Suggestion on moving to Austin? (Round Rock, Georgetown: sales, real estate, crime)

[zhazha]

Hello,

Californian family is planning to relocate to Austin, TX, but not sure which area will be good for us. We have narrowed down the area to Round Rock, SouthWest Austin and North Austin (Avery Ranch). We need good public schools, lowcrime area, and a home with appreciation. What we heard is that Avery Ranch is nice but the home appreciation is flat while Circle C and other Southwest Austin division have gone up. Not sure about home appreciation in Round Rock. Any suggestions is greatly appreciated.

[AustinGuy]

Hmmm, Texas isn't like California in terms of real estate, so betting on future appreciation can be a suckers game. I know many, many people who bought in the late 90s early 2000s in the areas you mention above who suffered through a pretty severe real estate downturn from 2001-2004 even though the media made it seem like just a small dip. Sure, tell that to the people who tried to sell their houses during those years who had listing up for a year plus with numerous reductions.

I would suggest first and foremost to find a community that you love and a house that is affordable. Don't count on it going up much in value, although it _probably_ will over the next decade, but no one can know for sure. Don't forget that rising property prices also come with a severe negative here in Austin -- rising property taxes. Values are upped every year that your appreciation goes up, and your taxes will rise correspondingly.

[gchapman]

AustinGuy:

Do taxes reduce if valuation reduces as well? I've seen mixed information on how valuation is determined for Texas. Are the rates based on the homes sale price or does the county/municipality determine the value and the asses it based on their calculations.

The one nice thing about California is that its really a straightforward 1% of the sale price with minimal increases.

[AustinGuy]

In Texas, your home value will be reassessed by your taxing district every year. So, if home values go down, your taxes should go down as well. If home values go up, your taxes will go up.

This is great in theory, but in practice, the taxing district will do their best to only raise your taxes not lower them. You'll have to fight for every scrap if home values do go down.

I saw this from 2000-2003 when I lived in the NW Austin hills. Home values were dropping, homes were sitting on the market, yet I got a 20% increase in my property values on my 2002 taxes. It was super ironic since I had my home on the market at 70k less than the county had it appraised at, and it wouldn't sell. The system for fighting your home's tax appraisal is no fun, so be prepared.

I agree that the CA property tax system is a homeowners best friend, but it is also one of the reasons that home prices have gone sky high there. The fact that your property isn't reassessed every year creates a huge incentive not to move in CA which keeps supply off the market.

Here in Texas, if an area of town gets hot, the property taxes for everyone in that area will keep going up year after year which will end up pricing some folks out of the houses that they already purchased forcing them to sell and move.

Honestly, I would prefer just to buy in an area where property values were relatively steady. I don't want my taxes skyrocketing year after year, and I also don't want my home to lose value so that it becomes a burden to sell it.

[AustinGuy]

Originally Posted by gchapman

Are the rates based on the homes sale price or does the county/municipality determine the value and the asses it based on their calculations.

Forgot to answer this portion above. The taxing county determines the value of your house. In Texas, home sales prices are not public data although there is currently a movement to get this changed.

I'm not sure exactly how they determine values, but it appears as if they guess at how much a particular zone has appreciated in the past year and just up everyones base values by that amount in that zone. They also fiddle around with the land vs structure value to get to their target appreciation.

[gchapman]

Thanks for the info AustinGuy.

The nice thing about California is that our yearly assessment isn't tied to the rate of value inflation, if that was the case we would have people leaving their homes because they could not afford the property taxes. I've seen this has become an issue for a lot of fixed income types across the US.

My shock at the high taxes should be tempered by the fact that I will be paying for the house outright. I'm basically trading an ocean view for a new home that is paid for.

Out of curiosity, what kind of neighborhood can I expect for homes in the 500-600k in the Austin area?

[AustinGuy]

Originally Posted by gchapman

Out of curiosity, what kind of neighborhood can I expect for homes in the 500-600k in the Austin area?

You have a very large selection in that price range. Are you looking for a new, largish house in a newer suburb or an older house in a close-in part of town?

If you go out to Steiner Ranch, you can get a very nice 4000 sq ft in a nice part of Steiner. If you go to Cedar Park or Georgetown, you can have a mega-mansion. If you go to Tarrytown or Hyde Park (which are prime, older, close in neighborhoods), you will get an older, smaller home possibly in need of some rehab for that price.

[AustinGuy]

Sorry, I missed the "new home" part. For almost all the new home communities in the outskirts of Austin, 500k-600k will buy you a 4000sq ft-5000 sqft top of the line place.

[gchapman]

I guess, being on the "outskirts" brings me to the next question, traffic.

I commute 60 miles a day, which in California isn't that bad since its nearly all 80 MPH highway driving.

Those areas you mentioned look to be roughly 15-25 miles out of the city center (as of yet I still have no idea about possible work locations so I'm using it as a target area). That kind of commute on backroads or two-lane roads can be long. Is it safe to assume that 30-45 minutes each way is your standard commute?

Population density isn't nearly as high in Austin as it is here in Orange County, but it also appears that the 10 lane highway hasn't made its way into your neck of the woods either.

[AustinGuy]

Depending on what type of work you do, it is very possible that you won't be working downtown. Most of the tech companies are not downtown. There are many along 360, North 183 and North Mopac, so if you lived in Steiner, your commute would be decent to all those areas. The biggest problem with Steiner Ranch is getting into and out of it.

30 minutes is a pretty common commute time in Austin. We have annoying traffic, but it isn't anything like OC or LA. The thing that is most annoying about the traffic in Austin, is that most of it seems unnecessary and due to a poor highway system.

I guess I would suggest figuring out your job situation first and deciding on the house second. There will be a nice new housing community within a 20-30 minute commute of wherever you choose to work.