Areas that you think will go up in value? (Austin: rent, house)

[HappyTexan]

When I came here I rented for a year as well and spent weekends driving around.
Where I ended up wasn't even on my list of "places to live" that I had when I arrived.
Visiting for a week or so is way different then living here. Think in terms of months before you start to get a feel for things.

[RoadWarrior12]

Originally Posted by emeraldcitymer

Yes- if we bought in a year we wouldn't care if we were in a top rated district like eanes or lake travis. Looking too much into school districts now really limits what we can get in the budget of 425k or forces us to increase our budget.

This is the plan:

First- Arrive and rent a place for 1 year to get a good feel of the city.

1. After one year of renting, buy in an area that is "more affordable" than top hoods like the Eanes ones.. for around 425k. Live for 5 years or so.. Maybe have kids in this period.

2. Sell starter house before kids enter elementary school.

3. Buy another house and this time really look into the schools which probably means spending more than what we sold house 1 for.

I am 100% against buying right away. I want to rent for one year. We don't know if love Austin enough to stay and I don't think it's a good idea to buy a house when starting a new job.. too risky.. sure houses might be more in 2015 than they are now, but at least we won't get stuck in a neighborhood we don't know much about.

You've fallen solidly into buying the school district hype. The top HS in Austin isn't even in one of those two districts, and kids (that I'm aware of) have never attended a district. They've attended schools.

Seriously, rent. And do so with an open mind.

[gpurcell]

Come here. Figure out how easy it is to get to and from where you are working. Then narrow down housing choices.

Transportation is the ruling, dominant variable in Austin.

[austin-steve]

Originally Posted by emeraldcitymer

...

If the market really is increasing as much as you are suggesting, in 5 years, we will have benefitted from the increase in housing when we sell our own house, our salaries will be higher and we will can use the equity/ profit from the house to upgrade into a better house. Without having tied up so much into housing..

I have heard so many conflicting things about the housing trends.. is the next 12 months a good time to buy?

You will have benefited from appreciation of your smaller home, but the move-up home you will want at that later time will have appreciated by even more (dollar for dollar) because of the higher basis, and may have increased at a higher percentage than your salaries if your salary increases will be in the 3-5% range. Waiting to buy the bigger home works financially in a flat or declining market, but not in a hyper-appreciating market. The market could very well run away from you in 5 years as it unfortunately has now for many renters who waited.

NY Times just updated its Rent vs Buy Calculator.
http://www.nytimes.com/interactive/2...ator.html?_r=0

Even renting a home at 0.5% per month of sales value (for example a $400K home for $2,000/mo), which would be below market rent, doesn't cause the "Rent" to be the better choice.

My bottom line point is:

1) renting for a year is safe, no argument there, but you'll pay more on your purchase in a year so it might not be financially better.

2) Buying a home you can grow into instead of grow out of is the better financial move when you do buy. I'll let you do your own math, but don't forget to include transaction costs, the hassle/stress of moving, appreciation, and the uncertainty/possibility of rising prices reducing your candidate areas 5 years from now compared to what you can afford today, at extremely low interest rates as well.

Good luck and welcome to Austin!

Steve

[gpurcell]

Originally Posted by austin-steve

You will have benefited from appreciation of your smaller home, but the move-up home you will want at that later time will have appreciated by even more because of the higher basis, and may have increased at a higher percentage than your salaries if your salary increases will be in the 3-5% range. Waiting to buy the bigger home works financially in a flat or declining market, but not in a hyper-appreciating market. The market could very well run away from you in 5 years as it unfortunately has now for many renters who waited.

This. When I bought in North University at 185Kish bigger houses in Hyde Park/North University were in the mid-to-high 200s (as I recall). Even though we have had had amazing appreciation, the gap between our house value and those house values has grown from 80-100Kish back then to at least double that amount today.

[RoadWarrior12]

Originally Posted by austin-steve

You will have benefited from appreciation of your smaller home, but the move-up home you will want at that later time will have appreciated by even more (dollar for dollar) because of the higher basis, and may have increased at a higher percentage than your salaries if your salary increases will be in the 3-5% range. Waiting to buy the bigger home works financially in a flat or declining market, but not in a hyper-appreciating market. The market could very well run away from you in 5 years as it unfortunately has now for many renters who waited.

NY Times just updated its Rent vs Buy Calculator.
http://www.nytimes.com/interactive/2...ator.html?_r=0

Even renting a home at 0.5% per month of sales value (for example a $400K home for $2,000/mo), which would be below market rent, doesn't cause the "Rent" to be the better choice.

My bottom line point is:

1) renting for a year is safe, no argument there, but you'll pay more on your purchase in a year so it might not be financially better.

2) Buying a home you can grow into instead of grow out of is the better financial move when you do buy. I'll let you do your own math, but don't forget to include transaction costs, the hassle/stress of moving, appreciation, and the uncertainty/possibility of rising prices reducing your candidate areas 5 years from now compared to what you can afford today, at extremely low interest rates as well.

Good luck and welcome to Austin!

Steve

This is all well and good, when you know EXACTLY where you want to buy. Rolling in sight unseen, and buying your "move up" home is regret waiting to happen.

Nobody here can accurately predict exactly what the next twelve months will bring, anymore the the OP can throw a dart at a map and say "here it is".

[hts]

In the history of the universe, has a realtor ever not recommended that *now* is always the best time to buy a house, lol?

[austin-steve]

Originally Posted by RoadWarrior12

This is all well and good, when you know EXACTLY where you want to buy. Rolling in sight unseen, and buying your "move up" home is regret waiting to happen.

Nobody here can accurately predict exactly what the next twelve months will bring, anymore the the OP can throw a dart at a map and say "here it is".

Buyers do it every day. It's simply trading one risk for another. Agreed that it's not the right move for everyone though. And, as the archives of these forums show, it's not hard that to narrow things down in the Austin metro areas for those who know what they want, which is usually a specific location close to work, good schools, and nearby lifestyle amenities within a size/budget parameter.

Steve

[llkltk]

Originally Posted by emeraldcitymer

If you were interested in buying a house or a townhouse that you would live in for around 5 years.. assume no kids or kids that haven't started school and plan to move in about 5 years to get into a better school district/ bigger home.. which areas would you look for a 425k budget 2-3 bed/ 2+bath.. with the intent that the area would probably remain solid or go up in the next few years? We would possibly be interested in doing renovations. We are also open to Lakeway, TX but does anything think it might have issues holding its value?


We are renting first but considering buying a home in 1 year. Work from home.

SW Austin is your best bet for appreciations. Circle C, Meridian, Reunion Ranch, etc.

[hts]

While I'm on board with the SW Austin (Dripping Springs area) for decent appreciation, I'm not sold on Reunion Ranch (it seems to be a lovely community, but a bit remote from the schools, etc., so while I looked at it as a possibility for my own relo, I actually chose to move much closer to town and would expect others to perhaps arrive at a similar conclusion).