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Old 10-22-2010, 11:29 AM
 
Location: West Lake
46 posts, read 59,116 times
Reputation: 21

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Austin homes sales dive 27% in Sept. per ABJ. It's all good here in Austin though. Let the spin begin....
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Old 10-22-2010, 01:36 PM
 
2,060 posts, read 3,540,001 times
Reputation: 1378
Quote:
And I think this is the most important point of all. No one is denying that Austin is feeling the effects of the current downturn. Real estate values have been affected. HOWEVER, I personally know folks in the central valley of Cali whose homes have literally dropped over 50% in value, and I'm not talking about mondo $5mil homes that are now $2mil,
Using central Cali as a comparison isn't a good comparison. Central Cali might as well be the center of Kansas: Its totally far removed from any major metro. There is NOTHING there except farmland and that's the only game in town as far as employment. On the other hand, the Bay Area and LA might have fallen in price a little- but the reality is that the biggest price drops have been in the extreme far-flung exurbs and the ghettos. On the other hand prices in nicer areas, like where I live in the East Bay fell maybe fell 15-20% but that still means you're going to spend 500k on a halfway decent house. As much as I hate to say it, prices seem really sticky in the decent neighborhoods. This is one of the primary reasons we're moving from Cali because the housing bubble is still very much alive here and even the worst recession in decades failed to dump prices to even remotely acceptable levels.

Will the same be true in Austin? Who knows? The dynamic there seems very different. Unlike the Bay Area where there is no affordable housing even in the suburbs unless you drive wayyyyy out, Austin still seems to have a lot of affordable housing- albeit maybe cookie-cutter, but affordable just the same. As far as 500k for houses in Austin with its crazy taxes, that to me seems insane. Yet I've given up questioning how seemingly unsustainable economics remain intact without collapsing because the Bay Area is proof.

Someone mentioned Australia: Just be glad you don't live there. Almost ALL of their major cities are now amongst the most expensive and unaffordable in the world. Be glad you live in a country that still has affordable housing in most cities.
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Old 10-22-2010, 01:39 PM
 
Location: Austin
2,522 posts, read 3,790,808 times
Reputation: 677
Quote:
Originally Posted by austin-steve View Post
I think the regulars here know that the Austin City-Data Forum is a place where differing views are exchanged freely. It's also a place where BS gets called on people who make unconvincing arguments, or try to sell personal opinion as fact, or who seem to do nothing but dispense negative viewpoints because they've adopted an apparent mission to do so.

Steve
Negative is not necessarily incorrect, and neither is positive necessarily correct per economic cycles, including housing....to refrain from negativity merely for the sake of keeping a positive spin on housing is just as wrong....positive housing forecasts rarely get questioned, as it is news most want to hear..the problem with that is, when RE values in most of the country were becoming unmoored from the actual worth and long-term value trends, no one, or very few, DID question the positive valuations, and look what happened...

Per Austin RE values, they are VERY much prone to busts, even now, as the values ride on the whole growth and hype craze that has surrounded Austin for the last couple years...if that whole salivating landrush and relocation hype pops, Austin's valuations could still easily drop 20-25%, though on a far lower base valuation, just like Houston in the 80's...

No holy writ or force is forever vouchsafing Austin's valuations, and foreclosures are certainly affecting the metro's valuations right now, along with the drop in access to loans....all we can do is wait and see, and realize anything can happen here, same as all the other places..

Last edited by inthecut; 10-22-2010 at 02:01 PM..
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Old 10-22-2010, 01:57 PM
 
Location: Fairfax, VA
1,422 posts, read 1,558,870 times
Reputation: 435
Quote:
Originally Posted by sliverbox View Post
Using central Cali as a comparison isn't a good comparison. Central Cali might as well be the center of Kansas: Its totally far removed from any major metro. There is NOTHING there except farmland and that's the only game in town as far as employment. On the other hand, the Bay Area and LA might have fallen in price a little- but the reality is that the biggest price drops have been in the extreme far-flung exurbs and the ghettos. On the other hand prices in nicer areas, like where I live in the East Bay fell maybe fell 15-20% but that still means you're going to spend 500k on a halfway decent house. As much as I hate to say it, prices seem really sticky in the decent neighborhoods. This is one of the primary reasons we're moving from Cali because the housing bubble is still very much alive here and even the worst recession in decades failed to dump prices to even remotely acceptable levels.

Will the same be true in Austin? Who knows? The dynamic there seems very different. Unlike the Bay Area where there is no affordable housing even in the suburbs unless you drive wayyyyy out, Austin still seems to have a lot of affordable housing- albeit maybe cookie-cutter, but affordable just the same. As far as 500k for houses in Austin with its crazy taxes, that to me seems insane. Yet I've given up questioning how seemingly unsustainable economics remain intact without collapsing because the Bay Area is proof.

Someone mentioned Australia: Just be glad you don't live there. Almost ALL of their major cities are now amongst the most expensive and unaffordable in the world. Be glad you live in a country that still has affordable housing in most cities.
I will say ditto for DC area. In some of the "exurbs" as they like to call far flung suburbs out this way, yes, we have seen a bust in housing prices. But again, we live 20 miles out of the city and STILL have to pay more than $300K for a small 2 BR TH or condo. Our prices have fallen 25% from the top of the market, but it is in no way "normal" pricing. It makes no sense that a family that makes more than 6 figures can only afford to live in a dinky TH way far out from the city.

The property tax question vexes me, but I've worked out that what we will pay in property taxes on a $400K home (which is our upper limit) is roughly what we pay in property taxes+state income taxes, so it will be a wash for us...up until retirement.

I have been told that there are some loan/banking regulations in TX that prevented some of the interest-only and/or ARMs that we were seeing here as people were desperate to find ways to afford anything as the bubble was inflating. And to be honest, for some homeowners, these things resetting was NOT a huge problem because they actually owe LESS now because the rates are lower than when they bought. Most of the foreclosures or short sales we have seen are people trying to relocate and can't sell for what they purchased the home for. If you're staying put, it sometimes worked in your favor.
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Old 10-22-2010, 09:29 PM
 
1,393 posts, read 1,486,700 times
Reputation: 1284
Perhaps this illustrates graphically that Texas is not as immune as local media would suggest:

The Decline: The Geography of a Recession (http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html - broken link)
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Old 10-22-2010, 09:38 PM
 
Location: Great State of Texas
75,342 posts, read 36,498,984 times
Reputation: 18332
What we can be thankful for is that even in this recession Texas had some pretty strict rules about mortgages and HELOCS. THAT is what kept us from dive bombing in RE like other states did.
We don't live in a bubble and we're not our own country (even if some would like to see that) so national problems affect us in some form or another.

So just grit your teeth, tighten that belt for a bit, don't take on too much debt and wait out the storm.
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Old 10-22-2010, 10:09 PM
 
Location: Austin
2,522 posts, read 3,790,808 times
Reputation: 677
I just think the USA as a whole has major probs on ALL fronts..jobs, housing, health insurance/health, retirement funds, cost of education, national debr/balance of payments..

..and there is no shelter from that storm in the USA...not even Texas..How anyone came to the conclusion that Texas is the default national umbrella the entire nation can run to/under in the srorm I have no idea
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Old 12-30-2010, 01:13 PM
 
Location: Austin, Tx
296 posts, read 507,238 times
Reputation: 176
Quote:
Originally Posted by sliverbox View Post
Someone mentioned Australia: Just be glad you don't live there. Almost ALL of their major cities are now amongst the most expensive and unaffordable in the world. Be glad you live in a country that still has affordable housing in most cities.
True that affordability is big issue in much of Oz-land just now. They seem to be where the USA was back in 2006.

But there are factors i really like.

1) It is much more laid back out there. We have become too much PC.
2) They are 3rd least corrupt country in the world. We are somewhere at 15-20.
3) The airports are still a breeze.
4) The Great Barrier Reef region is prettier than Westlake Hills

Now if only the US dollar would strengthen significantly. With the Bernank continuing to drop money from helicopters, it is going to be a pipe dream.
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Old 12-31-2010, 07:04 PM
 
Location: West Lake
46 posts, read 59,116 times
Reputation: 21
New we've drifted to Australia?
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Old 01-01-2011, 10:52 AM
 
Location: Milwaukee, WI
96 posts, read 118,833 times
Reputation: 53
Don't know enough about the history of Austin housing market to really comment... but while looking at real estate I've seen many houses that have been on the market the better part of a year (or longer) and prices that have come down 20%, sometimes more. Not sure if it's people that were trying to take advantage of the influx of residents or discouraged buyers. I'd guess a mix of both. It's not a good sign either way.

For the first time I'm really starting to see all the subjective signs of a recession here. Numbers are certainly valuable, but once it physically hits your circle is when it sinks in for the majority of people. Seeing friends/acquaintances lose jobs, unable to find jobs, business you know of closing, etc. Again, all very subjective, but still reminds you that the recession is alive and well in Austin.
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