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If you were interested in buying a house or a townhouse that you would live in for around 5 years.. assume no kids or kids that haven't started school and plan to move in about 5 years to get into a better school district/ bigger home.. which areas would you look for a 425k budget 2-3 bed/ 2+bath.. with the intent that the area would probably remain solid or go up in the next few years? We would possibly be interested in doing renovations. We are also open to Lakeway, TX but does anything think it might have issues holding its value?
We are renting first but considering buying a home in 1 year. Work from home.
Last edited by emeraldcitymer; 05-24-2014 at 02:26 PM..
I'd buy what you like now, in an area with good schools, and plan to stay. In 5 years, whatever you forego, wherever it is, will be a lot more expensive than today, so I think your 2-step approach may be worth reconsidering.
Look into SW Austin, anything that feeds into Bowie High or Austin High in the 78749 zip. Prices are exploding there now and if you wait 5 years it may be out of reach. But $425K today still gets you in.
I'd buy what you like now, in an area with good schools, and plan to stay. In 5 years, whatever you forego, wherever it is, will be a lot more expensive than today, so I think your 2-step approach may be worth reconsidering.
Look into SW Austin, anything that feeds into Bowie High or Austin High in the 78749 zip. Prices are exploding there now and if you wait 5 years it may be out of reach. But $425K today still gets you in.
Steve
So you're saying buy as much house as we can in a year? The reason we don't want to do that is because we would like some flexibility and not be tied to a mortgage with both of our salaries/ plus the opportunity cost of having a higher percentage tied up to housing right now, while we have no kids and don't need the kind of space or really need to consider the schools districts as much as we would if we had actual kids attending the schools. (Would prefer to be in Eanes or LTSD).
Besides, from what I see, it looks like it's around 700k to buy an entry home in an area like Eanes. If we do buy a house that we know we could stay in for over 5+ years or with kids, we would be better looking in LTSD for a house if we have to consider schools. I saw some nice homes for around 500k in LTSD. Any thoughts on this? We are very active/ run and play tennis everyday- like to golf and boat - grill out- but I have never lived that far out from a city and I'm not sure I would like it. On paper, Lakeway sounds like a great fit for us, but I think we won't know that until we are actually living in Austin... to be honest, I would probably want to even rent in Lakeway proper for 6 months before even considering buying there. I could see someplace like that being a good place with a family.
If the market really is increasing as much as you are suggesting, in 5 years, we will have benefitted from the increase in housing when we sell our own house, our salaries will be higher and we will can use the equity/ profit from the house to upgrade into a better house. Without having tied up so much into housing..
I have heard so many conflicting things about the housing trends.. is the next 12 months a good time to buy?
Last edited by emeraldcitymer; 05-24-2014 at 04:16 PM..
So you're saying buy as much house as we can now? The reason we don't want to do that is because we would like some flexibility and not be tied to a mortgage with both of our salaries/ plus the opportunity cost of having a higher percentage tied up to housing right now, while we have no kids and don't need the kind of space or really need to consider the schools districts as much as we would if we had actual kids attending the schools. (Would prefer to be in Eanes or LTSD). Besides, from what I see, it looks like it's around 700k to buy an entry home in Eanes of around 2000 or under square feet. If the market really is increasing as much as you are suggesting, in 5 years, we will have benefitted from the increase in housing when we sell our own house, our salaries will be higher and we will can use the equity/ profit from the house to upgrade into a better house. Without having tied up so much into housing..
I have heard so many conflicting things about the housing trends.. is the next 12 months a good time to buy?
My crystal ball hasn't be delivered yet; but, with a few exceptions, all areas in the Austin metro will increase in cost over the next year, IMO. There are a lot of other factors to consider in addition to schools, especially since you have no kiddos. Yes, highly rated schools mean a likelihood of appreciation; but that comes at a higher entry price on the front end. There are plenty of good schools outside of Eanes or LTISD. Trying to maximize property appreciation based strictly on school district seems a bit shaky...otherwise, EVERYbody would have to live in one or two school districts.
Renting for a year is a good idea for a number of reasons...maximizing return or timing the appreciation of a property ISN"T one of them(in THIS market, at THIS time). Renting a bare bones place for less than a year while you look isn't the worst idea; but you will not likely find a cheaper home at the end of that time...just one that might be more appropriate to your needs.
My crystal ball hasn't be delivered yet; but, with a few exceptions, all areas in the Austin metro will increase in cost over the next year, IMO. There are a lot of other factors to consider in addition to schools, especially since you have no kiddos. Yes, highly rated schools mean a likelihood of appreciation; but that comes at a higher entry price on the front end. There are plenty of good schools outside of Eanes or LTISD. Trying to maximize property appreciation based strictly on school district seems a bit shaky...otherwise, EVERYbody would have to live in one or two school districts.
Renting for a year is a good idea for a number of reasons...maximizing return or timing the appreciation of a property ISN"T one of them(in THIS market, at THIS time). Renting a bare bones place for less than a year while you look isn't the worst idea; but you will not likely find a cheaper home at the end of that time...just one that might be more appropriate to your needs.
Yes- if we bought in a year we wouldn't care if we were in a top rated district like eanes or lake travis. Looking too much into school districts now really limits what we can get in the budget of 425k or forces us to increase our budget.
This is the plan:
First- Arrive and rent a place for 1 year to get a good feel of the city.
1. After one year of renting, buy in an area that is "more affordable" than top hoods like the Eanes ones.. for around 425k. Live for 5 years or so.. Maybe have kids in this period.
2. Sell starter house before kids enter elementary school.
3. Buy another house and this time really look into the schools which probably means spending more than what we sold house 1 for.
I am 100% against buying right away. I want to rent for one year. We don't know if love Austin enough to stay and I don't think it's a good idea to buy a house when starting a new job.. too risky.. sure houses might be more in 2015 than they are now, but at least we won't get stuck in a neighborhood we don't know much about.
First of all, I'm biased, as I've recently purchased in Dripping Springs. That being said, I also recently posted a thread here identifying at least one objective source whose methodology suggests that DSISD is the Austin metro's premier school district (yes, better than both Eanes and LTISD, which I know is heresy for all the long-timers).
Secondly, while we can all presume that housing prices will be higher in 5 years than now, no one knows that for sure. Perhaps we'll have another RE crash.
Thirdly, I would argue that without too much difficulty you could invest in an index equity mutual fund and easily outpace the rate of return you'd realize if you purchased now. In other words, if you don't want to buy now, don't. Invest your capital in an S&P 500 index mutual fund and when you're ready to buy in 4-5 years, chances are that your portfolio will have (easily) outperformed the local RE market such that you'll be better off than if you purchased now before you're ready.
First of all, I'm biased, as I've recently purchased in Dripping Springs. That being said, I also recently posted a thread here identifying at least one objective source whose methodology suggests that DSISD is the Austin metro's premier school district (yes, better than both Eanes and LTISD, which I know is heresy for all the long-timers).
Secondly, while we can all presume that housing prices will be higher in 5 years than now, no one knows that for sure. Perhaps we'll have another RE crash.
Thirdly, I would argue that without too much difficulty you could invest in an index equity mutual fund and easily outpace the rate of return you'd realize if you purchased now. In other words, if you don't want to buy now, don't. Invest your capital in an S&P 500 index mutual fund and when you're ready to buy in 4-5 years, chances are that your portfolio will have (easily) outperformed the local RE market such that you'll be better off than if you purchased now before you're ready.
Best of luck to you!
Thanks! My boyfriend has the same attitude that you do about buying... housing is not an investment, it's a place to live and money is better invested elsewhere..
He sees the opportunity cost of spending too much % of income on housing until you actually have to (kids or space needed). I will definitely look into Dripping Springs.. do you have a neighborhood you recommend? Can you link the thread you posted about the school district. I would love to read.
Yes- if we bought in a year we wouldn't care if we were in a top rated district like eanes or lake travis. Looking too much into school districts now really limits what we can get in the budget of 425k or forces us to increase our budget.
This is the plan:
First- Arrive and rent a place for 1 year to get a good feel of the city.
1. After one year of renting, buy in an area that is "more affordable" than top hoods like the Eanes ones.. for around 425k. Live for 5 years or so.. Maybe have kids in this period.
2. Sell starter house before kids enter elementary school.
3. Buy another house and this time really look into the schools which probably means spending more than what we sold house 1 for.
I am 100% against buying right away. I want to rent for one year. We don't know if love Austin enough to stay and I don't think it's a good idea to buy a house when starting a new job.. too risky.. sure houses might be more in 2015 than they are now, but at least we won't get stuck in a neighborhood we don't know much about.
And THAT is one(or more) of the reasons I mention that makes renting a good idea. However, renting with intention of maximizing return down the road just puts you another year behind(IF the prices continue to rise as expected by many).
I must chuckle at the notion of a $425K starter home. The home we sold last year in Avery Ranch was 3600sq ft, all stone, Drees built, on 1/3 acre, nicely finished out, on 'green belt', highly rated school district, etc. etc. It sold for $450K less than a year ago. The nearly 4000 homes in Avery Ranch show just one example of folks not 'needing' to live closer in to Austin's core/downtown/business district.
Thanks! My boyfriend has the same attitude that you do about buying... housing is not an investment, it's a place to live and money is better invested elsewhere..
He sees the opportunity cost of spending too much % of income on housing until you actually have to (kids or space needed). I will definitely look into Dripping Springs.. do you have a neighborhood you recommend? Can you link the thread you posted about the school district. I would love to read.
To my knowledge (pls keep in mind that I currently live in Phx and will be relocating to Austin next week--have never lived in Tx before), Dripping really isn't the sort of community that most DINKs would enjoy. For young families, you'd probably be more interested in something like Belterra or Highpointe, two nice moderate master planned communities with lots of young families, small lots, decent amenities.
I'm a bit older, so we're past that stage in our life, and as a result decided to buy a couple of acres and custom build.
Here's the link to the report I previously referred to:
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