buy vs rent (Austin, Cedar Park: for sale, real estate, rentals)

[millr]

Looking at Austin's craigslist and real estate listings, it seems that there is a huge discrepancy between the rents and real estate prices. The rents are almost as high as in SoCal, close to the ocean, while the real estate prices look like they have a "90% off" sign. Is there a reason for this?

[OpenD]

Originally Posted by millr

Looking at Austin's craigslist and real estate listings, it seems that there is a huge discrepancy between the rents and real estate prices. The rents are almost as high as in SoCal, close to the ocean, while the real estate prices look like they have a "90% off" sign. Is there a reason for this?

It's market dynamics at work. The vacancy rate for rentals is currently very low, around 4%, so it's a sellers market, with upward pressure on prices. Meanwhile there's still a good supply of houses for sale, so it's more of a buyers market, with downward pressure on prices.

As to why that is so, it's a little complicated...

[millr]

Originally Posted by OpenD

As to why that is so, it's a little complicated...

I can handle it. I have a whole bunch of advanced degrees

[LI2Texas]

Just speculation on my part, but I'm wondering if part of the reason is the huge number of people moving here over the past few years. When you first move, you are likely to rent for a few years until you are sure you like your new city, know where you will be working, etc. The sales market is more for established people selling to established people. Also, since there is so much new home building in Austin, many homes for sale are competing with new construction in the same neighborhood.

[Trainwreck20]

The theory I have heard is that the lending process has gotten so much tighter, that it is harder to qualify to buy a house; therefore, more people are renting.

[hoffdano]

Austin's population continues to grow at very high rates. 3.8% is a number I saw for the last year alone. I think most newcomers are renters. Right now, more than in recent history, I think newcomers are coming here to find work. They are not necessarily coming here with a job in hand. So they can't commit to buying.

[clarksvillemom]

I've heard that while lending is tougher - more time, more paperwork, etc. it's not like it's so burdensome as to discourage buyers who really can afford what they are buying. I hope that's the case at least!

[paul6835]

There's a vast discrepancy in markets between the area bounded by South and East of 183 & 360, west of 35, and North of 71 and the rest of the Austin area. You can rent a 4000 sqft house in Cedar Park for less than an 800 sqft house in Bouldin. A much larger % of properties in that bounded area are rentals than outside it, so that skews the statistics.

And yes, downdown Austin is starting to approach coastal prime location prices to buy or rent.

[looking2tex]

We are in the process of moving there right now and found a really nice 3/2.5 off of 1431/Mayfield Ranch. We have no established credit in the US and are moving there without jobs. We have done a prepaid lease and paid for 12 months up front, so we will be OK.

I would CYA and use an agent because there are a lot of scammers on CL. They go around and see what legitimate agents have posted in some neighbourhoods and then put an ad on CL with that info but with the scammers phone number....usually at a ridiculously cheap price and then they say they are out of town. but try and collect a deposit from some naive people looking for a place.

FWIW...from our recent research a decent 2600-3000 sq/ft place is going to run about $1600 - $2200 or more depending on the area and amenities.
We looked at some real crappy places that were poorly maintained in the lower end price point and they were awful. We even toured one that had something dead in the garage (we did not see what is was because there was no power turned on at the place) and it smelled absolutely terrible. The smell was way too bad to be something small like a mouse....maybe something more like a house cat that was left behind. The whole place smelled like cat pee and their was mold on the glass in between the window panes....Beautiful 4/3 home on a great street in The Preserve at Stone Oak that was destroyed by a bad tenant, and an equally bad landlord/property manager.

[FueledByBlueBell]

Originally Posted by OpenD

It's market dynamics at work. The vacancy rate for rentals is currently very low, around 4%, so it's a sellers market, with upward pressure on prices. Meanwhile there's still a good supply of houses for sale, so it's more of a buyers market, with downward pressure on prices.

As to why that is so, it's a little complicated...

I'm sorry, where is this "good supply of houses for sale" you are talking about???