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bestbike85

A thread to discuss Central Texas real estate

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Lived in Austin for about 4 years. Wife and I moved to south west Denver July 30, 2020. Life throws a few curve balls and we are coming back to the greater Austin area in the next few months. 

We visited Austin for 4 days this past weekend in an effort to find housing and gather our thoughts as to what we really want out of our move back to Austin. 

Man was I wrong. This is unbelievable. Homes appraised for 400k are listed for 450k and selling for 500k. Every single cookie cutter neighborhood up in Leander is completely sold out. We showed up at a development off of N Baghdad in Leander. 220 home sites and not a single slab was poured yet. Every single one was sold. We even went over to Hutto and the 2 we visited said nothing would be available until 2022.

We both grew up modestly well outside of any major city, and we want to maintain that modest lifestyle for ourselves and our future kids. 

I come here to discuss how, on many different fronts. 

How do people simply purchase these homes? I hear the excuse from realtors that say “Thanks Facebook, apple, google”, but not everyone works for big tech. How do plumbers afford these houses? How about civil engineers? How does a family that comprises of a police officer and a nurse afford a 600k home? How about school teachers? 

How is this sustainable?

How did it even get to this level? 

I’ve been scratching my head for a few days now about this. 

My wife and I have zero debt and nice stable incomes, but I can’t for the life of me think that over spending by 25-40% is a good investment. How does everyone else think that it is? 

Lastly, anyone here work in real estate and want to offer some tips/input? 

Thanks for letting me rant here. 

Looking forward to riding bikes in Austin again in 2021. 

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2 minutes ago, bestbike85 said:

How do plumbers afford these houses? How about civil engineers? How does a family that comprises of a police officer and a nurse afford a 600k home? How about school teachers? 

How is this sustainable?

How did it even get to this level? 

You are asking all the right questions and you're now seeing what people in the big cities have had to deal with for years and why NYC has rent-control.  We are worse off though, because we don't have decent public transport like those big cities, so living in a cheaper borough comes with the additional price of long commutes and a car to pay for and maintain.

Partly to blame are speculators and short-term rentals.

How do people afford modest $800k homes in-town?  I can tell you I wouldn't be able to even consider one, except for my $210k (ca 2003) is now worth almost 3x that.

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It is insane. I bought my house 14 years ago for 1 years current salary. I have people knocking on my door to try to get me to sell. I'm in Falcon Pointe in N. Pflugerville and houses here sell before the *for sale* signs go up. 

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Austin is getting to the head scratching point that California has been at forever.

When I graduated, a LONG time ago, a friend and I were hired by the same company. He went to San Francisco and I went to Dallas. We both were making the same salary. But his apartment cost three times more than mine. How does that even work?! I still don't understand how it works.

It has been fun getting the emails from Zillow telling me how much my property is worth these days. And it's not even yearly changes. It goes up month by month. Ridiculous. Of course it's no fun getting the property tax statements.

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Got an email from my realtor saying she was running out of homes to sell and if i knew anyone that could be persuaded. I responded by saying if you list my place for a stupid high price, and get me close, I'll sell this summer and rent for a year until my youngest graduates from HS. 

Homes i wouldn't even consider putting my family in three years ago, are out of my budget now. Can't even imagine coming back to this insanity.

 

Gonna get out while the gettin' is good

Thank you Elon

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A lot in my neighborhood sold for $950K. A teardown for $950K. They put two monstrosities on that lot. Two people spent $1.3+ for a big hot on half a lot. Ugh.

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23 minutes ago, AustinBike said:

A lot in my neighborhood sold for $950K. A teardown for $950K. They put two monstrosities on that lot. Two people spent $1.3+ for a big hot on half a lot. Ugh.

Sounds like you should burn your house down, collect the insurance, then sell your lot...twice.

(remove bikes first)

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5 hours ago, bestbike85 said:

Lived in Austin for about 4 years. Wife and I moved to south west Denver July 30, 2020. Life throws a few curve balls and we are coming back to the greater Austin area in the next few months. 

We visited Austin for 4 days this past weekend in an effort to find housing and gather our thoughts as to what we really want out of our move back to Austin. 

Man was I wrong. This is unbelievable. Homes appraised for 400k are listed for 450k and selling for 500k. Every single cookie cutter neighborhood up in Leander is completely sold out. We showed up at a development off of N Baghdad in Leander. 220 home sites and not a single slab was poured yet. Every single one was sold. We even went over to Hutto and the 2 we visited said nothing would be available until 2022.

We both grew up modestly well outside of any major city, and we want to maintain that modest lifestyle for ourselves and our future kids. 

I come here to discuss how, on many different fronts. 

How do people simply purchase these homes? I hear the excuse from realtors that say “Thanks Facebook, apple, google”, but not everyone works for big tech. How do plumbers afford these houses? How about civil engineers? How does a family that comprises of a police officer and a nurse afford a 600k home? How about school teachers? 

How is this sustainable?

How did it even get to this level? 

I’ve been scratching my head for a few days now about this. 

My wife and I have zero debt and nice stable incomes, but I can’t for the life of me think that over spending by 25-40% is a good investment. How does everyone else think that it is? 

Lastly, anyone here work in real estate and want to offer some tips/input? 

Thanks for letting me rant here. 

Looking forward to riding bikes in Austin again in 2021. 

Welcome to Long Island, circa 2004. I bought my last house on Long Island for $125k in 1999 sold it in 2004 for $300k. After 9/11 nobody wanted to live in the city so they started buying houses in the suburbs. Drove housing prices through the roof. I suspect that some of that is happening here due to the pandemic. Good luck just be mindful that you're trying to buy in a sellers market. Meaning the house you buy my devalue once all the dust settles.

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1 hour ago, notyal said:

Sounds like you should burn your house down, collect the insurance, then sell your lot...twice.

(remove bikes first)

The first rule of home arson club is nobody talks about home arson club.

oh, and I do have an extra wide lot because the cross street was laid out and never connected. Previous owner bought that land in the 70s or 80s I guess.

But as tempting as selling is, when you are walking distance to both Draught House and Pinthouse, it’s worth staying.

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Posted (edited)

Seven years ago, we paid a little less than $200k for a 3 bed, 2 bath, 1,400sqft house opposite MOPAC from Dick Nichols Park 78749. The short version of this story is that we could have paid a LOT more but made it work at the time. We got very lucky that the house never went to market.

We make quite a bit more money now, but it's still a relatively blue collar income. No kids, that helps. But if we tried to buy a house in the area today, I can't imagine how we'd do it. my wife watches housing closely and it's insane. We could easily get $400k if we sold it as-is tomorrow.

We're considering leaving Austin in the next year or two, but it would be a shame considering how good we have it. If we do, we'll probably keep our house and rent it out, which might make us part of the problem.

Edited by mack_turtle
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1 hour ago, Chief said:

Good luck just be mindful that you're trying to buy in a sellers market. Meaning the house you buy my devalue once all the dust settles.

There are a few things I have as criteria in order for a house to hold its value even in a down market:  schools, mature trees/age of neighborhood (i.e. what is that new neighborhood going to look like 5-10years from now if things take a downturn?), and location.  I have less problem buying something 1200-1400 sq. ft midtown for $800k right now than buying something farther out for $500k or whatever.  We're selling my late MIL's house in Manchaca and we got letters from the people putting offers telling us why we should pick them.  That's a thing now.

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1 hour ago, mack_turtle said:

We're considering leaving Austin in the next year or two, but it would be a shame considering how good we have it. If we do, we'll probably keep our house and rent it out, which might make us part of the problem.

Not if you regular rent it.  More long term rentals are good.  It's the airbnb and vrbo houses that are a problem.

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2 hours ago, mack_turtle said:

We're considering leaving Austin in the next year or two, but it would be a shame considering how good we have it. If we do, we'll probably keep our house and rent it out, which might make us part of the problem.

We've got a Sr & a Jr (and a 6th grader).  We are contemplating this same thing after our kids graduate.  We've been here since the mid-90's and love the hills, lakes, food, etc..  But just last weekend we were both talking about how Austin has simply 'move away from us' over the passed 20yrs.  I enjoyed the dope-smoking, birkenstock-wearing hippies, but I'm much less of a fan of the douchie, Lambo-driving 'shiny shirt crowd'.  The cycling scene is amazing and that would be greatly missed.  But I hear Bentonville has some good riding too.... 😉

On a real estate related note...
In the past 6 weeks, I've had 3 separate occasions where someone in that world told me about a house that sold for $100k above asking price!  And we are talking $4-500k homes.  One of these people (a realtor) said that she is showing clients places out as far away as Jarrell(!!) as options to living in the ATX 'metro-flex'.  WTF?!?

@bestbike85 the answer to some of your questions are not unlike what has been happening in San Jose CA and Bay Area for past 10+ yrs.  Blue collar, working type people simply just don't move in there.  They move an hour away and commute in to the city.  About 15 yrs ago I worked for a company that had home office near Malibu and I had heard some of the people that lived in the area talking about 50 yr mortgage loans!  If your fiscally sensible and have a only moderate level job, then Austin is no longer a place for you.  It just not...

Later,
CJB

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I know people in the Silicon Valley area that live in a 5th wheel with a family.  That's pretty smart I think.  They're enjoying it, they homeschhool their kids,

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31 minutes ago, AntonioGG said:

I know people in the Silicon Valley area that live in a 5th wheel with a family.  That's pretty smart I think.  They're enjoying it, they homeschhool their kids,

All joking aside, I think these sort of economic parameters is what has birthed the tiny-house trends.  Cheap, affordable, reductionist and potentially mobile.

-CJB

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Posted (edited)

To me, its all relative. We can live in an expensive city and have to earn a lot of money, with high stress jobs to pay for the privilege of residing there. Residing, not living as you'll spend most of your time working, commuting and generally being too stressed to enjoy life. That's not even taking into consideration if you even have enough money after expenses to afford any real leisure activities. The risk is high and the fall is far if something goes crossways and as we all know, shit goes crossways.

You could also live some place that's less populated, has great outdoor activities, a far better quality of life and is easily affordable. The hitch is you earn less and jobs are tougher to come by.  

We are leaning heavily towards the latter

Edited by ATXZJ
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Posted (edited)
8 hours ago, CBaron said:

If your fiscally sensible and have a only moderate level job, then Austin is no longer a place for you.  It just not...

Tell that to the wife who is accepting her dream job in Cedar Park. 

But in all reality, I’m just trying to come up with a game plan. I didn’t want to spend more than a 2-2.25 multiple on our household income, but it’s looking to be more like a 2.5-3 multiple to get anywhere. I hate to stretch like that, but it is the only option if we decide to buy.

Which brings me to another point. All signs point to not buying. This isn’t sustainable, and it seems to be happening everywhere (Dallas, Houston, Lafayette La, etc.). The bubble will pop eventually and things will normalize. I just hope that happens in the next 12-15 months so I can secure something summer 2022. 

Edited by bestbike85

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What about Liberty Hill, or even Burnett area? Are they getting worse also? 

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4 minutes ago, TheX said:

What about Liberty Hill, or even Burnett area? Are they getting worse also? 

We went to Liberty Hill and Bertram. While a bit more affordable (especially Bertram), there is nothing available. 

I would love to live in Burnett, Llano or even Marble Falls, but the wife is a Nurse Practitioner and has to actually show up to an office to see patients. A bit different than me dealing with people across the globe from the comfort of my house shoes. So she has ruled out those long commutes. 

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9 minutes ago, TheX said:

What about Liberty Hill, or even Burnett area? Are they getting worse also? 

I don't know about Burnett, but Liberty Hill is getting ridiculous as far as house pricing. A couple of years ago we had discussed selling and downsizing, but after we sell what do we buy? I looked into Liberty Hill and everything I looked at put me back into a fairly large mortgage payment for a smaller house. The problem with the current market is that you can make a bunch on your current house but can't replace it for what you make from it. 

 

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1 hour ago, bestbike85 said:

Tell that to the wife who is accepting her dream job in Cedar Park. 

But in all reality, I’m just trying to come up with a game plan. I didn’t want to spend more than a 2-2.25 multiple on our household income, but it’s looking to be more like a 2.5-3 multiple to get anywhere. I hate to stretch like that, but it is the only option if we decide to buy.

Which brings me to another point. All signs point to not buying. This isn’t sustainable, and it seems to be happening everywhere (Dallas, Houston, Lafayette La, etc.). The bubble will pop eventually and things will normalize. I just hope that happens in the next 12-15 months so I can secure something summer 2022. 

If I had been able to see ahead when I lived on Long Island I would have strapped myself and went for a $250K house when I bought my last. Houses that were selling for $250 in '99 when I bought my last house were selling for $750 in '04.

The thing about buying in a sellers market is that you have to be willing to stay in that house for at least ten years to recoup your money. All of these bubbles are typically on a ten year cycle give or take.

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the more I think about the possibility of moving out of Austin, the more insane it sounds. as I described above, we got the friggin deal of the century on our house. family nearby, decent jobs, endless great riding. I can't do anything about the oppressive summer heat, and I don't think I'll ever get used to that. I can't ride more than 90 minutes at a time for half the year. no amount of "acclimating" to effectively living on the Sun and drinking gallons of water an hour can help me with that. the only other thing I hate is my commute: 30 minutes there when I leave before 7 a.m. and 60 minutes on the way home because I am allowed to leave at 4 p.m. all that changed with the pandemic because we'll likely be working from home at least half of the time when that is a safe option again. I could probably look for another job that's closer to home too.

for the reasons discussed here, it seems that most of the people who are making it here in Austin are a) renting and paying out the nose for it, b) up to their eyeballs in debt, c) make a ton of money, or d) bought a long time ago and are clinging to their homes for dear life as property taxes go up and up. I don't mind paying property taxes if I felt like it was going toward better schools for all, transportation solutions that are not idiotic (and effectively a total lack of a useful mass transit option), but i don't feel confident that is what is happening.

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Posted (edited)
12 hours ago, bestbike85 said:

Tell that to the wife who is accepting her dream job in Cedar Park. 

But in all reality, I’m just trying to come up with a game plan. I didn’t want to spend more than a 2-2.25 multiple on our household income, but it’s looking to be more like a 2.5-3 multiple to get anywhere. I hate to stretch like that, but it is the only option if we decide to buy.

Which brings me to another point. All signs point to not buying. This isn’t sustainable, and it seems to be happening everywhere (Dallas, Houston, Lafayette La, etc.). The bubble will pop eventually and things will normalize. I just hope that happens in the next 12-15 months so I can secure something summer 2022. 

I expect this bubble to last 5+ years. Aside from the general demand in Austin, here in Cedar Park we have Dell Children's breaking ground, Bell District breaking ground, and Lakeline Park in late planning stages. Our house in Red Oaks has great conveniences on Cypress Creek Rd, great access via Little Elm to Lakeline and via Bell to the 183A / 45 Tolls, and for me a mile ride to the Brushy Creek trails from my driveway. I'd love to get further out with an acre+ lot, but as you mentioned, there is no longer anything available. We could probably clear $300K on our house but would have to get on a waiting list to pay $700K for something further out that gives us everything we want. I'm not sure who's winning in this situation, other than maybe the folks from CA who view housing here as a bargain. They may be in for surprise though given the much higher property taxes here. 

For now I was able to take advantage of the peak low interest rates, refinancing at 2.5% while drawing out $60K in cash and keeping the term of my loan and my P&I nearly equivalent. Hoping I can squeeze a new Izzo out of those proceeds.     

Edited by throet
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3 minutes ago, throet said:

They may be in for surprise though given the much higher property taxes here. 

No state income tax makes up for it.

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I had a state income tax in NY. It wasn't really that much compared to my property taxes. I think it was around $1500 a year.

My last house there was 1400 sq ft on a 40'x100' lot. in 2004 my property taxes were $5600.

Not much of a bargain considering how poorly kept the roads were. Potholes as big as your tires.

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