Crazy Austin housing market (Houston, Round Rock: for sale, rent, HOA fees)

[riaelise]

Originally Posted by ashbeeigh

I tried to find the article, but it’s not up yet. I heard on KVUE today that out of staters moving to Austin, on average have had a budget of about 830k to buy a home, which is about 32% higher then those in state. I’ll keep an eye out for the article.

I can say that the owners of the 800k homes recently purchased in my neighborhood are from out of state, specifically california and colorado. No sooner do the homes hit the market they are snatched up and are at least 100k over asking now. I'm wondering if the people from 2020 wish they held onto their homes one year longer lol.

[whereiend]

I do think that the absurd cost of construction right now is a factor. If not for that you might see more teardown and renovation projects that would help relieve some of the demand in the central neighborhoods. The supply of freshly renovated homes seems very low.

[10scoachrick]

Originally Posted by riaelise

I can say that the owners of the 800k homes recently purchased in my neighborhood are from out of state, specifically california and colorado. No sooner do the homes hit the market they are snatched up and are at least 100k over asking now. I'm wondering if the people from 2020 wish they held onto their homes one year longer lol.

Some friends sold their condo a year ago, so maybe missed out on $30K ??? BUT, they got into their new build at a fair price...I'm sure it's not so fair now!!!

[ScoPro]

Originally Posted by riaelise

I can say that the owners of the 800k homes recently purchased in my neighborhood are from out of state, specifically california and colorado. No sooner do the homes hit the market they are snatched up and are at least 100k over asking now. I'm wondering if the people from 2020 wish they held onto their homes one year longer lol.

I’m sure my brother could’ve gotten another $50k-$100k if he had waited to sell his old house near Mount Bonnell now instead of 10 months ago, but his new house in G-town would’ve negated the extra windfall if he was buying that one today.

[DashRiprock]

Originally Posted by ScoPro

I dunno, the current situation seems like uncharted waters to me.

This. Something weird is going on. I don't see how this is sustainable.

[Trainwreck20]

Originally Posted by whereiend

I do think that the absurd cost of construction right now is a factor. If not for that you might see more teardown and renovation projects that would help relieve some of the demand in the central neighborhoods. The supply of freshly renovated homes seems very low.

I saw an article saying that the cost of lumber alone would add $37,500 to the cost of an 'average' home compared to one year ago.

[dicipher]

Originally Posted by ashbeeigh

I tried to find the article, but it’s not up yet. I heard on KVUE today that out of staters moving to Austin, on average have had a budget of about 830k to buy a home, which is about 32% higher then those in state. I’ll keep an eye out for the article.

"An earlier Redfin report found that local buyers have an average budget of $644,771, but out-of-towners are coming with more money to spend, an average budget of $852,276 to buy a home."

https://www.kvue.com/article/money/e...d-8a6d384c6cf4

[dicipher]

Originally Posted by DCtoTejas

Yeah and none of the "expert" economists thought anything was wrong in 2007 either

Big differences:

Tighter lending standards (no liar loans)

More equity in homes

Business Expansion in the Austin area (fueling a population explosion and lots of money coming this way)

I also suspect there will be no false neighborhoods. In other words, people living in homes and not out-of-state investors. I don't think it's profitable in this market for an investor to buy up and try and make a profit renting out a home. Sell and hold (or flip) sure, but not rentals.

[whereiend]

Originally Posted by Trainwreck20

I saw an article saying that the cost of lumber alone would add $37,500 to the cost of an 'average' home compared to one year ago.

I believe that for sure. I got some quotes for construction recently and it was extremely high. If prices do fall some in the Austin market I think normalizing construction costs would be the primary driver. (That or complete economic collapse, but it's very difficult for me to imagine that after we just exited--at least locally--the worst global pandemic in a century).

[ashbeeigh]

Originally Posted by dicipher

Big differences:

Tighter lending standards (no liar loans)

More equity in homes

Business Expansion in the Austin area (fueling a population explosion and lots of money coming this way)

I also suspect there will be no false neighborhoods. In other words, people living in homes and not out-of-state investors. I don't think it's profitable in this market for an investor to buy up and try and make a profit renting out a home. Sell and hold (or flip) sure, but not rentals.

How is it not profitable to invest right now? There are bidding wars on rentals in hot areas of the city and investors are buying homes well over asking, in cash, site unseen.