Is east of Downtown overpriced? (Austin, Haskell: foreclosure, rent, crime)

[jdevelop2]

My wife an dI are considering building a house on the east side of downtown (between MLK, Pleasant, Holly, and 35). However, lots start as $120k and go up but the houses you see being built don't seem to justify this much for lots. Are they overpriced at the moment?

Is this area really likely to continue appreciating in the next few years?

Thanks in advance!

[verybadgnome]

There is a tendency for builders to try to build something that does not stand out too much. Hence you will see old 1910 homes of 1,000 sq. ft. with another 1k sq. ft. subtly added onto the back.

I would not pay more than $150k for a lot and that would have to be a nicely sized and situated one. If you can be patient you may be able to pick up a tear down foreclosure for $90-110

Homes in good condition are going for $200-250 sq. ft. Is that overpriced? I'm not sure, but it certainly isn't a bargain when you consider property taxes. I justified paying $190/sq. ft. for a home in average condition because I bought in a neighborhood that allowed 2nd units on lots. That is if I was every unhappy with my residence I would build a 2nd unit and then rent out both. With rents at $2/sq. ft./month that wouldn't be hard to do and be in the black on a month-to-month basis.

The cap on future appreciation on the east side is tied to the public schools. Until they are improved their will be an artificial ceiling on home values.

[Austin97]

Originally Posted by jdevelop2

My wife an dI are considering building a house on the east side of downtown (between MLK, Pleasant, Holly, and 35). However, lots start as $120k and go up but the houses you see being built don't seem to justify this much for lots. Are they overpriced at the moment?

Is this area really likely to continue appreciating in the next few years?

Thanks in advance!

I think so. East austin is definitely gentrifying and that is causing short term supply/demand issues. Sellers are trying to take advantage. However I think there is enough latent supply that the prices shouldnt be that high. Latent supply is people that probably would take the price if offered but dont actually have their house on the market.

For example, there was a time when my house was "worth" 600K. If someone had offered me 600K I would have taken it. But I did not have my house on the market. I think east austin is like that right now.

People are speculating so prices are fluctuating wildly. A house on town lake (right on town lake) was on the market for 180 or so about a month ago. It sold, now the houses all around it are on the market for 330

[Komeht]

Originally Posted by jdevelop2

My wife an dI are considering building a house on the east side of downtown (between MLK, Pleasant, Holly, and 35). However, lots start as $120k and go up but the houses you see being built don't seem to justify this much for lots. Are they overpriced at the moment?

Is this area really likely to continue appreciating in the next few years?

Thanks in advance!

Yes. Although I would definitely differentiate between priority north of 7th St and between 7th and Town Lake.

The area between 7th and Town Lake I35 and Pleasnt Valley definitely is hot right now and I do not see any slowing down. Each home that gets renovated, each block that gets gentrified adds to the interest and excitement. The ultra high costs of living anywhere in proximity on the west side and in downtown are adding fuel to this fire. Couple this with the trend that will last for next few decades of people leaving the suburbs, flooding back to the cities, eschewing long commutes...east side has definitely reached the tipping point.

North of 7th its much more hit and miss, with areas closer to I35 definitely developing first. If your perspective is long enough it will almost all continue to grow and get pricier.

North of MLK is also dicier, but Mueller, Cherrywood, French Place are all considered hot areas and not likely to experience a downturn unless the local economy experiences a downturn. There is a lot of momentum right now and theses areas can still get you close to downtown for under 500K.

[Komeht]

Originally Posted by Austin97

People are speculating so prices are fluctuating wildly. A house on town lake (right on town lake) was on the market for 180 or so about a month ago.

Wished I had seen that! I would take anything on the lake, in any condition, at that price.

[clarksvillemom]

I agree with the appreciation being tied to schools somewhat, but I think that it will appreciate even without the schools vastly improving. Reasons - there are lots of young no kids people as well as retirees moving here and the east side is essentially the last area close to downtown (very close!) that is affordable. East Austin just made some mag's list of "hipster neighborhoods." I think schools will become less important as that area continues to be hip/hot. And, I wouldn't count on the schools anywhere in Texas improving anytime soon with the legislature and gov we have.

[verybadgnome]

Originally Posted by Komeht

Wished I had seen that! I would take anything on the lake, in any condition, at that price.

If it was the one on Haskell st. it actually sold for $225k or 25% above asking price.

[Komeht]

Originally Posted by verybadgnome

If it was the one on Haskell st. it actually sold for $225k or 25% above asking price.

Still good, the only thin I see are tear downs with "potential for lake views"...sorry I missed out on that

[riaelise]

Probably will need to clean up the crime as well, since it is still perceived as a high-crime area.

[Komeht]

Originally Posted by riaelise

Probably will need to clean up the crime as well, since it is still perceived as a high-crime area.

Yeah, but the areas are changing fast...I do think there's more of a challenge in this regard north of 7th