general question about housing prices in Austin (Round Rock, Rogers: for sale, real estate)

[hudson4351]

I apologize if this is a dumb question, but I recently moved to Austin and was shocked by the number of extremely high-priced homes I found here. First of all, let me qualify my statement. I am only in my 20's, have never lived in a city anywhere near as large as Austin before, and grew up in KS. It was rare to even find a house for sale where I lived for much over $500,000, and that would buy you a small mansion. I realize that for people moving to Austin from very expensive areas, the housing prices may seem like a bargain by comparison , so in a way, this whole discussion is relative.

Nevertheless, whenever I browse Austin real estate listings, I notice a very large number of houses in the $500k - $1 million range, and a suprisingly large number of houses in the $1 million - $4 million range. There were even a few going for $10+ million

My question is - Is the overall population of Austin really that wealthy that so many people can afford these $500k - $1 million houses, or is there some other explanation?

Here are the possibilities I could come up with:

1. The population of Austin really is that wealthy
2. The house and/or money was inherited
3. They bought a long time ago and have seen very good appreciation
4. They are stretched very far beyond their means
5. The houses don't actually end up selling for their list price
6. Some combination of 1-5

Does anyone who has lived here for awhile have any comments on this?

[GreenPlastic]

Lots of retirement money comes here.

Lots of high tech and leftover dot com money.

Lots of relocation from CA and other highpriced real estate states.

There has been a lot of appreciation lately. The newer $1 million+ homes did not exist 10 years ago, and the $1 million homes in Tarrytown could be bought for much less back then. Lots of new money in town (Dell, dot com, etc.).

[Tom Williams 9]

the market will have to check I think , there is alot over way over priced inventory

[Megan1967]

That's weird. I'm finding all of these great homes in the $175,000 to 200,000 range, Do they just photograph really well? Of course I'm looking in areas like Round Rock because I'm not sure I can afford Austin proper.

How far is RR from downtown?

[socrates1234]

Originally Posted by hudson4351

I apologize if this is a dumb question, but I recently moved to Austin and was shocked by the number of extremely high-priced homes I found here. First of all, let me qualify my statement. I am only in my 20's, have never lived in a city anywhere near as large as Austin before, and grew up in KS. It was rare to even find a house for sale where I lived for much over $500,000, and that would buy you a small mansion. I realize that for people moving to Austin from very expensive areas, the housing prices may seem like a bargain by comparison , so in a way, this whole discussion is relative.

Nevertheless, whenever I browse Austin real estate listings, I notice a very large number of houses in the $500k - $1 million range, and a suprisingly large number of houses in the $1 million - $4 million range. There were even a few going for $10+ million

My question is - Is the overall population of Austin really that wealthy that so many people can afford these $500k - $1 million houses, or is there some other explanation?

Here are the possibilities I could come up with:

1. The population of Austin really is that wealthy
2. The house and/or money was inherited
3. They bought a long time ago and have seen very good appreciation
4. They are stretched very far beyond their means
5. The houses don't actually end up selling for their list price
6. Some combination of 1-5

Does anyone who has lived here for awhile have any comments on this?

Mr. Rogers says, "Can you say California"?

[socrates1234]

Originally Posted by Megan1967

That's weird. I'm finding all of these great homes in the $175,000 to 200,000 range, Do they just photograph really well? Of course I'm looking in areas like Round Rock because I'm not sure I can afford Austin proper.

How far is RR from downtown?

The average RE price in Austin is 186,000, so you must have been looking at the luxury RE section........most stuff is under 400K here.........and 60-70% prob is under 300K. Austin houses were dumpy for the most part till late 80's......when it was just a sleepy college town..........now it is CAlifornicated

[austin-steve]

Originally Posted by socrates1234

The average RE price in Austin is 186,000, so you must have been looking at the luxury RE section........most stuff is under 400K here.........and 60-70% prob is under 300K. Austin houses were dumpy for the most part till late 80's......when it was just a sleepy college town..........now it is CAlifornicated

This is about right. Median price is still in the $180,000s overall. If you stick to Austin proper, it is higher though, more like the mid $200s.

Austin does have a lot of wealth too though.

Steve

[golfgod]

All of the reasons you mentioned fit the market. But there is one that no one has posted yet; It's the state capital, which means lots of political movers and shakers. If you have business with the state you will have attorneys, lobbyists and public relations folks on your payroll in Austin.

And in TX when you've got it, you show it off! I moved it 30 years ago and read (perhaps in Texas Monthly) that it's a time honored tradition in TX when you've got lots of money to show it off by flashily dressing your home, horse, spouse and chldren in such a way that everyone else will know that you've got it. I've never seen much evidence against that theory.

golfgod

[austin-steve]

And in TX when you've got it, you show it off! I moved it 30 years ago and read (perhaps in Texas Monthly) that it's a time honored tradition in TX when you've got lots of money to show it off by flashily dressing your home, horse, spouse and chldren in such a way that everyone else will know that you've got it. I've never seen much evidence against that theory.

I've actually experienced just the opposite. I know a lot of people with money, and most live below their means from a "flash" standpoint. I think there are more people who fit the "Millionaire Next Door" profile.

When I see people who are outwardly flashy, I assume they are broke, and they probably in fact are, living paycheck to paycheck trying to keep up appearances.

Steve

[atxcio]

Originally Posted by hudson4351

Here are the possibilities I could come up with:

1. The population of Austin really is that wealthy
2. The house and/or money was inherited
3. They bought a long time ago and have seen very good appreciation
4. They are stretched very far beyond their means
5. The houses don't actually end up selling for their list price
6. Some combination of 1-5

Does anyone who has lived here for awhile have any comments on this?

I've lived here for awhile, just over 18 years. The amount of higher-priced homes has definitely increased big time in the past 10 years, but so has the area population. I think it may be tied to the overall Texas population boom -- Austin has always seen been as the "cool" city in Texas, especially for Texas residents (perhaps many of them yearn to return to the best years of their lives, probably spent at a university around here?)... So, despite the California influx, there are still plenty of wealthy Texans from all over the state who would like to live or own something here. It's a bit like Aspen to Colorado, or the Central Coast for CA... there is always demand from in state, at the very least.

So, back to your list --

Since there are obviously people paying these prices (the houses do get sold), it can't just be #2 or #3, or even #5. I would say #1 (people are that wealthy) and #4 are definitely true (with #4, or "stretched very far beyond their means", being very common throughout the US right now.)

We'll get to see how true #1 is over the next year...

The whole upscale market here is about to be tested in a very big way: In the Austonian, a new condo building downtown, $500K will get you nothing. Add about $60K and somewhere around $800/month HOA, and you can get their smallest 1 BR with a "city" (looking at the back of another building) view. If you consider a unit on the higher floors with a view and account for the property taxes, you're talking Manhattan studio money! To me, that's off the charts for this city, or even Texas. But that's what they are trying to get, and we'll know soon enough if it happens.