Will Austin Home Prices Continue to Increase? (San Antonio, Anton: rental homes, mortgages)

[austin-steve]

Originally Posted by CptnRn

...
Our biggest worry should be providing enough water for everyone who lives here, if current droughts continue. We probably need to invest more into desalination plant research.

I think that's an understatement. It's a problem few are even aware of, but it's a game changer and we're already almost too late in addressing it. I don't know enough to comment about the viability of desalination, but I think green manicured lawns will disappear as water conservation becomes more of a priority and laws come into place requiring behavioral changes.

Originally Posted by scm53

That renter percentage hasn't changed in thirty years. The two declines I've seen in Austin RE in that period were both tied to job losses - not because investors moved on to the next big thing. Low demand for owner occupied at the same time vacancies rose and rents softened. But eventually, prices started right back up. Watch the jobs numbers - that will tell you what RE here will do.

Agreed. And investors can't just up and sell an income property. The lease ties their hands unless it's a MTM lease. Rental homes are much less liquid than owed occupied homes, where a seller can decide to sell at any time. Investors can only do so at the end of the lease unless they discount it enough to sell to another investor.

Steve

[TexasHorseLady]

Whenever I heard about desalination, I can't help but wonder what unexpected consequences THAT is going to have and who, in future, will be talking about how stupid WE all were to count on that to solve the problem of overpopulation and insisting on putting too many people in an area that can't support that many naturally.

[Trainwreck20]

Well, desalination, in of itself, is sort of a conservation mechanism because it is energy intensive, and there will be a higher cost associated with the water. Also, around here, you are talking about pumping it from the coast. El Paso, OTOH, is pumping it out from under the desert.

[balor123]

Desalination is a good thing, to counterbalance rise in seawater due to global warming :P In practice, though, I don't think we could possibly make a dent in sea water levels through the practice. It's very doable but a different way of life. Next time you're in Israel pour out a bottle of water on the street and see how people react. We have plenty of water for residents (showers, food, etc) for a long time. The real impact is going to be in farms, manufacturing, etc

[scm53]

Originally Posted by balor123

Desalination is a good thing, to counterbalance rise in seawater due to global warming :P In practice, though, I don't think we could possibly make a dent in sea water levels through the practice.

Most Texas desalination potential isn't from seawater - it is from the 2.7 billion acre feet of brackish water currently in our aquifers, throughout the state. San Antonio has a plan to produce water from a desalination plant co-located with a natural gas power generator. The thought is, that the power generator would normally produce desalination power, but stop, and shift into the power grid at peak times.

Replicating this throughout the state has the potential to address two of our most pressing infrastructure needs, simultaneously.

[llkltk]

But, if you were moving up now and making a good profit on your home, wouldn't it be better to buy now then waiting 2-3 years when prices will be higher. Sure it will flatten out at some point, but not in the short term. If the OP needs to move up, wouldn't now be the best time? Everyone seems so negative.

[Trainwreck20]

If the OP needs to move up

I am not saying the timing is bad, just that it only makes sense it you NEED to move up. There is no real financial benefit, as far as I can see, in moving up just for the sake of having a larger/more expensive home. The OP seemed to indicate that they were moving up not because of need, but because of opportunity.

[hts]

Moving up for financial opportunity is as good a reason as any. A 5% average annual price appreciation on a $600k house is a heckuva lot more than 5% on a $350k house.

Austin will continue to be a desirable destination. The economy is getting stronger. Rates are historically low and will remain so for quite some time. The population is growing. There is no reason to think that we're at serious risk in the near term (5-10 years).

[Trainwreck20]

2.5%, give or take, will be eaten up by taxes, so as a starting point, it is only 2.5% appreciation on the extra 250k. Another 0.5% or so is eaten up by insurance. Higher utility cost could also eat up some of that gain. So if the appreciation does not stay at or above 3%, then there may not be any financial advantage to moving into a bigger, more expensive house. Also, as mentioned before, appreciation is not necessarily constant across all houses in an area - the lower end (price-wise) houses tend to appreciate faster than the higher priced. So, if they 600k house was the low end for a neighborhood, that might work well, but not so much if you move up to the upper end houses in the same neighborhood.

[scm53]

I understand the pressure to leave the 1,800 sq. ft. house that was just fine for toddlers, but unbearably small once they became preteens. I also understand the unsuitability of "datedness". But I also recognize the incredible mental and emotional freedom of not having a mortgage. In the perfect clarity of vision through your bunghole, I wish I'd have stayed 'simpler", updating where necessary, but not jumping from house to house just to deal with the ten year period from the first one turning 12 and the last one leaving for college. In the grand scheme of things, it is a relatively short period, and manageable.

Not having a mortgage is such an unusual occurrence in the US, it seems strange to even mention it.