How did Austin dodge the bullet? (Cleveland, Detroit: real estate, foreclosures, mortgages)

[CptnRn]

I'm wondering why Austin has managed to do so much better then the rest of the nation during this financial melt down?

I guess some of the reasons are the stability that the University of Texas and State Government jobs that are here, combined with some good technology industries. Austin also doesn't seem to have had the real estate problems other places have suffered, why is that?

[Moonlady]

Texas as a whole hasn't had the real estate meltdown and I think taxes have something to do with it. Seems like I read that on this board - people couldn't get mortgages they couldn't really afford because they REALLY couldn't afford the tax bill on a house that was out of their range.

I think the employment is as you said - lots of government and education jobs. I guess we are pretty lucky to have a diverse economy in that respect.

[centralaustinite]

We suffered during the S&L meltdown in the 1980s and that made Texas bankers more conservative, home equity loans have only been allowed for the past 10 years and only for about 80% of the value (in some places, people could finance up to 110% of their home's value, and our punishing property taxes means that only people who can afford to blow $20,000 on property tax buy a million dollar home. Plus, we have a lot of undeveloped land, we are not up against a coast, so builders can always find lots to put up new homes.

So even with all the Californians coming here, we did not get a full on real estate bubble like other areas did. Our home prices stayed closer to the historic norms of 3-5 times average income (in other places, median home price rose to 10x average income, that cannot be sustained.

Education and state government stabilize employment, and the dynamics of growth (people moving here) are easier to manage than decline (people moving away). Just ask the mayors of Cleveland and Detroit.

[hoffdano]

I think there are many factors including the ones mentioned above. But good housing affordability also allowed people to buy homes with "normal" mortgages. Very few people here have exotic mortgages that are common on California and other states. I don't know anyone with an interest-only mortgage.

Fewer foreclosures, bankruptcies, etc. The dominoes just haven't started falling here like they did in other cities.

Texas politics, as screwy as they are, keep government spending in check. So even as tax revenues soften - most municipal bodies aren't in a big financial bind.

[AustinTexan]

Because we're smarter and not as obnoxious as most Californians, so we didn't pay $750,000 for an 800 sq ft home that we couldn't afford in the first place!!! Does that answer your question?

[mwv]

Ditto what centralaustinite wrote.

[artsyguy]

It didn't dodge any bullets, have you visited there? The only time you can get a job is if you are involved with corrupt cronyism and nepotism

[artsyguy]

Well California is a far more interesting state with far better climate and activities. That is why people pay those high prices.

Originally Posted by AustinTexan

Because we're smarter and not as obnoxious as most Californians, so we didn't pay $750,000 for an 800 sq ft home that we couldn't afford in the first place!!! Does that answer your question?

[readymade]

Originally Posted by artsyguy

It didn't dodge any bullets, have you visited there? The only time you can get a job is if you are involved with corrupt cronyism and nepotism

I got a job, and I'm not involved with corrupt cronyism and/or nepotism. I didn't know anyone when I moved here and yet still managed to find a job.

[Trainwreck20]

Heh, we just hired an out-of-stater that I am pretty sure doesn't know anyone here personally (well, until they started work ).