfect neighborhoods either. I imagine most people want at least one or more of those things these days.

[jobert]

Apparently the 400K+ market in Austin is being snatched up right now because they are going for fire-sale prices compared to 2007. This is the main reason that the average home price has risen in Austin this year. The median has remained about flat +/- a few thousand. This tells me that the average middle class house has remained basically the same. This will end up having a ripple effect through the rest of the market (< 300K) over the next couple of years, especially now that the number of housing starts has bottomed out. Meanwhile - 10,000 people are moving to Austin every year. This town has already seen it's share of "doubled-up" households over the last few years, as well as our apt. vacancy rates drop substantially and our rents go up over the last 12 months.

Does anyone else see where this is going?

[RevMen]

Originally Posted by sliverbox

If you're willing to spend $500k, then you might as well move to coastal California because the prices are about the same.

Not even close.

[sliverbox]

Not even close.

Maybe not 500k but $550-$600k in some coastal towns. I know because I am starting to see it myself and I actually live in coastal CA. A few years ago those prices would've been more like $700-$800k.