Austin on track to be the least affordable metro for homebuyers outside of CA (Dallas: fit in, real estate)

[ipott]

"... according to a forecast prepared by Zillow, a real estate company that tracks affordability, the Austin metropolitan area is on track to become by year’s end the least affordable major metro region for homebuyers outside of California. It has already surpassed hot markets in Boston, Miami and New York City."


https://www.nytimes.com/2021/11/27/u...able-city.html

[NigerianNightmare]

Originally Posted by ipott

"... according to a forecast prepared by Zillow, a real estate company that tracks affordability, the Austin metropolitan area is on track to become by year’s end the least affordable major metro region for homebuyers outside of California. It has already surpassed hot markets in Boston, Miami and New York City."


https://www.nytimes.com/2021/11/27/u...able-city.html

They need to build so much more housing, especially East of the city, as well as up-zone a lot of the central parts of the city but because those zip codes aren't that desirable, we instead have the millionth person trying to fit in Leander, and established neighborhoods. So it's a conundrum, that won't really rectify itself without Leander/Desirable Austin becoming so overpriced, or Georgetown/Round Rock/Williamson County being built out to the point were it makes more sense to go to Bastrop/Lockhart/South or East Travis/Hays County instead.

Dallas still hasn't hit that will Collin County, but Ellis County seems to be seeing increasing growth either way. So it will likely take a very long time for it to happen.

[ashbeeigh]

Originally Posted by NigerianNightmare

They need to build so much more housing, especially East of the city, as well as up-zone a lot of the central parts of the city but because those zip codes aren't that desirable, we instead have the millionth person trying to fit in Leander, and established neighborhoods. So it's a conundrum, that won't really rectify itself without Leander/Desirable Austin becoming so overpriced, or Georgetown/Round Rock/Williamson County being built out to the point were it makes more sense to go to Bastrop/Lockhart/South or East Travis/Hays County instead.

Dallas still hasn't hit that will Collin County, but Ellis County seems to be seeing increasing growth either way. So it will likely take a very long time for it to happen.

Project Next and rezoning are at the bottom of what you're talking about. I'm not sure what the answer is here.

[dicipher]

Try not to be misled by the article. By no means is Austin even close to being one of the highest in median home price. And therein lies part of the problem. I suspect it's not even in the top 20

[atxcio]

Originally Posted by dicipher

Try not to be misled by the article. By no means is Austin even close to being one of the highest in median home price. And therein lies part of the problem. I suspect it's not even in the top 20

Help us understand here. You don't believe ~550K is the median home price in Austin, or you don't believe that 550K is in the top 20 nationally? And how is that part of the problem?

[dicipher]

Originally Posted by atxcio

Help us understand here. You don't believe ~550K is the median home price in Austin, or you don't believe that 550K is in the top 20 nationally? And how is that part of the problem?

It's not a matter of my beliefs, but rather what the numbers show. A median home price of $550k is not in the top 20 of cities nationally. The article is talking about "affordability" which is different than median home price and deals with the COL of an area relative to income. I suspect many people reading what the OP emphasized would actually believe that a home cost more in Austin than New York City or Boston, which couldn't be further from the truth.

The problem is, many people coming from outside the area from other high COL areas still see Austin as a bargain. And that's especially true with retirees (i.e. our shack just outside SF goes for 3x the current market cost of the home we bought in Round Rock). We have Tesla coming in and Samsung (not to mention already having a presence with Dell, Apple, Google, and many other companies coming to the area for the corporate tax breaks). What will the pay be like with those new employees? Will affordability be a problem for them? If not, the sky's the limit on real estate pricing.

The other factor is closeness to the city center from the suburbs. The prices you can get for homes inside of a 20 miles radius to the city center are a very good buy compared to other metroplexes. And as much as people whine about the traffic, it doesn't compare to bigger metropolitan areas (I know people don't want to hear that). It'll get worse though.

P.S. I also think the author of the article is being a bit silly by saying "outside of California" since this is one of the states where people are migrating to Austin from. You actually should be directly comparing to California and any other high COL states migrating to Austin because that will be the source that will drive up costs. It's not different than someone relocating from Austin to a lower COL area and feeling that is a bargain for them.

[Need4Camaro]

Originally Posted by atxcio

Help us understand here. You don't believe ~550K is the median home price in Austin, or you don't believe that 550K is in the top 20 nationally? And how is that part of the problem?

I think it’s expensive and nothing to take lightly, but median values rise very steeply within the top 20, Austin may be there (I tried searching but can’t find any reference with current home values that wouldn’t require me to decipher every single entity in the USA which I’m not doing at 3am between naps) but I believe many other cities you wouldn’t think of would also be there such as Denver, Salt Lake City, quite possibly even the northern burbs of DFW and everything within the top 20 also saw home value appreciation during 2020 as well, although Austin was very pronounced due to how significantly less expensive it was prior…

For reference basis:

Salt Lake City: $565k
Denver: $577k
Anchorage AK has a median home price of about $585k, exceeding our own…
Portland OR: $617k
Boston MA: $800k
Seattle WA: $830k (keep in mind there was a time you could buy in Seattle area for under $500k as well)
NYC: $800k to 1.5 Mil+ depending on where and the more affordable $800k ballpark is going to leave you much further from the city.
Los Angeles/San Diego: $900k
Arlington Virginia (although not a metro, does reflect the prices of the DC metro area): $950k
Honolulu HI: $1.4 Mil

Even with those listed (and this is excluding several much smaller entities that also have home values nearly doubling ours), do you see how steep median values climb? We are talking median values that literally double Austin’s in premiere cities. That’s emphasizing even if Austin is in the top 20, that doesn’t necessarily mean that we are knocking on the door of NYC, SFO, LAX, SEA, BOS. We are more in line with Denver and SLC in terms of home values but almost expensive due to less inventory ironically than those metros with more geographic barriers.

Austin today is about what Seattle was like in terms of home values back when I lived there almost a decade ago.

[dontbelievehim]

Sure about Anchorage?
I remember finding some dirt cheap condos a few months back. Market didn't seem that up and coming to me back then.

[atxcio]

Originally Posted by Need4Camaro

I think it’s expensive and nothing to take lightly, but median values rise very steeply within the top 20, Austin may be there (I tried searching but can’t find any reference with current home values that wouldn’t require me to decipher every single entity in the USA which I’m not doing at 3am between naps) but I believe many other cities you wouldn’t think of would also be there such as Denver, Salt Lake City, quite possibly even the northern burbs of DFW and everything within the top 20 also saw home value appreciation during 2020 as well, although Austin was very pronounced due to how significantly less expensive it was prior…

For reference basis:

Salt Lake City: $565k
Denver: $577k
Anchorage AK has a median home price of about $585k, exceeding our own…
Portland OR: $617k
Boston MA: $800k
Seattle WA: $830k (keep in mind there was a time you could buy in Seattle area for under $500k as well)
NYC: $800k to 1.5 Mil+ depending on where and the more affordable $800k ballpark is going to leave you much further from the city.
Los Angeles/San Diego: $900k
Arlington Virginia (although not a metro, does reflect the prices of the DC metro area): $950k
Honolulu HI: $1.4 Mil

Even with those listed (and this is excluding several much smaller entities that also have home values nearly doubling ours), do you see how steep median values climb? We are talking median values that literally double Austin’s in premiere cities. That’s emphasizing even if Austin is in the top 20, that doesn’t necessarily mean that we are knocking on the door of NYC, SFO, LAX, SEA, BOS. We are more in line with Denver and SLC in terms of home values but almost expensive due to less inventory ironically than those metros with more geographic barriers.

Austin today is about what Seattle was like in terms of home values back when I lived there almost a decade ago.

Great reference, seems like 6-10 reference cities, the top of those... but still, doesn't Austin fall in the 20 highest median price/least affordable? I think it might...

[Need4Camaro]

Originally Posted by atxcio

Great reference, seems like 6-10 reference cities, the top of those... but still, doesn't Austin fall in the 20 highest median price/least affordable? I think it might...

It’s hard to say and would take a great deal of research. Miami for example has a slightly lower median home value than we do, but they also have a much lesser median income than we do making Miami a harder place to live financially, however; our higher incomes are heavily catered to few specific fields (tech, government, higher education basically) where those not in those fields make significantly less than the CoL.

Basically in my uneducated summary, if you’re in tech or another high paying role then it’s still doable. If you’re not, then most likely inflation & home appreciation has largely outpaced salary raises and it’s increasingly more difficult… What will likely happen will be similar to what happened in the Pacific region. It will be a place of a very large divide between the haves and have nots, virtually nothing in between.