Austin is going to grow forever! (to rent, vacation home, neighborhoods)

[RoadWarrior12]

Originally Posted by hts

Yes, the current stock market is likely to offer a better ROI than a single family home over the next 5-15 years.

If you agree with this premise, why don't you rent your place and put all your capital to work in the equity markets then?

Because I would spend more renting in this current market.

[riaelise]

Originally Posted by hts

I don't think I (or anyone else in this thread) suggested that home ownership was the best place to make money. In fact, it's probably right up there with CD's as one of the worst in today's environment. But there are many other reasons to own a house, not the least of which is that it should provide a stable and predictable rate of return, perhaps 3-5% Y/Y.

I've owned houses (several in N. VA, one in Chapel Hill) where I've made tons, and I've also owned a house (here in Phx) where I've lost even more. It's a crap shoot.

The rate of return on a home is anything but "stable and predictable". Like you've already personally said, you can be underwater for several years, above water, and back underwater. the people who are really doing well here real estate wise in my opinion are largely early adopters..

[hts]

That's all well and good (and I don't disagree), but hindsight is 20-20 and we're currently in the here and now.

So do you buy/own your primary residence at today's prices or do you rent instead (either investing that capital elsewhere or perhaps waiting for a correction before deciding to buy)?

Most folks with the means (and the wherewithall to stick around for 5+ years) will choose to purchase their primary residence whether they see it as the *best* investment for their capital or not.

[RoadWarrior12]

Granted, we're WAY off topic here, but I agree to the extent of the primary residence. If you're going to be in one place for 5+ years, with today's rates, it doesn't make much sense NOT to buy.

It's the concept of an "investment property" that generally underperforms.

[centralaustinite]

Yes, well it is the second home owners that are going to kill central Austin as a place where people actually live.

[gpurcell]

Property taxes here are high enough, hopefully it will tamp down the second-home market at least a little.

[hillcountryheart]

Originally Posted by gpurcell

Property taxes here are high enough, hopefully it will tamp down the second-home market at least a little.

If you have enough money to buy a second home in central Austin, I doubt very much that the property taxes are out of reach.

[orngkat]

Maybe the city could provide incentives to those of us who live in the central area to build rental cottages in our sometimes very large backyards to help with the influx of new residents - that would increase density, provide income to pay our exorbitant taxes and allow us to stay in our homes.

[centralaustinite]

Originally Posted by orngkat

Maybe the city could provide incentives to those of us who live in the central area to build rental cottages in our sometimes very large backyards to help with the influx of new residents - that would increase density, provide income to pay our exorbitant taxes and allow us to stay in our homes.

This is allowed in nearly every place that has SF-3 zoning BUT note, building a rental unit (garage apartment, granny flat) will increase your property taxes and could possibly increase the taxes of your neighbors with a similar lot and zoning because you can be taxed on the "highest and best" use of a property (in other words the greatest possibility) even if that use is not utilized. The threat of higher taxes is why there wasn't a building boom of secondary structures in central areas 10 years ago when Council loosened the rules, some areas even fought again it worried about higher taxes on those who didn't build.

[Novacek]

Originally Posted by orngkat

Maybe the city could provide incentives to those of us who live in the central area to build rental cottages in our sometimes very large backyards to help with the influx of new residents - that would increase density, provide income to pay our exorbitant taxes and allow us to stay in our homes.

The city actually did the exact opposite, making it very difficult if not impossible for any new density like this to be added in the central city (McMansion). And they just did it again, with the "Stealth Dorm" ordinance.