Austin-area median home prices hit all-time high (Cooper, Happy: sales, 2015)

[scm53]

From Statesman.com

Central Texas home sales soared nearly 13 percent in March, and the area’s median price of those sales reached an all-time high of $255,000, new figures show.

Reiterating a recurring theme, Barb Cooper, president of the Austin Board of Realtors, said the local housing market “is the least affordable it has ever been.”

[10scoachrick]

Rutt-Roh !!!

[Austin97]

would be interested to see the median home price to median income ratio

[scm53]

Originally Posted by Austin97

would be interested to see the median home price to median income ratio

In 1990, the median income was $39,400. In 2014, it was $75,400 -- up 91%

Median house price in 1990 was $73,000. In 2014, it was $239,900 -- up 228%

Or so a presentation this week by city demographer Ryan Robertson to the Regional Affordability Committee says.

[Novacek]

Originally Posted by scm53

In 1990, the median income was $39,400. In 2014, it was $75,400 -- up 91%

Median house price in 1990 was $73,000. In 2014, it was $239,900 -- up 228%

Or so a presentation this week by city demographer Ryan Robertson to the Regional Affordability Committee says.

Right, but what was the interest rate? Remember, the vast majority of the true cost of a home for most people is the financing.

A 200k home @6% and a 200k home at 3% have totally different affordability.


Looks like in 1990, the prime rate (not exactly the mortgage rate, but I'll use it as a proxy) was 10%. And it's about 3% now.
Prime Interest Rate History

$75k @10% for 30 years = monthly payment of $661

$239k @3% for 30 years = monthly payment of $1,011
($0 down in both cases)

Seems like incomes have increased 91%, but the actual cost of buying a home has only increased 53%. By that measure, Austin is _more_ affordable than it was in 1990.

(You can get slightly different numbers by using different length mortgages, putting down 20%, using slightly higher rates to account for more likely mortgage rates, etc. , but it still won't be 228%).

[10scoachrick]

Lies, Damned Lies...and Statistics !

[HappyTexan]

Originally Posted by Novacek

Right, but what was the interest rate? Remember, the vast majority of the true cost of a home for most people is the financing.

A 200k home @6% and a 200k home at 3% have totally different affordability.


Looks like in 1990, the prime rate (not exactly the mortgage rate, but I'll use it as a proxy) was 10%. And it's about 3% now.
Prime Interest Rate History

$75k @10% for 30 years = monthly payment of $661

$239k @3% for 30 years = monthly payment of $1,011
($0 down in both cases)

Seems like incomes have increased 91%, but the actual cost of buying a home has only increased 53%. By that measure, Austin is _more_ affordable than it was in 1990.

(You can get slightly different numbers by using different length mortgages, putting down 20%, using slightly higher rates to account for more likely mortgage rates, etc. , but it still won't be 228%).

You didn't include property taxes which is also a part of the cost.

Between 1990 and 2008 Austin property taxes increased 340%. (couldn't find 2008-2014)

http://www.ttara.org/files/document/...2ed718fe53.pdf

[AustinDude360]

This housing market is odd. While I see homes sell way over asking I also see similar homes in the neighbors see price reductions or sit on the market. I know part of that is overpricing the home at asking and not putting in the work to sell your home, but I'm a little lost myself. I'm just happy to purchase a home about 2-3K over tax appraisal value in 2014 which I figure is a good sign.

[Novacek]

Originally Posted by HappyTexan

You didn't include property taxes which is also a part of the cost.

Between 1990 and 2008 Austin property taxes increased 340%. (couldn't find 2008-2014)

http://www.ttara.org/files/document/...2ed718fe53.pdf

That's an _entirely_ different issue, and unrelated to home prices.

Property appraisals could be cut in half tomorrow for everyone, and property taxes wouldn't change (the tax rate would just double). Valuations are the _denominator_ to the budgeting process, not the numerator.


Though you're also looking at the completely wrong number. That 340% increase includes a near doubling of the population.

Edit: It's also completely the wrong number because that 340% increase was for Texas as a whole, not Austin.

[Sam.adams33]

Originally Posted by Novacek

That's an _entirely_ different issue, and unrelated to home prices.

Property appraisals could be cut in half tomorrow for everyone, and property taxes wouldn't change (the tax rate would just double). Valuations are the _denominator_ to the budgeting process, not the numerator.


Though you're also looking at the completely wrong number. That 340% increase includes a near doubling of the population.

Edit: It's also completely the wrong number because that 340% increase was for Texas as a whole, not Austin.

I don't think it's an entirely separate issue. You were talking about affordability - the rising cost of property taxes, and rising tax load is a piece of that. You can be pretty confident that the $75K house in 1990 did not have the same tax bill that the $255K house does in 2015.

Same as the mortgage rate logic. It's all a piece of the "monthly payment" that determines affordability for the 99%. I'm not going to get into one of your multi-page, thousands of underscores, bickering contests - but the bottom line is that the overall cost of housing in Austin is rising, and in many folk's perception - rising faster than wages over the past few years.