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Old 09-28-2009, 01:00 PM
 
Location: Round Rock, Texas
13,437 posts, read 15,347,491 times
Reputation: 18959

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Quote:
Originally Posted by sliverbox View Post
The median income for Austin is around $68,000. The median home price in the area is as of now $191,000. Rule of thumb says a house should not be over 3x's earnings. Thus if you compare medians to medians, Austin's prices are actually overinflated by around $12,000 on average. So yes- Austin has a bubble-albeit perhaps not "as bad" as other areas, but a bubble just the same.

riaelise, How in the heck are you paying $2,100 a month for a 250k house? That's the same that I would pay if I bought a $375,000 house in the Bay Area. Did you put anything down?
I put 3% down because at the time there was no real difference between 3, 5, or 10 percent down. We'd still be stuck paying PMI and so we decided to keep the rest of the money. We pay $450 a month in taxes, and when Pflugerville annexes us next year, it will be close to $600 per month in taxes. That can easily raise the price of a home to $2K/month.
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Old 09-28-2009, 01:26 PM
 
112 posts, read 324,311 times
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Quote:
Originally Posted by sliverbox View Post
Jenn,
We actually drove around a lot of neighborhoods in Austin. We racked up over 1,200 miles in 4 days, much of it in various neighborhoods. We would take samples from each neighborhood of houses for sale. I felt that the prices were really all over the place. There were an awful lot of 450-500k houses that I was like WTF? Like why is this sort of so-so house in a not very interesting neighborhood this much money? I found out from locals that some of these areas were expensive because the schools were supposedly good. That's a whole lot of moolah just to live near a good school. Send your kids to private school because for Chrissakes it would be cheaper than paying $8,000 a year forever on a house per year.

Yes- there were some nice houses in the hills. I understand why some were more than others. But in the Bay Area you pay more because you live near the ocean or because the scenery is amazing. But in Austin I didn't feel that some of these pricey areas were all that different from the cheaper areas. It gave me this impression that there's a pretty clear separation of class there and people like to let people know that they have the money- thus they live in a neighborhood that looks in my opinion the same as others costing 50% less.

I also think there's probably a lot of people who moved in from out of state, saw the prices, and didn't think about the taxes. All they thought "was-oh goody, look, a 300k house which is cheap compared to NY/CA/MA, etc etc. Its so cheap!" I wonder how many of them are now screwed financially. All it would take is a job loss and the taxes will eat them alive.

After driving around, I have a good idea where we would look for houses. I also have no desire to pay anything over 150-200k max for taxes alone.
Just curious, what area have you decided to live in?

I do agree with alot of what you have said regarding neighborhoods being overpriced. However, in Austin, I think alot of what you see is that people are willing to pay more $$ to live closer in due to the commute. This can probably be said for any city. Basically, people are willing to pay more to live closer to where they work, and if that is downtown or in the central area, then the houses there will be more expensive.
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Old 09-28-2009, 01:44 PM
 
2,106 posts, read 5,769,028 times
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We saw that chunks of South Austin were pretty affordable. These tended to be in the not-so-pretty areas. What we found was that some areas looked almost like they were in the ghetto. But we spent a whole day around the area, talked to people, and found that it tended to be heavily populated with younger people ( 20's-30's). Some areas were not near schools. One couple we met gave us 4-5 neighborhoods ( don't recall them exactly) to look at which were cheaper and had lower property taxes. We have no kids, so we don't need good schools, squeaky-clean neighborhoods. I gather some places we were looking probably aren't appetizing to families who would see them as too dangerous looking. The houses in the areas we looked were small. As in 2 bedroom deals.

On the other hand, I really liked Georgetown. Its a bit far out. But I liked the small town feel. It would suck because you have to go out past Round Rock. I also really liked Lockhart. Its way down South and you drive through about 35 minutes of nothing to get there. But it has kick-ass BBQ. Since there was no development near it, it was not bad getting out there. Much more rural. But... I imagine someday that too will get filled with housing. But it had a nice little downtown area.

So basically I'm avoiding the areas that seem to get called up on this forum and others, such as Round Rock, Phlugerville, and so on. I think you can still get a pretty good deal on a house and still live in non-cookiecutter land. But you have to do some research and if we wind up out there, we'll do more and look around at least a year before deciding. Could very well be too expensive period if taxes are as much as mentioned above.

The houses in the areas we looked were small. As in 2 bedroom deals.
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Old 09-28-2009, 01:55 PM
 
Location: Round Rock, Texas
13,437 posts, read 15,347,491 times
Reputation: 18959
I've been meaning to ask this question, but don't want to start another topic. What's the issue with "cookie cutter"? It seems to be an umbrella term for all new home subdivisions, and it's used in a derogatory fashion. I think most subdivisions started off cookie cutter. The builder had four or five floorplans and people chose either of those four or five with varying facades (brick, stucco, etc.). Take a real look at some of the older subdivisions and you'll see a repetition of floor plans. IMHO, I just don't see why 'cookie cutter' is that much of a bad thing.
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Old 09-28-2009, 02:02 PM
 
2,106 posts, read 5,769,028 times
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riaelise,
It depends on taste. As for me, I grew up in a small rural area. There were lots of old houses and many were decades apart in age. Lots of really large yards, as in acres of land each. That's what I am used to. They started building subdivisions when I was in middle school about 5-6 miles from my parent's house. Huge fields getting filled with vinyl-clad, 3,000 sq foot houses about 10 feet apart, with baby bradford pear trees, and with funny names like: " Oak Run", or "Whispering Pines" or whatnot. I've never liked this kind of development. Perhaps because I didn't grow up like that.

I think that for families with kids who just want a place to raise them, to have them go to schools, and to have a element of stability, this type of housing is fine. I think there's a lot of people who look at houses like cars: How nice are the bathrooms, how many rooms is it, and how safe is the area they're built in? Its obvious that most Americans like this type of housing because that's about all you see. Financially it works out great for the builders because they can build them quick and cheap thus they make big profits.

But as for me personally, I drive through the neighborhoods and I can't imagine living there. They're so generic it makes me wonder why you couldn't just move to Ohio because it would be the same thing.

Anyhow, its just personal preference, that's all.
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Old 09-28-2009, 02:44 PM
 
2,238 posts, read 8,986,020 times
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Quote:
Originally Posted by sliverbox View Post
riaelise, How in the heck are you paying $2,100 a month for a 250k house? That's the same that I would pay if I bought a $375,000 house in the Bay Area. Did you put anything down?
I recently refinanced my mortgage balance and it was right at $250K...

250,000 @ 4.80% fixed APR for 30 years = $1,311.66/mo.

With taxes & insurance my payment is $2000/mo.
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Old 09-28-2009, 04:14 PM
 
Location: SW Austin & Wimberley
6,330 posts, read 17,982,821 times
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Quote:
Originally Posted by sliverbox View Post
You sound EXACTLY like someone from the Bay Area. I'm sorry, but a $400k house that comes with an automatic 3% property tax is in fact an overpriced house.
The really cool thing is, you get to vote with your wallet, and I get to vote with mine. I'm a real estate owner and investor. I never ask anyone to do anything I'm not doing myself.

Bookmark this thread and come back in two years and we'll see where Austin home prices are. They will be higher. Of that I have no doubt. Those who purchase right now, in the right areas, will have built some equity and increased their wealth. Other will still be renting, wondering why they passed up 5% interest, $8K tax credit, and lots of inventory back in late 2009.

I study and prepare detailed market stats and trend analysis for austin every month. You drove 1,200 miles in 4 days. I've lived in Austin since 1985. You drove 1,200 miles in 4 days. All of my investors own property in Austin worth more than what they paid. You don't own any real estate in Austin, but claim to know more than those of us who actively invest.

Good for you. See you in two years and we'll compare stats.

Steve

Go ahead and mock me, but
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Old 09-28-2009, 05:18 PM
 
Location: Myrtle Beach
3,381 posts, read 9,084,527 times
Reputation: 2943
Quote:
Originally Posted by sliverbox View Post
It gave me this impression that there's a pretty clear separation of class there and people like to let people know that they have the money- thus they live in a neighborhood that looks in my opinion the same as others costing 50% less.

I also think there's probably a lot of people who moved in from out of state, saw the prices, and didn't think about the taxes. All they thought "was-oh goody, look, a 300k house which is cheap compared to NY/CA/MA, etc etc. Its so cheap!" I wonder how many of them are now screwed financially. All it would take is a job loss and the taxes will eat them alive.

The price difference in Austin is about location and to some point how influential the neighborhood is. I too thought everything looked the same and therefore went for a less expensive house in Plfugerville. After living there for 2 years I wish I had paid more to live on the West side of town as I kept finding myself driving to the west side of town for various reasons, mostly for shopping/eating/event reasons.

Buyer beware when buying a new home. I was new to the area had no idea what house taxes were like there and was given a 'good faith' estimate on what my house payments would be with Property Tax from D.R. Horton's Mortgage Company. I asked if the good faith estimate included the improvement on the land since since the house had just been built. I was assured that it was. They were wrong and my Mortgage shot up 250/mo after the first year. Nothing I could do about it, even though it was documented in the paperwork. Unfortunately 'good faith' estimates were not regulated and they had already sold the loan to Countrywide. The home was great, the neighborhood was great but screw D.R. Horton and their employees.
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Old 09-28-2009, 05:58 PM
 
Location: Avery Ranch, Austin, TX
8,977 posts, read 17,449,279 times
Reputation: 4000
Until something changes, I'm OK with paying property taxes that are roughly equal to the state income tax and property tax plus ~1% ad valorum tax on vehicles we had in Atlanta. It's a wash for us. Apologies to those whose property values have dramatically increased over the years, resulting is much higher taxes--I've never heard a perfect answer to that one. No free lunch and all that.

BTW, in our 'cookie cutter' subdivision, our neighborhood of 350 homes has one other home with our floor plan(with a different facade). I guess there are cookies and there are cookies.
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Old 09-28-2009, 06:02 PM
 
Location: Avery Ranch, Austin, TX
8,977 posts, read 17,449,279 times
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Quote:
Originally Posted by inthecut View Post
That's just a few deals....and lower end ones at that......taking into acount the ENTIRE Austin RE market, and looking 1-3 years into the future, is a entirely different picture.....
Just as soon as I am in the market for the ENTIRE Austin area, I'll check back in.
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