Are people leaving good paying jobs to move to Austin? (Houston: real estate, big house)

[southwest1230]

Sheri, it sounds like a "cashing-out" effect per the boasting. In other words, if you
"cash-out" from a state with far higher home values, get something either the same
with cash in the bank, or a much larger house, you are doing great. What I want to know is if folks would be coming here from California if they DIDN'T have that cha-ching from the home sale to bring over/parlay here in Texas. In other words, is THAT the only attraction Texas has to offer out-of-staters in places like the west and east coast
with much higher home values? Let me say it this way. How much of an attraction is Austin if you
remove the Real estate issues?
> Does it have the same cultural amenities? Libraries, museums, music venues, etc.
> Does it have the same physical beauty?
> Does it have the same outdoor recreational opportunities?
> Pro sports/recreational sport opportunites?
> Beaches, bodies of water, mountains, etc. ?
> Job opportunities, including union representation and living-wage jobs?

I would say the west coast has all the above all over Austin, and the ONLY driver attracting west coasters would be the perceived home values, which, as we said, gets eaten up anyway with taxes. I will also add the proviso that there is no guarantee that home values will continue to rise as they have in Austin the last couple years. They were stagnant re 2001-5,
and may get back to stagnant mode if the tech and general economy slows or goes into a recession. Dallas and Houston will never reach fast appreciation mode because of the nature of the geography surrounding them, all flatland without any natural barriers to block growth, or any zoning or planning boards to prohibit the same. Austin's higher priced homes are just a reflection of the hills, and a slight geographic barrier in the west because of it, along with a small modicum of building and zoning mandates that may be large compared to the rest of Texas, but very weak compared to the strong barriers to building growth in California. Builders have to spend literally YEARS in california courting the gov't bodies, buying land, appeasing environmental groups, and so on, In Texas, including Austin, they have essentially carte blanche, which will always keep the appreciation quite low. Finally, as the real estate market slows, even out here in Texas, you will just get the initial bang for the buck, and thats it. I would say that, over time, as things work themselves out, you will make more by selling your house in cali in 5-7 years after all is said and done, compared to the quick cash-in in Austin. Finally, who is to say that home values won't depreciate in Austin as well?

[southwest1230]

One last point....there is much to be read in low home values. They just don't happen in
a vacuum. If a state has abnormally low home values per the average, there is something going on tangibly behind the scenes to make that so. The obvious things you can read into a low average home price are the following
1.) Salaries are low in comparison to the national average as well
2.) There are few barriers for builders to build, per gov't agencies and geography
3.) The amenities/opportunites are not attracting high paying corp/union jobs
4.) The region it is located in has a low income level as well(The south, in Texas' case)
5.) There are few expectations for further housing/income growth as well

The ONLY reason Austin has superceded these issues to date is its perceived singularity.
People out-of-area see it, in their minds eye, as superceding those issues, for some
imagined quality-of-life fantasia they imagine, not realizing that the state issues I
mentioned fully cancel out those qualities anyway(next to last in spending per pupil,
lack of spending on things they consider expendable like libraries and parks, red
state attitudes, etc.) Californians seem to think they can create a little west coast out here
as well. Austin will never be even a rough approximation of the west or east coast
in any respect. They will NEVER build the proper infrastructures here, will never get
away from the haphazard lack of zoning which leads to a ugly and unpleasant living
environment in the newer areas, and so on. In other words, this is Texas, deal with
it, kind of thing. I can see a lot of these folks going back the other way in a few years
after they realize their mecca wasn't what they thought, and I'm sure the locals will be the first to show them the door.....

[Trainwreck20]

I would add the property taxes (with annual appraisal updates) have restrained the housing values significantly, and also helped keep speculators away (at least in the hordes seen elsewhere).

[southwest1230]

crbc, your description of Austin as a cleaner/safer New Orleans with just 7 blocks of fun is right on the money. Thats exactly what I saw it as. The other 95% is a nondescript mess of mega-apartment complexes and big-box franchises. Per Texas Quality-of-life issues, I would say that Houston and Dallas win hands down. Per the issues vis-a-vis Californians, I truly think they are germane to them. They have a mindset there that they will have great trouble exercising in Texas. They come here almost solely for the home values, not realizing that they will have a difficult time adjusting to the different world here. You can say that about all other folks coming from relatively high tax areas as well. Simple as this..If you want amenities, you pay taxes. If you rely on private enterprise to provide you with what you need, you get the mega-apartment complex/ big-box sprawl that, coupled with utter lack of zoning, ends up with a pretty awful living environment. There are far more important drivers than home values to attract potential relocatees. If it was just the home values, you could move to any non-descript state like Arkansas, Mississippi, Indiana, West Virginia, etc. People act enmasse like lemmings, and at this time many of those lemmings are keeping the U-hauls busy relocating here. I lived in Las Vegas for a few years in the 90's, and saw the same thing. You could see people almost palpably confused, looking like they were confused themselves as to why they were there. Also, it tended to attract marginal folks who had nothing going on in their home states, and wandered like Gypsies looking for something better. I think the people coming to Austin aren't quite as down and out as the relo folks in Vegas were in the 90's, many of who didn't even have jobs. Still, I think many of these relocatees couldn't hack it in their home state, and are wandering all over looking for what they perceive as better opportunities. If thats the case, which I believe it is, you can look for all that to stop once the buzz settles. Again, the locals will be the first to open the door so they can start their exodus back out, once the fantasia fades.

[sheri257]

Originally Posted by southwest1230

One last point....there is much to be read in low home values. They just don't happen in a vacuum.

I agree.

I can only speak to nursing but, there's definitely a lot going on behind the scenes in Texas ... it may be a good example of why incomes and, consequently, home values haven't risen much in Texas. Because nursing is a profession that requires four years of education, there's a labor shortage and you typically can't export nursing jobs overseas.

So you'd think Texas nurses would be making more, and maybe they do compared to other Texas professions but, why is Texas nursing pay so much lower than California pay?

For one thing, Texas is a right to work state. So, even though there are efforts to organize nurses there, the laws make it very difficult to do so.

The hospitals don't want to pay nurses more in California ... the difference is that unions make them pay. There's actually several nursing strikes happening in California right now because, when workers use their leverage and strike ... that's how they accomplish better pay increases.

Texas, by contrast, is an at will employment state. You can be fired for any reason at any time. So, you pretty much have to go along with management if you want to pay the mortgage. In Dallas there are over 100 hospitals that actually maintain a database where any manager can blacklist an employee for any reason they like.

If you try to get another job at a different Dallas hospital, forget about it if a manager decides to put your name in that database. Because you're now on the blacklist for over 100 hospitals there and are basically shut out of the marketplace all together.

Of course, this also allows the hospitals to manipulate wages to their advantage and pay less.

So ... I don't know if this kind of stuff is happening in other Texas professions but, IMO, this is one of the reasons why Texas incomes are so much lower ... even with skilled, in demand professions like nursing where there are labor shortages.

[southwest1230]

In answer to people paying cash outright for houses in Austin, parlaying the diff between the new and old one, don't forget that there must be SOME equity build-up as well. I can see it if they held onto it a few years, AND cashed out the appreciation in the new Austin house. There are a few problems with that, however. Now, it is much harder to sell a house in high-priced cali cities. Many are depreciating, like Florida. I think the ones that got out and parlayed the difference in Austin the last couple years did okay, just like the investors. I'm not so sure that situation works anymore now, with the palpably different macro environment we are in now in RE. Loans are tightening, and prices are declining, perhaps even in Austin soon. Even more germane, those that aren't selling houses in cali, coming here as renters, get none of the cash-out effects. With the far lower pay scale, tightening loan standards, and increasing home values
in Austin, that move really makes no sense whatsoever for renters and young couples starting out. For the entrepreneurs bringing a fortune out here, or the handful of folks moving here to work at relatively high-end tech jobs here, maybe, but the vast majority of folks will be priced out in Austin as well, and will just end up at one of those mega-apartment complexes you see everywhere.

[southwest1230]

http://www.offrampbums.com/kucinich.jpg (broken link)

Twange, hey, at least Cleveland gave us the "gadfly of Cuyahoga", Denny Kucinich!
I met the boy mayor in New Hampshire during the primaries in 2004.....good guy, but
what a character! A Cleveland Character, I might add, of proud Croatian stock.
I would say Cleveland has more "characters" per capita than any city in the US.
How do I define a character? Someone naturally funny without knowing it or even trying,
down-to-earth, gritty, smart, and wedded to the old neighborhood. I have lots of family
there, so I do feel a kinship with the good folks there. As my ancestors came from
Poland in the 1890's, about half stayed in Cleveland, and the other half contined
on to Chicago to work in the mills and such. They fought in all the wars, including WW1,
and I still get a kick out of learning about the old neighborhoods. I would imagine you
grew up as a suburbanite as well. Yeah, those old rest belt cities were awesome in their
day. Prob the last vestige of the old days now would be the sports alliances.
Godspeed to the Indians. It does seem like every year a team from that division makes
it to the World Series. Too bad Detroit couldn't cover last year like my White Sox in '05.
I think this is the Indians' year....Go Tribe!

And dig the very un-PC cartoon below!

[sheri257]

Originally Posted by southwest1230

Now, it is much harder to sell a house in high-priced cali cities. Many are depreciating, like Florida. I think the ones that got out and parlayed the difference in Austin the last couple years did okay, just like the investors. I'm not so sure that situation works anymore now, with the palpably different macro environment we are in now in RE.

True ... I really was referring to the boom era, which is now past. I seriously doubt many people will be cashing out now.

[twange]

Originally Posted by southwest1230

[IMG]Someone naturally funny without knowing it or even trying,
down-to-earth, gritty, smart, and wedded to the old neighborhood. I have lots of family
there, so I do feel a kinship with the good folks there. As my ancestors came from
Poland in the 1890's, about half stayed in Cleveland, and the other half contined
on to Chicago to work in the mills and such. They fought in all the wars, including WW1,
and I still get a kick out of learning about the old neighborhoods. I would imagine you
grew up as a suburbanite as well. Yeah, those old rest belt cities were awesome in their
day. Prob the last vestige of the old days now would be the sports alliances.

Pretty much nailed it! That's what I love about the place! My wife's Dad came off the boat from Croatia when he was 5. Lived on a farm just west of the city...nothing but ugly shoe-box suburbs and browned-out factories there now. I grew up in a 60s suburb on the very edge of the country. 30 minutes from downtown, but miles of woods in the backyard. They're all gone now though

Yep, sports rule there now.

Go Tribe!

[twange]

Oh BTW, I love Dennis K. His headquarters were right down the street from where I lived. He must be standing on a dais in that photo cuz he's a hell of a lot shorter than that gal in real life

...maybe he's wearing platforms and she's wearing flats