Austin Market has truly gone to **** (rental, camp, place to live)

[BobPhipps]

Originally Posted by AMJ27

We were really surprised at how much more expensive home owners insurance was in TX when we moved here in 2010. Our policy was triple what we paid before for a solid policy with a small ($250 or $500...can't remember) deductible. Most policies here have a 1% of your home deductible. Utility prices were also higher in TX, especially water. Definitely something to keep in mind when moving here.

Compared to what?

I already put a link in post #167 which states the average insurance cost being approximately $1,100 per year more in Texas. But as stated, most of this stuff is so relative. Our home insurance is $600 less than what we were paying. Our electricity bill will be less, but water will be more. Ultimately, rather than get into the individual scenarios (when it comes to advising anyone on expectations), I usually refer people to a COL calculator. It seems to make the most sense to me since the individual can look at the factors that apply to them, and the work has already been compiled by professionals that analyze this type of thing. And that includes comparing specifically to where they currently live and where they will be moving to.

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[riaelise]

Originally Posted by AMJ27

Good luck with that. Younger millennials might be too young to have experienced when the housing bubble did burst in 2008. This doesn't feel the same to this Gen X who lived through it as a homeowner in a state that was significantly impacted by it all. After we moved here, we laughed when our Austin neighbors whined about their homes not appreciating at all during the housing crisis a couple of years before. Try watching all of the homes in your neighborhood losing 50% of their value and your nice middle class community being riddled with short sales and foreclosures. Your choice was to stay put and cross your fingers that you weren't in situation where you had to move (job loss, job change) or get out via a short sale/foreclosure because you needed to move for whatever desperate reason and you owed $100,000 more on your home than what you could sell it for. People with the means were writing checks and paying out of pocket to sell their homes to avoid the ramifications of a short sale. We had been in our house for a while and had more than average equity which allowed for us to not be underwater with our mortgage, but we were the exception. It's actually why we were able to sell our home because we were one of the few that weren't a short sale (which buyers were avoiding because it was such a mess to buy a distressed sale).

This situation doesn't feel the same at all. Lending practices are different and the demand for homes, at least in my neighborhood, seems to be the result of population expansion in our city not because of shell game being played in the real estate market. Pre 2008, it felt like more of a hobby with people buying homes with ARM loans that they'd live in a year or two before selling to cash out their equity and move to another bigger home in a neighborhood down the street. People were also getting approved for mortgages that they couldn't afford and aggressively refinancing. I worked with a woman who had some deal with her original lender where they could refinance for free and she was refinancing every 6 months. She loved it because it meant she wouldn't have a mortgage payment for a month, and this was a highly educated professional woman making six figures married to someone with an equally lucrative career.

The current scenario here with the housing market does not feel like the games that were played leading up to the previous housing crisis. People have been saying we've been in a bubble for 6 or 7 years as the homes have been appreciating rapidly and worried that they've overpaid for their homes. Meanwhile, their homes have doubled in value. I think in a worst case scenario, Austin will experience a stagnation in home prices similar to what Austin experienced in the 2008 housing crisis opposed to a bubble bursting, but I'm not even sure if that will happen considering the continued population growth in Austin. In a nightmare scenario, I could see the bubble bursting a little more if all the sudden Austin fell out of favor as a place where companies and people want to move to, but even if that happened I don't think it would be an immediate deflation like we saw in 2008.

Yes, but at some point that 'rapid appreciation' starts to tail off. Will this new crop of people buying 700k houses see rapid appreciation? Time will tell.

[AMJ27]

Originally Posted by riaelise

Yes, but at some point that 'rapid appreciation' starts to tail off. Will this new crop of people buying 700k houses see rapid appreciation? Time will tell.

It's bound to slow down at some point, I think. We thought our neighbors were crazy when they were paying $500-600K a couple of years after we bought for $400K and thought there was no way the appreciation could continue. Now, 5-6 years later we had a neighbor just sell for over a million. It's got to stop at some point, but I also don't think there will be a big bubble burst like 2008 that the person I was responding to seemed to be holding out for.

[AMJ27]

Originally Posted by BobPhipps

Compared to what?

I already put a link in post #167 which states the average insurance cost being approximately $1,100 per year more in Texas. But as stated, most of this stuff is so relative. Our home insurance is $600 less than what we were paying. Our electricity bill will be less, but water will be more. Ultimately, rather than get into the individual scenarios (when it comes to advising anyone on expectations), I usually refer people to a COL calculator. It seems to make the most sense to me since the individual can look at the factors that apply to them, and the work has already been compiled by professionals that analyze this type of thing. And that includes comparing specifically to where they currently live and where they will be moving to.

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Of course it is relative. Just stating our observation from when we moved here. I didn't know that wasn't allowed . We moved from a high property tax state, but a state with lower HO insurance and utilities. The concerns of the poster that I was responding to were similar to ones we had and not everyone moving here might think about that. Your COL calculator is very helpful and objective.

[BobPhipps]

Originally Posted by AMJ27

Of course it is relative. Just stating our observation from when we moved here. I didn't know that wasn't allowed . We moved from a high property tax state, but a state with lower HO insurance and utilities. The concerns of the poster that I was responding to were similar to ones we had and not everyone moving here might think about that. Your COL calculator is very helpful and objective.

It's allowed. I was just asking a question because with no reference it's hard to know the relevance. Thanks for the clarification

[Dub D]

Originally Posted by BobPhipps

I had to do some serious head scratching on this one, pull the reins hard and just say WHOA!!

This comment needs some serious clarification because most people reading it are going to be saying WTF are you talking about?! It's a completely apples and oranges comparison.

1). Why would someone do a comparison between a $700k house or condo in San Diego and a spacious house in Round Rock or Cedar Park?

My wife and I paid $317k for a 4 bedroom/3 bath house in Round Rock and it's much more house than we need (we just want the grandkids to visit more often). I can't even imagine dropping $700k in any situation in those cities in Texas. And why would I be comparing it with a small house/condo in San Diego? Those are two different animals. And of course, there's a serious property tax difference between a $700k house/condo and what we paid.

2) When was the house bought in California? Those are two completely different property tax computations.

3). On average the Texas insurance is about $1,100 more

https://www.bankrate.com/insurance/h...surance/texas/

Again, I don't know what your situation is but I spit out my milk when I read the differences being a "moot" point. Those items you're referring to are exactly why people leave high COL areas of CA and move here.

I never said 700k for myself. I was referring to the post.

I can afford 430k in Texas and 530k in California. Obviously, 530k in California in the areas I want can only get you a condo.

A much easier example is my parents home in California. I bought it in 2013 for under 100k. It looks like I could sell it for nearly 300k now. Even I put all of the 200k profit into a house in say Georgetown or Kyle for them, the monthly amount is still quite a bit higher due to the property tax and home insurance.

It's much cheaper for me to move to Texas but not for my parents. It's a real catch 22.

[BobPhipps]

Originally Posted by Dub D

A 700k home in California and 700k in Texas is very different when it comes to monthly payment due to the higher property tax and home insurance in Texas.

I'm taking my third trip to Austin this weekend just to confirm everything regarding moving there in the next month or two. I can afford a really good house in Round Rock or Cedar Park or a condo in San Diego for the same monthly amount. However, the max price I can qualify for is 100k more in California. The TX property tax vs CA state tax is almost a moot point but the home insurance difference is gigantic.

Originally Posted by Dub D

I never said 700k for myself. I was referring to the post.

Well, I did quote what you said word-for-word and didn't selectively edit anything. Regardless of what you were referring to, the comparison doesn't make a lot of sense. If people were going to compare the differences in home affordability between the cities you mentioned (i.e. Cedar Park/Round Rock) in comparison to San Diego, they would be looking at similar properties (not a small home or condo vs a McMansion). The comparison would also be a COL one.

The most likely scenario would be someone from San Diego coming to Cedar Park or Round Rock and buying a place for $400k (as per the COL calculator comparing areas....a 42.7% reduction in the cost of a house). Then from there, the comparison would be made with the mortgage, property tax, insurance, and state tax combined (and that's hardly a moot point).

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(Go ahead a check the comparison using Cedar Park and Round Rock)


Someone coming from our area (San Francisco area) would buy a house that was roughly 25% of the value, which we did and then do the comparison. We would not be using similar costing as that's why people move to lower COL states. Clearly you get a significantly nicer home here and depending on what CA metropolitan area you live in, the home here might be 25% of the cost and much nicer (as was our case).

If you have some personal scenario that for some reason works out better for you, then congrats. I think what I listed above will be the more typical scenario for most in this situation.

[SummerGirl05]

I'm in a bidding war for a rental! It's best and final. On a RENTAL! This is insanity.

[Need4Camaro]

Originally Posted by SummerGirl05

I'm in a bidding war for a rental! It's best and final. On a RENTAL! This is insanity.

Just wondering how does that even work?

Is it bidding for the highest monthly rent contract?

[atxcio]

Originally Posted by SummerGirl05

I'm in a bidding war for a rental! It's best and final. On a RENTAL! This is insanity.

What part of town? I have a few rentals and thought the rental market had just recently cooled a bit...