Is Austin Really That Cheap? Surprised At Rental Rates (Round Rock: transplants, real estate)

[MysticalDream]

I keep reading how the cost of living and housing in Austin is so cheap. However, when I went to craigslist to look at the properties the prices look actually quite high. Seattle, a place I am thinking of moving to, has been labelled as one of the most overpriced cities in the USA. However, on searching the prices of both houses and apartments, both in the city center and suburbs, I was shocked to see that there didn't appear to be too much a different in price of the rents. Perhaps, the rental market and buyers market are completely different? Or, is it that the prices of houses in Austin have had a significant boom? Really, I was hoping to see $900 rentals for large houses in Austin's suburbs like I could see here in Boise, but it appears that most houses around 1600sq ft in Round ROck and other suburban parts of Austin are going for like $1300 or more a month. I can even find nice suburbs of Seattle with cheaper houses than Austin.

What, I would like to know is if there is something I am missing? Where and what is the cheap housing in Austin I keep hearing about? I've looked at other supposedly cheap Texas cities, and I have noticed the prices are not all that low either, but lower than Austin.

[df175]

The downtown / UT /central area is very expensive, but rents get a lot cheaper away from there.

I suggest Padmapper as it maps the CL posts over a map.

Rents are very much in the upswing as population growth has been strong but banks haven't been making loans for new buildings until recently, and so the demand/supply gap is particularly deep in Austin right now.

[Moonlady]

Occupancy rates are extremely high right now so that is driving up the prices. Buying is actually cheaper than renting right now. Rents are not one of the things cheap about Austin!

[sxrckr]

The cheapness of Austin, and the popular/desireable cities in Texas for that matter as you've discovered, is exaggerated.

[mark311]

Seattle was considered one of the cheaper places that everyone was moving to from California just a few years back. The main places that people considered from my age group when leaving California were Seattle, Portland, Denver, Austin (or any TX city), and Phoenix all for a cheaper cost of housing.

Compared to CA or other pricey areas, rents and home prices in the Austin suburbs like Round Rock are definitely "cheap". But, when compared to other good value places like the ones mentioned above, housing costs might not be that much different.

Round Rock is a relatively newer area and most of the homes aren't older than the late 90's. That means that very few are probably paid for and the landlords still have a good sized mortgage payment. Property taxes, homeowner's insurance, and HOA fees on a $225K home in Round Rock might cost a landlord about $550 per month. Let's say that he owes $150K on that $225K home. Mortgage payments would be about $800 per month. So the landlord already has to cover $1350 and he hasn't even taken things like maintenance and repairs (AC, lawn care, fences, property manager?, etc.) into account. If he owes more than that $150K, then he would need to charge even more to just break even. In areas where homes are older (and might be paid for) and property tax rates are lower, people can afford to charge less for rent.

On the other hand, there are some good multi-family housing rental deals (apartments) in the Austin area. But, I agree that rental prices for single-family homes aren't going to be that much cheaper than buying. You can find a nice 2 bedroom apartment in a nice area with great ameninites for under $900. A similar apartment where I'm from in CA would be close to $2000 per month.

[Idlewile]

Houses in the nicer Austin suburbs -- generally -- run $1300-$2200 depending on size and quality. further out it gets cheaper.

[hoffdano]

Austin's population grew 51% from 2000 to 2010. I think many recent transplants are renting, not buying, so supply of rental housing is tight and prices are high.

[buffettjr]

Austin is adding 5,000 new residents every month, but is adding nowhere near 2,500 new housing units every month, and the result is increasing rents. I have been to Boise several times and have researched real estate there in the past, and Austin is much more expensive in terms of rents and asking prices for purchase. A small home close to downtown Austin will cost nearly 100% more than a similar home a similar distance to downtown Boise. I was shocked at how cheap Boise housing was just like you're shocked at how expensive Austin housing is. In other words, you're not missing anything -- it really is expensive, and will probably remain so as long as the population keeps growing faster than its replacement rate.

[passionatearts]

Rental supply is extremely tight right now, and that's driving up prices. The tight supply is due to several factors: lack of apartment construction over the last 5 years due to the recession, high numbers of transplants moving to Austin, and the wildfires of last year which destroyed a large amount of housing stock in the Austin metro area.

[Austin97]

Originally Posted by MysticalDream

I keep reading how the cost of living and housing in Austin is so cheap. However, when I went to craigslist to look at the properties the prices look actually quite high. Seattle, a place I am thinking of moving to, has been labelled as one of the most overpriced cities in the USA. However, on searching the prices of both houses and apartments, both in the city center and suburbs, I was shocked to see that there didn't appear to be too much a different in price of the rents. Perhaps, the rental market and buyers market are completely different? Or, is it that the prices of houses in Austin have had a significant boom? Really, I was hoping to see $900 rentals for large houses in Austin's suburbs like I could see here in Boise, but it appears that most houses around 1600sq ft in Round ROck and other suburban parts of Austin are going for like $1300 or more a month. I can even find nice suburbs of Seattle with cheaper houses than Austin.

What, I would like to know is if there is something I am missing? Where and what is the cheap housing in Austin I keep hearing about? I've looked at other supposedly cheap Texas cities, and I have noticed the prices are not all that low either, but lower than Austin.

When comparing to seattle you might need to look at more than just "suburbs" to find equivalence. The seattle metro is bigger (although the average commute is similar - 27mins for seattle, 25 for austin). When comparing the suburbs how far out are you comparing? We have suburbs that are really just small towns that are 30 minutes out that are dirt cheap. Some areas like up north (round rock) are more expensive, but you can go east and rents are cheap.