Housing market 'top 10' list, so to speak (Austin, Orange: transplants, real estate market)

[Trainwreck20]

The most overvalued market in the U.S. was Austin, Texas (overvalued by 19%), followed by Los Angeles (15%), Orange County (15%), San Francisco (12%) and Riverside-San Bernardino (11%).

http://finance.yahoo.com/news/10-mos...131550950.html

[kiacook]

I wish they explained how they determined what was "overvalued." I mean, if people are willing to pay for the homes, doesn't that determine the value?

[RoadWarrior12]

Originally Posted by kiacook

I wish they explained how they determined what was "overvalued." I mean, if people are willing to pay for the homes, doesn't that determine the value?

The big variable is average income growth relative to average home price, and this is where a market like Austin gets "hurt" in these studies.

The reason why so many jobs move here? They can pay employees less than they can in other markets - this limits buying power. Just another reason we're headed for an easing back on the gas pedal in terms of home price inflation.

[balor123]

Which markets? Other than SF, Austin pay is competitive with other major cities (at least in tech). From what I hear/read, employers are moving jobs here simply because we have a large amount of quality talent that's relatively untapped. Large employers are having a hard time hiring in SF and Seattle now.

[MiaMia411]

Originally Posted by balor123

Which markets? Other than SF, Austin pay is competitive with other major cities (at least in tech). From what I hear/read, employers are moving jobs here simply because we have a large amount of quality talent that's relatively untapped. Large employers are having a hard time hiring in SF and Seattle now.

And what cities would you be talking about? Austins pay is low.

Employers are moving here for less business tax and incentives being offered, also people that are willing to take the lower pay aka the quality talent you speak of. The pay scale Austin offers doesn't compete with NJ or NY's pay scale, i just moved from NNJ. My brother makes over 6 digits, i dont see that in Austin.

[Eastcoasting]

We have been through this before...

-Sell your hut in Northern NJ for 800K
-Relocate to Austin with lateral pay
-Save on property tax
-Save on state income tax
-Certainly save on car insurance
-Buy a place in Circle C for dunno, 400-600K

Settle in for a couple years and start to complain about transplants.

Rinse and repeat.

[eileenkeeney]

Originally Posted by balor123

Which markets? Other than SF, Austin pay is competitive with other major cities (at least in tech). From what I hear/read, employers are moving jobs here simply because we have a large amount of quality talent that's relatively untapped. Large employers are having a hard time hiring in SF and Seattle now.

Then why are these companies getting tax breaks to move here, if they have other incentives?
What about tax payers money being used as part of an active campaign to get companies to relocate here?

Why do people think it is a good thing, for the current residents, for our leadership to be recruiting out of state companies to relocate here?

People must think it is a good idea, since our leaders promote it as a good thing, and even use it in their campaigns as a reason we should elect them.

Traffic gets worse, rents go higher, property values go higher (meaning higher property tax).
I haven't seen any tax relief for those already living here, due to the influx of more people.
So what benefit is there?

How much of the quality talent came here for the job? The people my employer hires come from all over the country, and then locate here for the job.
When my employer moved here (and got a huge tax break for doing so) they required their employees from other areas (some with a lower or similar cost of living than Austin) to move here. It was a requirement that they locate some number of employees here, to get the tax break.
This was accomplished mostly by moving people here.
Those required to move here did NOT come from high cost bay area (those employees are now being asked to move, but were not part of the required moves 5 years ago).

As more people relocate to Austin, the cost of housing will continue to rise. The tax revenue collected from this rise will likely not be used to fund things that will decrease traffic, or improve schools and parks. From what I have seen, these type of improvements end up as ballot measures for raising our taxes even more. One might think that just the increase in collected taxes, from the additional residents, and the increased home values, would leave some money for the needed projects to accommodate the added population.
But this is not what is happening.

So what advantage is there, for the current middle class residents, by having more high tech companies relocate here?
For the small business owner, who sells something the new residents will need, I see an advantage.
For the government, who benefits from the increased tax revenue, I see an advantage.
For those who are selling their homes, to move out of the area, I see some advantage.
But I see zero advantage, and plenty of disadvantage, for most of the current residents.

[balor123]

I checked about two years ago when I moved here and that was the case. It seems you are right that Austin pay is lower again. You can see pay here on PayScale. Boston is ~5% higher here but on a few other sites pay in other major cities seems to be 10-15% higher. Total cost of employment is probably much lower, considering healthcare, real estate costs, etc. I haven't found it difficult to find six figures here but it depends a lot on your qualifications, market, etc.

One thing I've noticed is that Austin has a higher amount of employment from startups, which might explain why the averages are different but not what I've seen from personal experience. I don't work at one and larger companies tend to compare to direct competitors, rather than industry averages. Startups tend to pay lower salaries, though total compensation after equity may be higher (and uncounted in these stats likely).

As I mentioned, my impression has been that employers are moving here primarily for talent, not pay savings. I don't think those savings are significant enough to warrant the costs and they could go elsewhere for bigger savings if that was their primary goal.

[austin-steve]

You have to consider the source - Trulia. Trulia and Zillow or not real estate companies, nor are their "economists" using real data. In this article, they use list prices.

Austin has been frothy the past two summers, and prices have jumped for sure. But calling a real estate market "over priced" without using the historically reliabe metrics for doing so is simply junk news, sensationalism meant to create clicks and page views and buzz for the media brand.

If Austin was indeed 19% over priced, does that mean a $500K home is really right now worth only $405K? And should a buyer wait for the price to fall?

Steve

[schmob]

Any thoughts on Lakeway properties. That area is so built up now, it's unrecognizable from the elite, only high-high income small town it once was. Is it still worth in vesting in?