Austin housing affordability crisis

[gmr548 16517]

To the wider thread topic, Austin housing is unfixable in the lifetime of most of this board. Been among the leaders in housing production the past decade and still couldn’t keep up with the growth. As a nation or housing policy has been subsidizing suburban land use (even in cities) and anti density for the past 50+ years and undoing that just isn’t going to happen overnight or even within one generation.

[Brisketexan 104628]

7 minutes ago, gmr548 said:

Parental help, saving well into the 30’s (and delaying other milestones like kids), ultra high earner in tech or something like that.

It’s one or a combo of those three for nearly everyone in the first time buyer category, and the middle group has certainly been gut punched the past couple years.

The bolded has certainly come into play for our kids as my dad is tweaking his estate planning.  Their tax bracket will be lower than mine for some time, so he's going to shift over the IRAs to going directly to them, so they can take distributions over 10 years without taking as big a tax hit as I would.  As we will be STRONGLY encouraging them to sock away as much of that as they can, it's occurred to us all that having a good chunk of change in the bank will likely be what will make it possible for them to buy their first home in the next 8-10 years.  Mom and Dad may also chip in some, depending on what our respective financial pictures look like, but that's a luxury not many folks have.  Again, we're well into that top 5% of earners group, and we aren't exactly swimming in extra cash.

Without a kick-start like that, it's tough as hell.

[Foosters 17734]

1 hour ago, Pato del Muerto said:

I don’t know what other metro area to compare it to with these RE prices and only vehicle commutes. 

Southern California.

 

[elfenix 34171]

24 minutes ago, Hookah Horns said:

Seems to me that atx desperately needs new residential development. There's plenty of open space to the east. Those farmers out there are gonna be rich. 

samsung plant gonna make coupland into a full fledged burb

[Fudge Nuggets 19151]

26 minutes ago, Pescado_Rojo said:

I took my daughter out for Vietnamese last Friday. She got a Banh Mi and a bubble tea, I got a vermicelli bowl and a Thai Iced Tea...$45 bucks with tip. In Leander.  

Not sure what you getting completely ripped off has to do with anything, but ok.

[gmr548 16517]

In San Francisco (and most CA cities) there’s aggressive rent control and other tenant protections. You’ll often see stories about people subleasing from some old lady to pay 1980-level rents or packing up three generations in a one-bedroom in the Mission. A high minimum wage sort of helps. Prop 13 severely curtails property taxes, and until two years ago you could incredibly pass on your tax rate with your estate. In other words, SF manages it through market-distorting policies that make then problem worse in the long term. 
 
As to how working class people “do” it? I honestly don’t know - it doesn’t seem worth it to me, but I guess if it’s your home you just deal with it. You get used to paying more, and for homeowners you come to expect a rate of appreciation that justifies putting most of your wealth in your home. It’s that mentality transplanted to Austin that is fueling the craze, IMO. 
 
In defense of Texas, I do think the property tax regime makes sense. Homeowners immediately feel the sting of a rising market, prompting frank discussions over what to do about it (like this thread). Compare that to California, where Prop 13 allows homeowners all of the upsides of appreciation and no downsides, leaving the homeowner class indifferent to housing policy. 

There’s a very clear logical line between California’s property tax system and NIMBYism, absolutely.

Thing is, you see that here in Texas too, because people look out for their own property value and taxation is far from the only thing impacting that. Native Austinites will bitch about affordability along with townhouses/duplexes in Hyde Park in the same sentence. At least in California it’s much harder for working and middle class homeowners to get taxed out of their homes.

Further, it’s difficult to compare the merits of one system to the other in a vacuum; to really get a whole picture you have to think about sales and income tax too. I don’t want to CR (oh wait this is CR)/hijack the thread by turning it into a CA be TX tax debate, because I don’t think it’s germane to the topic, but I’m not sure how fair it is to say that CA’s property tax regime produces significantly worse housing outcomes relative to TX. Frankly both appear to be on very similar trajectories, TX just being where bc CA was 20-30 years ago.

[ChickenSandwich 9798]

26 minutes ago, gmr548 said:

To the wider thread topic, Austin housing is unfixable in the lifetime of most of this board. Been among the leaders in housing production the past decade and still couldn’t keep up with the growth. As a nation or housing policy has been subsidizing suburban land use (even in cities) and anti density for the past 50+ years and undoing that just isn’t going to happen overnight or even within one generation.

Up zoning has no record of ever providing affordable housing.  Land is cheap, sprawl is only answer that makes sense, as dense housing in urban areas is still incredibly expensive, and cheap land still exists.  See Los Angeles trying to build apartments for the homeless.  Over $750 K per unit/person, more than the median home price (at the time).  Working from home should have helped to make this path even more clear as the way forward, density is not needed.   It would require cities giving up the voting power of density they currently enjoy in most states.

 

Blanket Upzoning—A Blunt Instrument—Won't Solve the Affordable Housing Crisis | The Planning Report

Upzoning Chicago: Impacts of A Zoning Reform On Property Values and Housing Construction | PDF | Zoning | Probability Distribution (scribd.com)

$750,000 for homeless housing? Taxpayers will remember that - Los Angeles Times (latimes.com)

 

Edited April 18, 2022 by ChickenSandwich

[Ojo Rojo 1906]

Similar things happening in Houston. I was talking to someone yesterday who just got $90K over their asking price in West Houston/Energy Corridor. They had 22 offers. My SIL works for a homebuilder and she said they were doing the no guarantees contracts as someone mentioned upthread. She also said there is talk about a 40-year mortgage product coming online. All of this craziness feels like a bubble. There is an unusual mix of market factors right now. Inflation is driving interest rates up and I have to think many buyers are rushing to get into something before rates go higher, though demand was super high before rates ticked up. Supposedly there are supply and labor shortages that are attributed to a variety of factors - trucking strikes in Canada, weather, fires. I say this because I'm not so sure those factors really exist or that they are truly having the effects we are seeing on prices.  I think people in business see an excuse to raise prices and they do because they can. Just my theory.

It all makes for an interesting policy discussion. My question is, what is defined as affordable housing? Is it only limited to home ownership? And what is the downside of having no affordable housing, however it is defined? People are forced to rent?  Forced to move further out? Commute longer? Are those things really that bad? I don't believe it is a choice between affordable housing and homelessness.

[We’reTexas 1469]

50 minutes ago, gmr548 said:

 but I’m not sure how fair it is to say that CA’s property tax regime produces significantly worse housing outcomes relative to TX. Frankly both appear to be on very similar trajectories, TX just being where bc CA was 20-30 years ago.

Oh for sure, I wasn’t trying to go that far but rather make the point that Texans feel the market forces more immediately and, in theory, should respond accordingly. Everyone wants their property values to increase, but when hit with a 10% increase year after year you’d think folks would support measures that would temper the climb a bit. When limited to 1%, not so much. 

[PenelopeWitherspoon 19092]

23 minutes ago, Ojo Rojo said:

Similar things happening in Houston. I was talking to someone yesterday who just got $90K over their asking price in West Houston/Energy Corridor. They had 22 offers. My SIL works for a homebuilder and she said they were doing the no guarantees contracts as someone mentioned upthread. She also said there is talk about a 40-year mortgage product coming online. All of this craziness feels like a bubble. There is an unusual mix of market factors right now. Inflation is driving interest rates up and I have to think many buyers are rushing to get into something before rates go higher, though demand was super high before rates ticked up. Supposedly there are supply and labor shortages that are attributed to a variety of factors - trucking strikes in Canada, weather, fires. I say this because I'm not so sure those factors really exist or that they are truly having the effects we are seeing on prices.  I think people in business see an excuse to raise prices and they do because they can. Just my theory.

It all makes for an interesting policy discussion. My question is, what is defined as affordable housing? Is it only limited to home ownership? And what is the downside of having no affordable housing, however it is defined? People are forced to rent?  Forced to move further out? Commute longer? Are those things really that bad? I don't believe it is a choice between affordable housing and homelessness.

I can speak from a NYC lens.  A lot of folks left NYC for more space/cheaper housing.  So, while the city has 8.5M people in the city limits, the TriState Area is more like 25M.  There have been, historically, a ton of people from Jersey and CT that commute into the city.  Those folks are no longer commuting daily as offices still are not back 100% (nor will they come back based on what I am hearing).  If people lived closer and had a shorter commute, I think it would be easier to get them back in the office at least 3-4 days a week.  As it stands, thanks to what has been happening in NYC over the last 30 years, I would estimate most people would come into the city 3 times a week max, which really hurts a lot of business here.  

 

[6th Street 6357]

3 hours ago, gsoda3 said:

that's the point.  you've got a crisis when the cheap homes in the suburbs are half a million dollars.  

Still a great value. National median home price is $405K. Add in no state income tax and a desirable Central Texas location, Austin is still a great value relative to most metro areas like Chicago, Bay Area, Northern VA, Seattle, Portland, Denver, etc. 

[NameAlreadyInUse 5106]

6 minutes ago, 6th Street said:

Still a great value. National median home price is $405K. Add in no state income tax and a desirable Central Texas location, Austin is still a great value relative to most metro areas like Chicago, Bay Area, Northern VA, Seattle, Portland, Denver, etc. 

I think the point of this topic being started is that we liked it better when it was a great value, full stop.  Yes, we are still cheaper than most of those places you mentioned, but it's less true every day.

[gmr548 16517]

Up zoning has no record of ever providing affordable housing.  Land is cheap, sprawl is only answer that makes sense, as dense housing in urban areas is still incredibly expensive, and cheap land still exists.  See Los Angeles trying to build apartments for the homeless.  Over $750 K per unit/person, more than the median home price (at the time).  Working from home should have helped to make this path even more clear as the way forward, density is not needed.   It would require cities giving up the voting power of density they currently enjoy in most states.
 
Blanket Upzoning—A Blunt Instrument—Won't Solve the Affordable Housing Crisis | The Planning Report
Upzoning Chicago: Impacts of A Zoning Reform On Property Values and Housing Construction | PDF | Zoning | Probability Distribution (scribd.com)
$750,000 for homeless housing? Taxpayers will remember that - Los Angeles Times (latimes.com)
 

I mean, did you read my post? No, at this point upzoning in a given city isn’t going to have a significant sort to medium term impact. We’ve been building in a specific pattern for all of our lives, and that is baked into everything from land use policy to home buyer expectations. Sprawl has a ton of indirect costs and negative externalities that make it incredibly inefficient beyond simply the cost of housing, which we also know it’s failed Austin on, but again that’s not really what this thread is about.

The cat is out of the bag in Austin. It’s going to be an exorbitantly high housing cost market absent either the waning of the power of the tech sector in the economy or a massive state/federal investment in housing production. That’s it. The ship has sailed. It’s already one of if not the least affordable markets relative to local income, certainly outside CA, and it will be a peer of coastal cities within a few years.

[jimmyjazz 45560]

11 minutes ago, 6th Street said:

Still a great value. National median home price is $405K. Add in no state income tax and a desirable Central Texas location, Austin is still a great value relative to most metro areas like Chicago, Bay Area, Northern VA, Seattle, Portland, Denver, etc. 

Until you account for property tax rate, you don't get to hand-wave away the lack of state income tax.  I just checked Chicago -- property tax is 1.3%, more than a full point below Austin.  So, on a $500K home, that's an extra $5500 or so in property tax.  What's the state income tax for a typical homeowner in Illinois?

[PenelopeWitherspoon 19092]

This isn't a great graph.  It definitely isn't linear.

https://fred.stlouisfed.org/series/MSPUS

 

[jimmyjazz 45560]

6 minutes ago, PenelopeWitherspoon said:

This isn't a great graph.  It definitely isn't linear.

https://fred.stlouisfed.org/series/MSPUS

 

It's still only 5.5% appreciation per year.

[PenelopeWitherspoon 19092]

Just now, jimmyjazz said:

It's still only 5.5% appreciation per year.

Look at real wages since about 2013.

https://www.bls.gov/news.release/pdf/wkyeng.pdf

[jimmyjazz 45560]

Oh, I'm not arguing wages have kept up, but as the #1 source of "wealth" building in the US, we should at least acknowledge the value in home appreciation . . . for homeowners. 

Getting new homeowners into the market is the tough part.

[Pato del Muerto 52342]

59 minutes ago, Ojo Rojo said:

Similar things happening in Houston. I was talking to someone yesterday who just got $90K over their asking price in West Houston/Energy Corridor. They had 22 offers. My SIL works for a homebuilder and she said they were doing the no guarantees contracts as someone mentioned upthread. She also said there is talk about a 40-year mortgage product coming online. All of this craziness feels like a bubble. There is an unusual mix of market factors right now. Inflation is driving interest rates up and I have to think many buyers are rushing to get into something before rates go higher, though demand was super high before rates ticked up. Supposedly there are supply and labor shortages that are attributed to a variety of factors - trucking strikes in Canada, weather, fires. I say this because I'm not so sure those factors really exist or that they are truly having the effects we are seeing on prices.  I think people in business see an excuse to raise prices and they do because they can. Just my theory.

It all makes for an interesting policy discussion. My question is, what is defined as affordable housing? Is it only limited to home ownership? And what is the downside of having no affordable housing, however it is defined? People are forced to rent?  Forced to move further out? Commute longer? Are those things really that bad? I don't believe it is a choice between affordable housing and homelessness.

The CA value climb of the aughts is what drove “creative” mortgage products like interest only and negative amortization or “pick-a-pay” along with lower underwriting barriers and stated loan and/or asset vehicles where a little fudging on the numbers was wink wink expected, to get people into homes. 
 

the lending risk just isn’t there when values go up 20-100% year after year- until they don’t and people walk away and lenders end up with a pile of real estate that they don’t want and have to spend money to sell much cheaper than they were owed.  
 

which was a bigger deal as those products made their way throughout the country, as originators and lenders saw how many more people could qualify for these types of vehicles. Coupled with several presidential administrations preaching about home ownership being the American dream that should be within reach for everyone. 
 

so let’s hope THAT doesn’t happen again. 

[elfenix 34171]

1 hour ago, ChickenSandwich said:

 It would require cities giving up the voting power of density they currently enjoy in most states.

what does this even mean

[Homercles 10205]

We are one of the lucky ones…2012 built in Cedar Park a 3,300ft 4/4 home with a 3 car and corner lot for $355k.  Probably could sell for 2.5x that easily now.  No idea how the hell these homes are currently selling up here or anywhere for that matter, based on my neighborhood demographics it’s primarily Indian/Asian tech folks bringing their families lately. 
 

Legit question…all those huge condo buildings going up downtown the last 15 years have outpaced demand that significantly?  Are they occupied by residents, owned by speculators, too luxurious/large to be efficient?  
 

it’s insane to see how much Rainey and the skyline has changed since I moved here in 2002 but I guess the size of the demand really hits home when all those huge towers aren’t nearly enough…just curious who moved into all those units.  
 

And yeah the NIMBY types in Hyde Park, Westlake, etc are a part of the problem if they won’t let multi family expand beyond downtown itself. 

Edited April 18, 2022 by Homercles

[Zepol87 9171]

A house across the street from me in my not fancy north DFW burb was listed to rent for 2,950. 3/2 nothing special at all, I laughed when I looked up the rental listing thinking no fucking way this will rent. Well it only took 2 weeks, moving truck was there yesterday. I just don't understand how this is possible

[6th Street 6357]

2 hours ago, jimmyjazz said:

Until you account for property tax rate, you don't get to hand-wave away the lack of state income tax.  I just checked Chicago -- property tax is 1.3%, more than a full point below Austin.  So, on a $500K home, that's an extra $5500 or so in property tax.  What's the state income tax for a typical homeowner in Illinois?

Those numbers are not correct. In most Chicago suburbs you're paying $17-18k or so on a $750k house + 5% state income tax. So Austin and Houston still come our way ahead 

[staboner 4959]

its a worldwide crisis, not just an Austin one

looking at you boomers. why you refuse to live through another downturn and invent this new managed economy?  just infuriating to see a society just living one second out in front of their small view. 

i live in one of the world's most expensive cities now. the other day roma tomatoes were $14/kg at our version of HEB. i fucking snortled through my mask and probably gave myself reverse covid 3.0 in the process. roma tomatoes. the fucking houston cougars of tomatoes. 

and you think this is bad? with Russia/Ukraine war we are hyperfucked for at least 2 more years with food and energy prices. there will be lots of starving around the world and lots of economic correction to absorb. 

[Chewbacca 7730]

6 hours ago, Pato del Muerto said:

I don’t know what other metro area to compare it to with these RE prices and only vehicle commutes. 

Denver is a pretty good comp.  We do have light rail, but it's not super convenient for a whole lot of people.

[jimmyjazz 45560]

12 minutes ago, 6th Street said:

Those numbers are not correct. In most Chicago suburbs you're paying $17-18k or so on a $750k house + 5% state income tax. So Austin and Houston still come our way ahead 

You're right, that must have just been city taxes.  I looked up state rankings and Illinois was 2nd highest (behind New Jersey) and Texas was 7th highest, still ahead of NY, Massachusetts, and way ahead of California and North Carolina.

[Chewbacca 7730]

5 hours ago, Brisketexan said:

The bolded has certainly come into play for our kids as my dad is tweaking his estate planning.  Their tax bracket will be lower than mine for some time, so he's going to shift over the IRAs to going directly to them, so they can take distributions over 10 years without taking as big a tax hit as I would.  As we will be STRONGLY encouraging them to sock away as much of that as they can, it's occurred to us all that having a good chunk of change in the bank will likely be what will make it possible for them to buy their first home in the next 8-10 years.  Mom and Dad may also chip in some, depending on what our respective financial pictures look like, but that's a luxury not many folks have.  Again, we're well into that top 5% of earners group, and we aren't exactly swimming in extra cash.

Without a kick-start like that, it's tough as hell.

I've thought about this a lot and this is where we are, too.  We're going to have to help our kids buy a house because the market is so fucked up.  I'm actually hoping for a big housing correction (even though it would hurt me) because people are just getting killed with housing costs.  We have been going through a similar run up to Austin the past couple of years.  It's completely unsustainable.

[cactusflinthead 27594]

1 hour ago, Zepol87 said:

A house across the street from me in my not fancy north DFW burb was listed to rent for 2,950. 3/2 nothing special at all, I laughed when I looked up the rental listing thinking no fucking way this will rent. Well it only took 2 weeks, moving truck was there yesterday. I just don't understand how this is possible

When I moved back to DFW the rent on an ok but not great 2-2 apartment in Grapevine was 850 in 2014. It is almost double that now.

It's demand. We continue to add more people than housing. Older apartments are getting new names and a fresh coat of paint instead of being bulldozed and starting over because they stay full. Everywhere you look they are building and it's still not enough.

[Zepol87 9171]

^^ Yep some of the shitty apartments in East Dallas just painted a mural on the outside and rebranded and doubled rent. I am close to Aubrey and got a youtube ad the other day for a 1/1 that is newly built off 380 starting at 1580, it is fucking insane. I didn't even pay that much for a 2/1 next to the Galleria 3 years ago. It is fucking crazy

[fattyflattie 4636]

4 hours ago, Ojo Rojo said:

Similar things happening in Houston. I was talking to someone yesterday who just got $90K over their asking price in West Houston/Energy Corridor. They had 22 offers.

Correct. Had 2 go down my street in last few weeks. Both sold for ~300k more than I’d pay, both on market under 3 days.  And I’m another 15+ miles west of the energy corridor (think many, many more aggys). Sucks as we were only about 18 months away from being able to take a large step up ourselves.  That rug has been pulled as I’m not mentally ready for the 7 figure game. 

[Aqua Buddha 14521]

1.  Supply and Demand.  Millenials have come to market and the Z's are on their way.  We've vastly under built housing since 2008.

2.  Any place worth a shit has the same problem Austin does.

3.  No city worth a shit has managed this well.  Every option has been tried.  It can't be a great but cheap city.

4.  The demand side of the equation needs to shift to what type of housing we want.  Believe it or not, a family of four can live in a 3 bedroom attached dwelling.  We all don't need detached housing with yards, especially with kids playing video games all day.

5.  I can write a Phd level thesis tying land use policies to every social ill we have.

6.  The big corporate money are the ones buying up the entry level houses.  It's not buyers.  This will result in a generation of renters that will little to no net worth in their 50's.  

[cactusflinthead 27594]

17 minutes ago, Zepol87 said:

painted a mural on the outside and rebranded and doubled rent.

All over town. Places that used to be considered rundown and sketchy are getting filled.

[Sawbonz 27436]

4 hours ago, jimmyjazz said:

Until you account for property tax rate, you don't get to hand-wave away the lack of state income tax.  I just checked Chicago -- property tax is 1.3%, more than a full point below Austin.  So, on a $500K home, that's an extra $5500 or so in property tax.  What's the state income tax for a typical homeowner in Illinois?

Texas having no income tax is only a good deal for people with high incomes who choose an inexpensive home

[DanRydell 799]

I think moving forward…  on top of increasing inventory, there needs to be a realization and acceptance that a typical family can still live comfortably with less sq ftg. I know that’s a hard bias even for me to shake off, due to what a lot of us were used to growing up here in Texas. 

This is a component of the housing crisis that doesn’t really get talked about. While populations have exploded and household sizes have shrunk, house size and lot size have also shot up. I’d bet the square footage of housing per resident in the Austin area today is 4x what it was 50 years ago.

[Neonmoon 38127]

I’m in lending. We have been underbuilding by millions of homes since the Great Recession and Millenials are entering their prime home buying years. There are a crap ton more millennials than Gen X, and boomer are living longer. Supply and demand. 

We fucked around in home building. We are in the finding out phase 

[Bookman 4611]

This is Texas. Let them live in trailers.

[Surly Bevo 24696]

The whole work from home don't have to commute thing may also have a "when the music stopped" effect on some portion of inventory that would normally be in play. Somebody in a starter or second home moved out to move up (ie take that bigger job in another city). Now you may not have to move with remote working if you really like where you got in. Moving is a pain in the ass anyway....especially the longer one spends in a single location and accumulates "stuff".   Couple that with the ever shrinking family size and there isn't the motivation to leave like there once was.  Except the country....everybody wants to leave the country and come to the city.  Another piece of the problem....rural living ain't what it used to be and every year from jobs to quality of life, etc etc it gets worse and worse and more people leave to come to the big city.

Edited April 19, 2022 by Surly Bevo

[jimmyjazz 45560]

I eagerly await my move to the exurbs so I have a shorter drive to Home Depot and Applebees.

[bluto 4894]

2 hours ago, DanRydell said:

This is a component of the housing crisis that doesn’t really get talked about. While populations have exploded and household sizes have shrunk, house size and lot size have also shot up. I’d bet the square footage of housing per resident in the Austin area today is 4x what it was 50 years ago.

Lot sizes have shot up?? Where the hell is that the case?  

[CooterBrown 17913]

I’m in lending. We have been underbuilding by millions of homes since the Great Recession and Millenials are entering their prime home buying years. There are a crap ton more millennials than Gen X, and boomer are living longer. Supply and demand. 
We fucked around in home building. We are in the finding out phase 

It’ll just get worse. There’s a home going up near me that’s being built by a well established builder. If finished today, it’d sell for around $1.5M. However, a week ago work stopped. Today a worker showed up and boarded up the windows. A buddy talked to him and he said there’s a 6-8 month delay in getting windows so they’re just stopping work until then. Normally they build these houses in 4-6 months. Now it’ll drag out for over a year. We really aren’t going to keep up with demand for the next 10+ years if we can’t even build what’s already planned.

[6th Street 6357]

Mortgage rates have now eclipsed 5% which should drive some stabilization both from a buyer and seller perspective. This is from Redfin this AM:

"We expect the combination of surging mortgage rates and record-high home prices to cause more homebuyers to drop out of the market. Unfortunately, homeowners are turning their back on the market too. Instead of being motivated to list before prices weaken, potential home sellers may be choosing to wait-out the impending market cooldown.”

 

https://investors.redfin.com/news-events/press-releases/detail/703/redfin-reports-home-sales-fell-4-in-march-as-buying-costs

[Upgrayedd 5806]

27 minutes ago, CooterBrown said:

It’ll just get worse. There’s a home going up near me that’s being built by a well established builder. If finished today, it’d sell for around $1.5M. However, a week ago work stopped. Today a worker showed up and boarded up the windows. A buddy talked to him and he said there’s a 6-8 month delay in getting windows so they’re just stopping work until then. Normally they build these houses in 4-6 months. Now it’ll drag out for over a year. We really aren’t going to keep up with demand for the next 10+ years if we can’t even build what’s already planned.

Resin shortage.  From not being able to keep power on somewhere during a cold snap.

[Johnny Sack 8397]

19 hours ago, YChang said:

I think moving forward…  on top of increasing inventory, there needs to be a realization and acceptance that a typical family can still live comfortably with less sq ftg. I know that’s a hard bias even for me to shake off, due to what a lot of us were used to growing up here in Texas. 

But if you're building new, square footage still drives price.  You have a lot that is worth $750k.  You need to build a two story that is 4k feet instead of a one story that is 2k feet.

[Johnny Sack 8397]

17 hours ago, Ojo Rojo said:

Similar things happening in Houston. I was talking to someone yesterday who just got $90K over their asking price in West Houston/Energy Corridor. They had 22 offers. My SIL works for a homebuilder and she said they were doing the no guarantees contracts as someone mentioned upthread. She also said there is talk about a 40-year mortgage product coming online. All of this craziness feels like a bubble. There is an unusual mix of market factors right now. Inflation is driving interest rates up and I have to think many buyers are rushing to get into something before rates go higher, though demand was super high before rates ticked up. Supposedly there are supply and labor shortages that are attributed to a variety of factors - trucking strikes in Canada, weather, fires. I say this because I'm not so sure those factors really exist or that they are truly having the effects we are seeing on prices.  I think people in business see an excuse to raise prices and they do because they can. Just my theory.

It all makes for an interesting policy discussion. My question is, what is defined as affordable housing? Is it only limited to home ownership? And what is the downside of having no affordable housing, however it is defined? People are forced to rent?  Forced to move further out? Commute longer? Are those things really that bad? I don't believe it is a choice between affordable housing and homelessness.

Put in a cash offer on a home a few weeks ago in West U.  5% over list.  The winner went 20% over list.

[SydneyCarton 47884]

20 hours ago, tx 3 putt said:

I’ve always like the Johnson City area for possible retirement. The time to buy was 6 months when interest rates were killer. 5-8 years ago. FIFY.

i need to do more research, look for something now

FIFY. I've been looking at property in Johnson City for 3-5 years now. In another 10-15 years, it's going to be the next WImberley/Dripping Springs. And much of the prime real estate (Views, Water access, etc) has been snatched up and already appreciated accordingly.

Not to overly CR this up further, but my wife's dad has some land near Bellville that will pass to her and her sister. It's ugly land, but it's land. My Brother In Law wants to invest in it and fix it up, make it working land, etc. And I keep coming back to the idea that even though god isn't making any more land, how valuable will much of the land in Texas be if climate change makes living in Texas wildly expensive from an A/C perspective and very difficult to support farming and ranching because of costs of water and fertilizer? What will these land and home values all turn into then, by say 2050? I realize that's the long game, not the short term crisis of the next 10-15 years for cities like Austin. But for a lot of folks literally pouring every dollar they have into a home in this area, man, that could be a hell of a speed bump for them.  

[Johnny Sack 8397]

17 hours ago, jimmyjazz said:

Until you account for property tax rate, you don't get to hand-wave away the lack of state income tax.  I just checked Chicago -- property tax is 1.3%, more than a full point below Austin.  So, on a $500K home, that's an extra $5500 or so in property tax.  What's the state income tax for a typical homeowner in Illinois?

Illinois residents pay 9.7% of their income in state and local taxes.

Texas residents pay 8.22% of their income in state and local taxes.

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494

[Johnny Sack 8397]

14 hours ago, jimmyjazz said:

You're right, that must have just been city taxes.  I looked up state rankings and Illinois was 2nd highest (behind New Jersey) and Texas was 7th highest, still ahead of NY, Massachusetts, and way ahead of California and North Carolina.

Total tax burden for state and local taxes in Texas -- we are ranked 32nd.

NY is #1.  Cali and Illinois are 9 and 10.

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494

 

[The Dog 43807]

17 hours ago, PenelopeWitherspoon said:

This isn't a great graph.  It definitely isn't linear.

https://fred.stlouisfed.org/series/MSPUS

 

The St Louis FRED is a great resource.

The best explanation for the current situation is the housing starts - never recovered after 2008 and was historically low for YEARS: https://fred.stlouisfed.org/series/HOUST

Things didn't start picking up until right before COVID, then things shut down again. Add on top of that supply chain issues and now increased demand due to demographics (millennials and others wanting to start families/buy a house). 

12 hours ago, Neonmoon said:

I’m in lending. We have been underbuilding by millions of homes since the Great Recession and Millenials are entering their prime home buying years. There are a crap ton more millennials than Gen X, and boomer are living longer. Supply and demand. 

We fucked around in home building. We are in the finding out phase 

Saw this after I started my post. I'd add that it's not just that the silent generation/boomers are living longer - they are still occupying homes that these millennials could buy and update.  

So yeah - a very long time of not building enough homes, demographics, and supply chain issues to address the lack of inventory are all working together to push home prices/values sky high. 

[SydneyCarton 47884]

10 hours ago, bluto said:

Lot sizes have shot up?? Where the hell is that the case?  

Well, the entire city of Katy, TX was predicated on larger houses on bigger lots...

In a city proper? Sure, it's all one lot now supports 2-4 townhomes. But in every 'burb to a major city, every NEW community? Yards and lots I wager. 

[BrazilHorn 6576]

Westlake & Lake Travis will lead the charge once they realize that Del Valle, Dripping, Johnson etc will in ~10 years start beating them with the 1M kids that will be there.

(kind of joking here)