need advise about house purchase in s/sw (Austin, West: real estate, rentals)

[b. frank]

I have lived in Austin just over a year and am ready to buy a house.
I know I want to live in south austin (more like south south south austin on my budget). I have found some houses in good shape and in my price range in the Cherry Creek area but I'm having a hard time judging the area overall. I would like to be assured of SOME appreciation over the coming years - I know it won't be SoCo anytime soon, but is this area in danger of becoming a wasteland of dilapidated rentals? I have a trustworthy realtor who concedes that "people like Cherry Creek" although he obviously considers it a dump. His opinion seems to be that new developments (where I would never choose to live) are the only way to go. Austinites please help.

[b. frank]

Please forgive my misspelling - but I am still in need of adviCe. Trainwreck, I know you are out there and that you can help me. Appreciation in value is not my ultimate concern - I mostly want a decent place to live (and own) that is reasonably close to downtown. My wife and I live in way north austin and we can't wait to get out. We have found at least one home in Cherry Creek that seems very "liveable" I just want advise from people outside the real estate community. Would you live there? Why or why not. Thanks.

[cjaustin]

Frank, I am a Realtor in Austin and I would live there if my wife didn't work so far North. The new areas are never going to have the same Vibe as CC will. I also think the SOCO mindset will soon take over areas that are more affordable like CC.
Good luck,
CJ

[Trainwreck20]

I guess the question is, how long do you plan to be there? I am not familiar personally with that neighborhood, but that general area tends to be older, more run-down homes with a few nicer onces interspersed. I am not a realtor, but have spent my fair share of time either buying or selling a home. Things to consider:

• How long do you intend to be there?
  If you plan to be there a long time (say, 10 years), I would not worry much at all. That area will become more valuable as other areas build out and the traffic, in general, gets worse. There are several houses off of Brodie and Wm Cannon that I would consider buying as an investment if my wife would let me. I completely believe that the long term prospects of south-central Austin are good. I do not know how long it will take for this area to appreciate - it could be 3 years, it could be 10, so how long you stay may be the deciding factor.
• Are you buying the most expensive house in the neighborhood?
  Especially if you are not intending to stay a long time, I would look at a little more of a fixer-upper. That newely remodeled gem in the middle of a so-so neighborhood will suffer some short-term depreciation as the 'modernizing' becomes a little less modern.
• Have you checked the tax appraisal history?
  Check a few of the houses on TravisCAD to see what their recent appraisals are. In paticular, check the land value vs. the property value. Increasing land value is a good indicator of an area becoming more sought after.

I am intending to go check out a few neighborhoods this weekend (weather permitting and camera working) to check out some changes I have noticed in a couple of south Austin neighborhoods (more in the Oltorf/S. 5th street area, but I will try to swing over to Manchaca).

EDIT:
Okay, I just check out appraised values (AVs) for two random streets in the area, Southern Oaks (a few blocks N. of Stassney) and Whitestone (a few blocks S. of Stassney). Both are just west of Manchaca and intersect it.

In general, the AV spiked in 2002 and was flat from 2003-2005; however, the two streets are quite different when you look at the percentages:
Southern Oaks
1 yr change: 17%
5 yr change: 5%

Whitestone
1 yr change: -4%
5 yr change: 0%

The 5 yr compares the 2002 spike to 2006. I did not do a six year, but it would have been a much higher AV ratio, in any case. The 2, 3, or 4 year would have resulted in the same AV ratio, since AVs were flat.

To me, this indicates that there is some major diffence in these two areas, but I don't know the neighborhood enough to tell you why. I also found out that Travis CAD no longer appears to have historical land values broken out (although it does show the current land value).

[b. frank]

First of all, trainwreck, thanks for the detailed response. I also looked up the property on Travis CAD and found basically the same as your random search results. Major spike in 2002. +7% 5 yr AV and -1% 1 yr. So, not looking so good currently, but good over the long term. More bad news is that it IS highest valued on street. Several are only a few thousand less but some are valued less than half! Now I'm more confused than ever - thanks very much for pointing me to these resources, though.

[Trainwreck20]

I wouldn't abandon all hope . I bet you are not the only person looking to buy a little close in and willing to buy now and wait for an up-turn in values. Also, if you are looking at longer-term, things look much better than this little snapshot of 6 years. Personally, I would not mind buying into a less expensive neighborhood if I did not have kids and have to worry so much about the local schools. A less expensive house for several years can mean significant savings on your property taxes, closer in means big savings on your gas (and lower mileage on your car), and I LIKE older neighborhoods.

As for the realtor, make sure you have a realtor that is willing to work for what you want...if close in is important to you, but new homes important for him/her, get a new realtor. Generally, you are not stuck with a realtor unless they have shown you a specific house or houses, and then only for those properties. Some will try to give you a guilt trip, but if they are not meeting your needs, politely say 'thanks!' and go get another. Realtors are not allowed to solicit on this forum, but you can tell who they are and PM them if you like. I have not seen any that 'specialize' in this area of Austin, but I am sure they are out there somewhere. Check yellow pages, agencies, etc, and find one that you can connect with.

[austin-steve]

Now I'm more confused than ever

Some good rules of thumb...

• Buy close to the median or average of the neighborhood in both size and price.

• Make sure your Realtor provides you with a Market analysis on all properties prior to making an offer. You may have to pay a price slightly higher the the CMA suggests, due to the rapidly rising prices. Look at LOTS of homes if you haven't already. You'll become quite knowledgeable very quickly.

• The areas of Cherry Creek north of Williams Cannon are mostly 1970's and older. South of Williams Cannon, off both sides of Westgage, are mostly 1980's. Both areas are really good, but a lot of the early/mid-1970's homes still have aluminum wiring and your insurance costs will be higher.

• Watch out for homes that have flooded, even though they are not in a flood zone. I cancelled a contract on one last year on Aldford after I found out the the owner did all the flood remediation himself instead of having it professionally done. The home had flooded 3ft high inside the property, and it's NOT in a flood zone (though it may be in the new one). Judging from the poor quality of some of his other home projects, I wasn't willing to risk it.

• Check the new flood zone maps at the City of Austin website. I think it's ok to own in a floodplain as long as you understand the risks and are willing to be flooded if that should in fact happen.

Cherry Creek is great. Don't worry about appreciation. Areas 10N and 10S are very hot and you'll be very smart to buy there.

Steve

[Austin97]

Originally Posted by b. frank

I have lived in Austin just over a year and am ready to buy a house.
I know I want to live in south austin (more like south south south austin on my budget). I have found some houses in good shape and in my price range in the Cherry Creek area but I'm having a hard time judging the area overall. I would like to be assured of SOME appreciation over the coming years - I know it won't be SoCo anytime soon, but is this area in danger of becoming a wasteland of dilapidated rentals? I have a trustworthy realtor who concedes that "people like Cherry Creek" although he obviously considers it a dump. His opinion seems to be that new developments (where I would never choose to live) are the only way to go. Austinites please help.

One strategy that I think would work is to have a map of austin and use a compass to draw a circle. North austin is over developed but if you can stay within the same distance of downtown as the 183/mopac in any direction you are really pretty close in.