Priced out: 'I can't afford a home in my town' (Austin: to rent, houses)

[austin-steve]

Originally Posted by brattpowered

Sounds like a bubble to me. Of course, you'll never hear anyone with skin in the game (realtors, investors, many homeowners) admit it. 20 billion dollars is appropriate to spend on a chat app and houses will keep appreciating 30% a year until the end of time...

It's not a bubble, because the buyers have actual reason to buy, and all buyers are loan qualified and/or using cash. It's not speculation. It's serious price inflation resulting from limited supply. Suply is limited because of bad growth policy in Austin mainly and an inability to keep up with job/population growth elsewhere.

Steve

[brattpowered]

Originally Posted by austin-steve

It's not a bubble, because the buyers have actual reason to buy, and all buyers are loan qualified and/or using cash. It's not speculation. It's serious price inflation resulting from limited supply. Suply is limited because of bad growth policy in Austin mainly and an inability to keep up with job/population growth elsewhere.

Steve

I'm sure it's mostly driven by supply and demand, but there does seem to be a lot of speculation going on. According to the graphic on the link below, the proportion of housing purchased by institutional investors (entities buying 10+ houses in a year) is up 160% in Austin just over the past year. Austin is way ahead of the pack in that regard. Next place is Cincinnati at 83%, and in most places it's declined. Is that not seen as speculation, or something that might artificially raise housing prices?

The "Institutional Investor" Housing Bubble Just Burst | Zero Hedge

http://www.zerohedge.com/sites/defau...tyTrac%202.jpg

[JH6]

Nonsense, they could buy 4 of my house in Round Rock for 600 grand.

[Trainwreck20]

Okay, that is a bit silly - "I can't buy in the exact house I want in a very specific area, so I am leaving the state!".

I mean:

We considered going further West but most of the school activities, restaurants and cultural things are downtown. We have been priced out of the market -- literally. Now we are planning a move, probably to North Carolina or Tennessee.

Umm...so, their jobs are easier to change than their housing location? The school activities are downtown? Really?

[scm53]

Originally Posted by brattpowered

IAccording to the graphic on the link below, the proportion of housing purchased by institutional investors (entities buying 10+ houses in a year) is up 160% in Austin just over the past year.

That data is from Realty Trac. YMMV, but I wouldn't believe a word they had to say. For instance, they are saying that Travis County median list/sale price gap was 150K this past January. As far as ""10 + investors" - they may be buying MF, but there is no way there is any significant SF investor activity in Travis County. I don't know of anyone that sold to an institutional investor, no one that bought from one, or anyone that rents from one.

So, I think the data underlying that graph is flawed, and would question any conclusion from it as well.

[verybadgnome]

Originally Posted by austin-steve

It's not a bubble, because the buyers have actual reason to buy, and all buyers are loan qualified and/or using cash. It's not speculation. It's serious price inflation resulting from limited supply. Suply is limited because of bad growth policy in Austin mainly and an inability to keep up with job/population growth elsewhere.

Steve

I think it has more to do with the fallout of the housing bubble than anything related to what COA has done. The number of new units added annually in Austin went way down from 2008 to 2011, but it did the same for most of the suburban cities too.

[austin-steve]

Originally Posted by verybadgnome

I think it has more to do with the fallout of the housing bubble than anything related to what COA has done. The number of new units added annually in Austin went way down from 2008 to 2011, but it did the same for most of the suburban cities too.

Agreed, that's part of it. Most of our local builders are national, and over-corrected in Austin. Not enough lots are ready to build. But COA is the worst of all local municipalities with regard to being builder-unfriendly and having anti-development policies. Of course everyone is getting priced out as a result.

[brattpowered]

Originally Posted by Trainwreck20

Okay, that is a bit silly - "I can't buy in the exact house I want in a very specific area, so I am leaving the state!".

I mean:

Umm...so, their jobs are easier to change than their housing location? The school activities are downtown? Really?

If the lifestyle they want is not available at their price point, I don't begrudge them from moving somewhere it's accessible for them. Maybe they're repulsed by a lot of the affordable suburbs in Austin. You won't see me moving to one-- I'd just move to a different city too.

[riaelise]

I don't feel anything for the Austin case study. They would like to have a somewhat largish home in probably one of the most exclusive parts of town. Are they serious? It's like me wanting to buy a 2/2 1500 apt in Manhattan with a budget of $400,000. It's not gonna happen! I've been here long enough to know that there are certain areas in this city that aren't cheap and were NEVER cheap. It's all about what is important to you. If it's the Eanes schools (which people think is the only superior school district), then you're gonna have to give up the size. If it's the size, then you're gonna have to give up living in Eanes. It's that simple! You don't have to move to a suburban city either..there are plenty of areas in town that fit the bill for a $400K budget.

The people I feel bad for are natives being priced out of areas, not transplants who move here thinking that all of their housing wishes are going to come true without a pricey tag. It's just not like that anymore.

At the same time, I do agree that Austin is becoming increasingly unaffordable and that sucks for the middle classed. The Austin salaries aren't all that great when compared to other larger cities (unless you're a tech person, I suppose), yet the housing prices are way out of control. And for what reason, really? These are the same neighborhoods that I've either lived in or passed through over the years and very little changed except for the price. The median household income will not get you a SFH in a decent area in Austin at this point in time. I make a pretty decent salary on my own, but using the 2.5 income rule (that I personally think is sound when it comes to buying houses), there's little out there for me. Small starter homes that aren't in the ghetto and/or have crappy schools, amenities, services are now creeping closer to $250,000. It pains me to think that I actually would need my husband's salary to have that much more buying power! It's the middle classed worker bee that I feel bad for when it comes to affordability, if living in Austin is their thing.

[A-Tex]

Originally Posted by riaelise

I don't feel anything for the Austin case study. They would like to have a somewhat largish home in probably one of the most exclusive parts of town. Are they serious? It's like me wanting to buy a 2/2 1500 apt in Manhattan with a budget of $400,000. It's not gonna happen! I've been here long enough to know that there are certain areas in this city that aren't cheap and were NEVER cheap. It's all about what is important to you. If it's the Eanes schools (which people think is the only superior school district), then you're gonna have to give up the size. If it's the size, then you're gonna have to give up living in Eanes. It's that simple! You don't have to move to a suburban city either..there are plenty of areas in town that fit the bill for a $400K budget.

The people I feel bad for are natives being priced out of areas, not transplants who move here thinking that all of their housing wishes are going to come true without a pricey tag. It's just not like that anymore.

At the same time, I do agree that Austin is becoming increasingly unaffordable and that sucks for the middle classed. The Austin salaries aren't all that great when compared to other larger cities (unless you're a tech person, I suppose), yet the housing prices are way out of control. And for what reason, really? These are the same neighborhoods that I've either lived in or passed through over the years and very little changed except for the price. The median household income will not get you a SFH in a decent area in Austin at this point in time. I make a pretty decent salary on my own, but using the 2.5 income rule (that I personally think is sound when it comes to buying houses), there's little out there for me. Small starter homes that aren't in the ghetto and/or have crappy schools, amenities, services are now creeping closer to $250,000. It pains me to think that I actually would need my husband's salary to have that much more buying power! It's the middle classed worker bee that I feel bad for when it comes to affordability, if living in Austin is their thing.

Seriously, anyone who is familiar with Austin knows the individuals profiled in this article do not make a case for the premise of the article. Basically they're saying that since they can't afford to buy in the most expensive suburb in Austin, they're going to have to move to an entirely different place. That budget will take them far in many solid areas of town, not just the suburbs they dislike. Sheesh. Talk about first world problems.