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Old 09-25-2007, 09:08 PM
 
674 posts, read 1,602,781 times
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Hello,

I live in Western Oaks - specifically, the Villages of Western Oaks (pretty close to William Cannon, between Convict Hill and Beckett) in southwest Austin. Several friends of mine who live in other early 80s neighborhoods (in subdivisions such as Westcreek) are moving or are trying to move into bigger, newer homes in Circle C or Meridian or even Bel Terra, much further south. They are saying that it's a good time to get out of their dated, popcorn ceiling 1980s houses... Because in a few years they think their house might appreciate more slowly, while the Circle C or Meridian homes will appreciate much higher more quickly thus making it out of reach at that time.

Is anyone here knowledgeable about these older neighborhoods in south austin? (our house was built in 1983) and does anyone share the opinion of my friends who are moving? In a newer house with more features further out going to be a better investment 8-10 years from now? I just don't see the need to build a new house right now or buy a spec home and move and have a bigger mortage, and longer commute. For one thing, I love being only 10 minutes from downtown. We eat at places on South Congress or South Lamar all the time, and it takes no time.

I am concerned a little bit about what could happen with my neighborhood with all the new retail that's gone in along William Cannon (Shops at Arbor Trails, Quiznos/ Yaghi's Pizza, A&W/Long John Silvers, 24 Hour Fitness, etc.) I wonder often, will this area go up or down? I just can't bring myself to move any further away from downtown, though -- and can't afford to move any closer.

I know it's kind of a scatter-brained, inprecise question... But does anyone think Western Oaks will go downhill over time?
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Old 09-25-2007, 09:44 PM
 
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I live in westcreek very near the Quiznos/ Yaghi's Pizza, A&W/Long John Silvers you mention. Two houses in the same area sold this summer...One for $235,000 in 5 days and one for just under $269,000 in 13 days. They had improvements that increased the value but I think the best selling point may be the schools. Patton, Small and Austin.

I myself wouldn't move farther south, I love the convience of this area.
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Old 09-26-2007, 01:59 AM
 
Location: Austin, TX
7,132 posts, read 15,655,799 times
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It's a very good question. The answer ultimately depends on you. People will enjoy having a new house, with all the current styles and amenities, and that may be enough reason for many of your friends. It might be what you want, too.. if so, you should go for it.

IMO, newer move-up communities don't do so well in the 8-10 year timeframe appreciation-wise. There will be even newer communities "just a little farther out" by that time, with whatever amenities and styles are trendy...

Meanwhile, the older, established neighborhood in SW Austin probably maintains 1) stable property values in a downturn (as it is bordered by even older desirable neighborhoods, and newer ones that were built "upscale" due to the boom -- so schools will probably stay good)... 2) potential for big upside due to location. Who knows, popcorn ceilings might be the characteristic of a desirable "close-in" neighborhood in the future, just like the bungalow style is a characteristic of the central Austin neighborhood. As they say, you can change the house, but you can't change the location. If you have been there a while, and think it's a good location, it probably is.

Now here is the other side of the coin --

If you are young, expect your income to increase, etc... it can make sense to move up after you've built some equity in a home. Obviously, the same % appreciation on a $400K home is a lot more than on a $200K home, and you might just be at the stage where that makes sense, even though it is a big stretch. Sometimes, the step-up will net you a nicer home or location and more money in the long run. However, I would personally be looking at a move-up in the other direction (closer to town). Or perhaps investment property.
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Old 09-26-2007, 07:55 AM
 
Location: Austin, TX
11,845 posts, read 27,233,973 times
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We currently live in the Villages of Western Oaks (VOWO) on the other side of Davis. Our house was built in '99, but previously we lived in a '77 house in NW Austin. Currently, we have no intention of moving, and we occasionally do have 'old VOWO' envy...the trees are wonderful and the location is great. Looking at your situation, there are two items you mention:
- Location
If you like being closer to town it is a no-brainer not to move too far out. Of couse, Circle C (or parts of it) are really not that much further.

- Investment
This is a very complicated question without an easy answer. I will plagarize some Austin_Steve
Quote:
From 2001 through 2006, price appreciation in Austin was 20% over a 6 year period. Hardly bubble numbers at 3.5% annual appreciation over a 6 year period.
Of course this is just one period of time and is an average (and you are obviously talking specifics), but if you have extra cash, CDs are returning 5%+ right now, or at least 3.5% after you take out your taxes. I have not looked at interest rates in a while, but I am assuming they are still in the 5-6% range? Really, unless you set up some very specific spreadsheet to crunch all the numbers, it is really hard to see if you will come out ahead or behind.

Personally, in our house in NW Austin, we fixed it up quite a bit (we did take out the popcorn ) and were quite happy there, except for the size (just under 1500 sf). I don't remember the exact numbers, but the house appreciated (buy price to sell price) by almost 70% over 5 years. We did dump about $15k in fix-up (and lots of labor). I could see something like that happening in VOWO - lots in Austin are not a scarcity, by closeness to downtown is. Of course, ours was the cheapest house in the neighborhood, and for percent gain you just can't beat that.

As for the new retail/commercial buildings, I think the new HEB probably added a few $ to the value of our house. As long as some semblance of SOS is in effect, the area should not become too built up, and the restaurants are just adding to the value (again, just IMHO).

Anyway, if you are planning to move solely due to investment reasons, attach a $ value to your commute time/travel time/gas and then look at the numbers very carefully. Bigger homes have bigger taxes, possibly smaller or bigger bills, and bigger mortgages. You may get a higher percent appreciation and still come out behind.
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Old 09-26-2007, 12:24 PM
 
674 posts, read 1,602,781 times
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Thank you for the replies. You both have made very good points. I was especially drawn in by the point about how a bigger, 300-350K or so house further out may appreciate more dollar wise than a 200K or so house in Western Oaks with popcorn ceilings, but with extra gas, mileage, and taxes plus the general stress of more driving, it might be better to stay closer in.

Of course as someone else pointed out, it's not like Circle C is that much farther away. (Although - the area I like is Alta Mira and all the newer stuff that is close to 1826, which is)

I guess my main issue is, I would also like a more modern house (higher ceilings, no popcorn, nicer kitchen). Do I move or remodel? I could remodel my house, but I'm wondering if I'd put too much money into it relative to all my neighbors, and that I'd never get the money back.

The part of Villages of Western Oaks that I live in is close to William Cannon. Some of the houses are nice and well maintained - and some are fairly gross. (Bad paint colors, needs repainting, weeds in yard, old cars, etc.)

It is just hard to tell who will win out in the end -- if the people here who take care of their houses and upgrade/ remodel will outnumber the people who are content to let their house be exactly as it was in 1983-1995 and get more run down, driving down the value of my house. I wish I could just go door-to-door and get everyone on board with all remodeling and taking care of their yards. Ha.
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Old 09-26-2007, 02:23 PM
 
Location: Austin, TX
11,845 posts, read 27,233,973 times
Reputation: 5570
There are two ways to remodel your house (well, lots more than two, but whatever):
1) Right before you sell it...
...to get more money out of if, or, in extreme cases, just make it salable at all. The advantage of doing this is that you can really nail what is going to make it sell (islands in the kitchen are in (or out), or pergo floors are in high demand, etc.). The downside is you don't get to enjoy any of the improvements, and if you are moving on a schedule, you will have to get someone to do the bulk of the work.

2) Right now....
...to improve your house for yourself. The upside is you may find out (before you are committed to moving) that you really do like your house and you may have the 'luxury' of doing some of the work and saving some money. The downside is that your improvements may be dated when it comes time to sell, and stuff like painting only 'lasts' so long before you need to do it again.

I did option 1, and by the time I was through I was really liking my house much better . Of course, as an investment, I have noticed that there are some areas with a little more of a run down look at that end or VOWO, and it really is a shame. I suppose it is because of the traffic on WC and concentrated commercial districtnearby, but I really don't know. Which way it will go in the future is probably not as certain as for the houses on the other side of Convict Hill.
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