Austin Market has truly gone to **** (Houston, Dallas: mortgages, credit, loan)

[jeffdoorgunner]

Originally Posted by CarnivalGal

Oh, yeah. It's bananas. We could probably get about $800K - $850K right now for our house. We've been here for 16 years, and I absolutely love my house, but even I don't think it's worth $850K. But apparently lots of people do.

its the toilet paper syndrome.

[Ivory Lee Spurlock]

I have a question, or more accurately, questions. If somebody bought a house 25 years ago for $65,000 and sold it today for $500,000, about how much would the city collect ? What about federal and state taxes? About how much could a person expect to have left after everybody gets their chunk?

[blakely]

Originally Posted by Ivory Lee Spurlock

I have a question, or more accurately, questions. If somebody bought a house 25 years ago for $65,000 and sold it today for $500,000, about how much would the city collect ? What about federal and state taxes? About how much could a person expect to have left after everybody gets their chunk?

Depends on a lot of things, but a very simplistic answer....

Assuming you lived in the house for 2 of the last 5 years, $250,000 of the gain is tax-free if you're single, or $500,000 of the gain is tax-free for married couples filing jointly.

For those of us who live in Texas, no state taxes.

City collects nothing.

Lots of other things can affect the answer to your question, such as...did you invest $$$ to improve/remodel the house? Those costs can be added to your basis (decreasing your gain). Improvements would not include regular maintenance. The list goes on....

[Trainwreck20]

The city gets zero, the state gets zero. The feds get zero in the above example if you are married filing jointly. If you are filing single, then (500,000-65,000-250,000-cost of improvements) would be subject to long-term capital gains. So, at most, 185k capital gains. Capital gains would be 0 for low-income, 15% for most people, and 20% for high-income.

The capital gain can be reduced due to improvements - a new, higher efficiency AC (almost certainly occurred somewhere), upgraded fencing, remodeling, and even landscaping. The closing cost of buying the house can also be deducted. Some info here:
https://www.irs.gov/publications/p523

[Ivory Lee Spurlock]

Ok...Would it make a difference if you had an exemption on the aisd property taxes for most of those 25 years?

[Trainwreck20]

Originally Posted by Ivory Lee Spurlock

Ok...Would it make a difference if you had an exemption on the aisd property taxes for most of those 25 years?

No.

I assume you mean that the school taxes were frozen? Everyone has a small school tax exemption (among others) on their property, after 65 and for a few other reasons, the school taxes freeze. In any case, it doesn't relate to your (potential) federal capital gains tax. Even if the property had some special exemptions or paid no taxes at all on the property, it wouldn't affect it.

[riaelise]

Originally Posted by ashbeeigh

Agreed. Well, at a normal price I’d send it to my parents to consider, but there’s nothing million dollars worthy there. Even thinking about taking a left onto 1626 gives me anxiety, too.

it's definitely overpriced when you consider that a slightly smaller home recently sold for 442k in the same neighborhood..

[Ivory Lee Spurlock]

Ok, thank you all for your information. It's very helpful.

[austin-steve]

Originally Posted by Angelfan760

Spoken like a true Realtor..."Its a great time to buy, better get in now before its too late". We just had a year financially that was only rivaled by the great depression. The Dow as at an all time high despite this. Why because the FED has pumped free money into the market. You have some of the lowest inventory on record because people are scared (an emotion) to list their homes and have strangers in it. You have families moving across the country leaving oppressive states that mismanaged the covid crisis...once again driven by emotion. People moving out of downtown because of being cramped inside during covid....Covid will end, the tax bill will come due, and when it does you will still be telling people "its a great time to buy" because that's your job. A healthy market does not have people offering $100-150k above asking, waiving inspections and appraisals, etc...I have to disagree.

You discount what I say by calling me a "Realtor" (I actually don't like most Realtors, save for the exceptionally outstanding ones I know, most are not good), then you go on to write what can only be called a bunch of ... uh ... "opinion". Pure rubbish. Cite your sources or admit that you're just sharing your "Opinion" and have no actual data to back it.

Yeah, I'm a real estate Broker (semi-Retired) but also a longterm investor in the Austin market. I've been here since 1985. I've seen the ups and downs, which we call "cycles". I've seen "irrational exuberance" and I know what it looks like. I have a data-based approach to my thinking and observations. I'm not "salesy" or trying to puff the market.

You might want to go back to the forum threads from 2008-2011 and read what the "chicken little" posters like you were saying about the Austin market back then, and what I was saying, and see what happened, and how stupid all of those prognostications about a crash look in retrospect. Lots of arm chair quarterbacking back then too. Meanwhile investors were scooping up homes languishing on the market that have far exceeded the expected appreciation.

I maintain that anyone who needs a house right now, and is ready, willing and able to buy one, will not benefit from "waiting" for "prices to drop". It ain't gonna happen. It is a structural impossibility from a production standpoint as well as many other measures.

Am I happy about the boom? No, not really, even though I am being enriched because I own properties (not selling any of them, keeping long term as they will continue to go up). I feel bad for my daughters, my friend's kids, other first time young buyers, as well as mid-career move-up families who are now priced out.

My "want" is that a balanced market exist where a median income earner can purchase a median value home. There are many reasons that no longer exists, but the Affordability train has left the station in Austin and is not coming back.

Anyhow, you go ahead and believe what you want. Go ahead and tell me what I'm getting wrong.

[Need4Camaro]

I also agree that unfortunately waiting is a gamble at best. The market can swing either way but I don’t particularly feel that from this point inventory will ever meet demand. We are so far behind that even when more inventory comes online, it will only fill what is backlogged as far as demand is concerned, not new demand ... there was a saying that floated around here that stated today was your fastest commute ... I also feel a similar anology holds true for Austin’s RE market ... today was the most affordable day to purchase. I just don’t feel there is such thing as a normal price for a home. A homes value is whatever the public is willing to purchase it for, and unfortunately Austin’s market is being enriched by people who have purchased smaller homes with less amenities at prices much higher than what we are used to. In reality, you could actually say Austin is merely catching up with its buyer base in terms of RE prices ... it only happened much sooner than I thought it would.