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Just curious, are you a Six-million dollar man, yet? RE's been good to you, I'm sure.
I think those of us who choose to build wealth through real estate investing have been rewarded over time by the Austin market.
But plenty have also been bloodied and lost money through incompetence and bad decisions. Example #1 Zillow and Opendoor. And plenty of mom and pop seminar investors using the wrong decision metrics nd also failing to realize that real estate is, and always has been, risky.
I do think "buy and hold" proves out over time for those who have the emotional capacity and financial ability to weather the downside risks and uncertainties.
I think those of us who choose to build wealth through real estate investing have been rewarded over time by the Austin market.
Austin for sure has been extremely stable for the most part. The brief blip in 2008 really was more of a pause than anything. I did come along well after the S&L crashes though... even then, it's probably outpaced inflation. I do think some of those "glory years" are definitely gone. I doubt it's possible to find the same margins anymore right now.
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But plenty have also been bloodied and lost money through incompetence and bad decisions. Example #1 Zillow and Opendoor. And plenty of mom and pop seminar investors using the wrong decision metrics nd also failing to realize that real estate is, and always has been, risky.
Caveat Emptor is the basic principle to real estate anyway, right?
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I do think "buy and hold" proves out over time for those who have the emotional capacity and financial ability to weather the downside risks and uncertainties.
I think it has definitely, I'm fairly bearish on the upcoming next few years. We've got some real inflation issues which means interest rates are going to have to rise. This is going to put some real pressure on appreciation in the near and mid-term.
So what happens to those of us who are neither musicians nor creatives? Infact we are not even native Austinites. Would we have to make human sacrifices to the God of all things Austin to be let in? Who decides who is qualified to be here? Do you have to look a certain way, behave a certain way or see life a certain way? Who gets to decide all of this? Slippery slope you are prescribing.. very thin line between exclusive and exclusionary.
I for one I'm glad that more outsiders are coming to Austin!
Those who move someplace because they love it have always been welcome. Those who move someplace and then, instead of valuing it for what it is and seeking out and enjoying those things it has to offer, promptly try to change it into where they came from or where they should have moved are not. It really is that simple, and it applies to everywhere, not just Austin. Those who seek to make every place just like every other place so that there are no differences and complain if a place they move to/visit isn't just like where they came from which is SO much better? We used to call them Ugly Americans. Good name.
I think that anyone who missed their chance to purchase in Austin should take a serious look at San Antonio. You can buy a house in SA for the same monthly payment as an apartment in Austin. The price of land is locked into Austin RE, while macroeconomic factors such as materials and labor will maintain that pricepoint here and elsewhere. Want to find an affordable house? Find the cities with cheap dirt, like SA, Tulsa, Waco, Kansas City, etc...
Austin for sure has been extremely stable for the most part. The brief blip in 2008 really was more of a pause than anything. I did come along well after the S&L crashes though... even then, it's probably outpaced inflation. I do think some of those "glory years" are definitely gone. I doubt it's possible to find the same margins anymore right now.
Caveat Emptor is the basic principle to real estate anyway, right?
I think it has definitely, I'm fairly bearish on the upcoming next few years. We've got some real inflation issues which means interest rates are going to have to rise. This is going to put some real pressure on appreciation in the near and mid-term.
We bought our first house (which we still own - saw no reason to sell it when we bought the ranch because horses) in 1988. This after careful financial planning from the very beginning - even when we were poor, we saved 20% off the top of every pay check. The crash of the 80's was significant. The drop in 2008 was kept from being as bad as it was in other parts of the country because of our property taxes that kept property values from rising ridiculously and thus they didn't have as far to fall (I was in real estate as an agent at the time and we went over all of the reasons why and why not a LOT then). One of the virtues of our way of dealing with taxes that people tend to forget, and with what's happened in the past year or so, we may have lost that advantage.
An interesting aspect of 'investment properties' is the fact that the assessed value can escalate very quickly without the homestead exemption. In conjunction with a relatively high property tax rate, this shifts some of the tax burden from actual homeowners (who have a 10% increase cap via the HSE and other deductions) to investment home owners (who do not have the cap). In addition, ever time a 65+ homeowner sells their home to an investor, the effect is magnified - the school taxes jump back to 'market' value and the larger than typical exemptions go away.
As alluded to by THL, this results in a negative pressure on investment properties. A smart investor keeps the tax burden in mind when investing, which puts some downward pressure on prices and, if there is a 'lull' or reversal in demand, investors are morel likely to dump properties.
On a totally different tangent - when I lived here in the 'cheap' 80s, it was in a now-desirable part of town, but back then it was a roach-infested POC that I could never go back to living in and is a 'quality' of housing almost impossible to find in Austin now. In the late 80s/early 90s, rising prices forced me out to Lamar/183 with roommates. Crime was a common occurrence there - my roommate's car got hot-wired in the parking lot, and police knocking on a door while people bailed out a back window happened more than once. There was at least one attempted homicide while we lived there. Austin was 'cool' back then, don't get me wrong, but it wasn't some sort of nirvana for musicians. Even then, they made no money and lived in crappy housing. Cheap, but crappy. The rise of the internet and mobile phones probably has had as much of an affect on Austin as changing costs.
An interesting aspect of 'investment properties' is the fact that the assessed value can escalate very quickly without the homestead exemption. In conjunction with a relatively high property tax rate, this shifts some of the tax burden from actual homeowners (who have a 10% increase cap via the HSE and other deductions) to investment home owners (who do not have the cap). In addition, ever time a 65+ homeowner sells their home to an investor, the effect is magnified - the school taxes jump back to 'market' value and the larger than typical exemptions go away.
As alluded to by THL, this results in a negative pressure on investment properties. A smart investor keeps the tax burden in mind when investing, which puts some downward pressure on prices and, if there is a 'lull' or reversal in demand, investors are morel likely to dump properties.
On a totally different tangent - when I lived here in the 'cheap' 80s, it was in a now-desirable part of town, but back then it was a roach-infested POC that I could never go back to living in and is a 'quality' of housing almost impossible to find in Austin now. In the late 80s/early 90s, rising prices forced me out to Lamar/183 with roommates. Crime was a common occurrence there - my roommate's car got hot-wired in the parking lot, and police knocking on a door while people bailed out a back window happened more than once. There was at least one attempted homicide while we lived there. Austin was 'cool' back then, don't get me wrong, but it wasn't some sort of nirvana for musicians. Even then, they made no money and lived in crappy housing. Cheap, but crappy. The rise of the internet and mobile phones probably has had as much of an affect on Austin as changing costs.
That's an interesting thought. Back then, musicians and such made their own neighborhoods and support networks in cheap (no longer existing) areas of necessity (somebody found a cheap area and the word spread as housing became available in that neighborhood and it was a big neighborhood family, more or less). The internet and mobile phones makes this NOT as necessary, but I wonder what is lost in the process in the way of creativity feeding organically just through living and jamming together on the porch.
Those who move someplace because they love it have always been welcome. Those who move someplace and then, instead of valuing it for what it is and seeking out and enjoying those things it has to offer, promptly try to change it into where they came from or where they should have moved are not. It really is that simple, and it applies to everywhere, not just Austin. Those who seek to make every place just like every other place so that there are no differences and complain if a place they move to/visit isn't just like where they came from which is SO much better? We used to call them Ugly Americans. Good name.
I guess it's just a difference of perspectives. Everything changes.. Nothing can ever remain static and wanting that in my view is an exercise in futility. What you are prescribing IMHO is a form of homogeneity that I can't understand. People move for different reasons and I can't begrudge them for liking what they like. They might not find it but they have a right to seek it. Ethnic enclaves like Chinatowns, Jewish area etc were built because those folks were looking for folks from similar backgrounds. It doesn't always mean that they forsook the bigger community in the city. Most times, that's not really an option. Melting pots are that way for a reason and most people like it because it allows them to find their "tribe".
My parents were born in Africa and moved to Europe to continue their education, my siblings and I were born and grew up in Europe but were able to culturally straddle both cultures. DH and I came to the US for school from Europe and our children are Americans. They were born here. But believe it that they all got passports by 3 months and have travelled frequently to these other countries that are part of their heritage. So culturally we are now straddling 3 cultures.. And I believe my children are the better for it. I was very happy when more African food markets opened in town because I shop there. But we also shop HEB and love the international aisle.
We can't all be the same. Assimilation doesn't mean losing every sense of yourself to make the majority feel more comfortable.
I guess it's just a difference of perspectives. Everything changes.. Nothing can ever remain static and wanting that in my view is an exercise in futility. What you are prescribing IMHO is a form of homogeneity that I can't understand. People move for different reasons and I can't begrudge them for liking what they like. They might not find it but they have a right to seek it. Ethnic enclaves like Chinatowns, Jewish area etc were built because those folks were looking for folks from similar backgrounds. It doesn't always mean that they forsook the bigger community in the city. Most times, that's not really an option. Melting pots are that way for a reason and most people like it because it allows them to find their "tribe".
My parents were born in Africa and moved to Europe to continue their education, my siblings and I were born and grew up in Europe but were able to culturally straddle both cultures. DH and I came to the US for school from Europe and our children are Americans. They were born here. But believe it that they all got passports by 3 months and have travelled frequently to these other countries that are part of their heritage. So culturally we are now straddling 3 cultures.. And I believe my children are the better for it. I was very happy when more African food markets opened in town because I shop there. But we also shop HEB and love the international aisle.
We can't all be the same. Assimilation doesn't mean losing every sense of yourself to make the majority feel more comfortable.
Again, moving someplace to be more yourself is one thing. Moving someplace to make IT more you no matter what those who were already there want is something else entirely.
And I believe I already said in this thread (maybe it was another one) what the "change is inevitable" statement always brings to mind, the comparison that a candidate for Governor of Texas, Clayton Williams, made regarding the weather, a comparison that lost him the governorship. He said, comparing the weather to rape, if it's inevitable, just relax and enjoy it. The same could be said for those who say that change is inevitable. No, not all change is good, not all change is desirable, and unrestricted, "relax and enjoy it without thinking" change is destructive.
Then there's the difference between immigration and colonization, something that the kind of person who moves somewhere and seeks to make it into a clone of where they came from seems to be unable to understand (or they are deliberately colonizing, I guess, and pretending not to be).
We bought our first house (which we still own - saw no reason to sell it when we bought the ranch because horses) in 1988. This after careful financial planning from the very beginning - even when we were poor, we saved 20% off the top of every pay check. The crash of the 80's was significant. The drop in 2008 was kept from being as bad as it was in other parts of the country because of our property taxes that kept property values from rising ridiculously and thus they didn't have as far to fall (I was in real estate as an agent at the time and we went over all of the reasons why and why not a LOT then). One of the virtues of our way of dealing with taxes that people tend to forget, and with what's happened in the past year or so, we may have lost that advantage.
That advantage is certainly not lost, and what I consider to be a major limiting factor to future appreciation. It grows at a rate faster than pricing and income. Ultimately, the reason I'm bearish on the RE market as a whole for a growth perspective in Austin.
I bought my condo there at an auction in 2008, there's not a chance in hell I could buy it now. I held onto it as a rental when I had to move to DFW for other reasons because I knew I'd be heading back to Austin the minute life allows. The shock of moving from a homestead to a rental after that first bump I was lucky enough to not have to pass on to my tenant, the next one I probably will to some extent.
I do disagree with your unfounded assertation that people are moving to Austin to make it someplace else though. There's no evidence of that, only evidence of new ideas, businesses and people coming in. Yes, it's far more crowded and expensive - but no less creative.
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