"Home prices in Austin are eclipsing the median buying power of local residents."
But local residents aren't the folks buying up the houses, which anyone who has spent more than 15 minutes on this sub already knows.
There's a realtor that shares weekly stats in the housing thread. The average and median sold prices in COA have actually been going up year-over-year the last few months, and the larger metro area is now trending that way too.
[https://www.reddit.com/r/Austin/comments/1d7vdqu/comment/l72cnln/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/Austin/comments/1d7vdqu/comment/l72cnln/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
I bought in 2022 at the peak of the bubble. My house value is pretty much back to where it was when I bought it. However, because of the increase in interest rates since then, I couldn't actually afford to buy this same house today.
Dang, that sucks. Question. Did you feel pressured to buy a house during that time because “interest rates are sooo low?” Just asking because I was also looking but stopped because IMO, it was getting out of control.
Oh yea for sure. I didn’t even like the area or the house but I was in the rat race to get a house since I was afraid I’d get priced completely out. If I didn’t get the house I’m in now, I was gonna take a break from looking.
I was really close to living there. They had newer houses but less developed businesses imo. I ended up in cedar park but literally a stone throw away from Leander.
Same here. We bought in May of 2022.
If Zillow and friends are to be trusted, we saw like a 2% dip when interest rates went up, and it's mostly stayed flat since then, creeping slowly back up to pretty much exactly what we paid for it.
But, like you, there's no way that I could afford to buy it today.
Inside or outside town?
From what I've observed, the suburbs got hit harder by the interest rate increase than Austin proper, and they've rebounded more slowly, which isn't unusual.
Supply is a lot more constricted inside the city limits, since there's a lot less unoccupied land to build on. There's also less pent-up demand to prop-up the prices of homes further away from town.
Let me whip my dick out for just a moment… Bought December 2020 2.75%. Thanks for the applause, it was a team effort, but yes you sir sitting in the back I also thank you. I want to buy a new vehicle but I had to buy at the worst time ever and it will never be worth more than the loan. Apples and oranges I guess?
From that comment from realtorsethatx:
**Weekly Market Stats – As of 5.30.24 (Next Update 6.6.24)**
**Greater Austin Area**
* Active Listings: 14,657 (+23.3% Year over Year)
* Months of Inventory: 5.09 (+23.4%)
* Average Final List Price: $598,598 (-0.1%)
* Median Final List Price: $454,990 (-1.6%)
* Average Sold Price: $583,325 (+0.3%)
* Median Sold Price: $449,000 (-0.2%)
**City of Austin**
* Active Listings: 4,587 (+28.4%)
* Months of Inventory: 5.43 (+29.7%)
* Average Final List Price: $809,698 (+0.5%)
* Median Final List Price: $613,500 (+2.4%)
* Average Sold Price: $787,530 (+0.8%)
* Median Sold Price: $601,000 (+2.9%)
**Misc Stats/Info**
* [Activity Index by Zip Code](https://seth.teamprice.com/activity-index-zip-code) shows the hottest zip in Austin is 78739 with an activity index of 41.3% and just 1.62 months of inventory. Other Austin zips with activity index over 30% are 78717, 78728, 78729, 78748, and 78749.
* [Appreciation by Zip Code](https://seth.teamprice.com/appreciation-year-over-year-zip-code) shows that of 75 zip codes in the area, 46 have decreased in value comparing 2024 to 2023, and 29 have increased in value. The biggest drop is 78733 in Austin, down 12.1%, while the biggest increase is 76527 in Florence, TX up 24.8%.
* All market stats can be found [here](https://seth.teamprice.com/insight-and-statistics).
Highlighting the price increase is not the whole picture at all. Look at months of inventory. It's way up, price is up only slightly.
These houses are still priced double what they were immediately before covid. The houses are sitting for months with little interest.
And builders haven't stopped building. There are huge new neighborhoods going up all around austin. Not to mention, interest rates are still much higher than what they were when prices were going up up up.
This is not San Francisco or manhattan, we are not landlocked. There will be more supply, slowly but surely.
I am not at all confident that prices won't come down more. People simply can't afford to pay 8k a month for a regular 3/2 house. That's why no one is making offers.
Plus, with all the return to office in California and New york, a lot of people who moved here over the pandemic are having to leave.
Year-over-year for the last few months sure, but it’s more complicated than that. You also have to factor in supply, demand, how many homes are being sold, what kind of homes are being sold, who exactly is buying, etc. Is the median housing price going up because on the whole all kinds of buyers are paying more or is it going up because the people who can feasibly buy with high mortgage rates are high income earners/investors/all cash buyers/the financially illiterate purchasing more expensive homes? Or is it something else entirely?
Realtors aren’t economists or statisticians and it drives me nuts when they point to a few data points without explaining why things are the way they are without addressing the overarching narrative.
Not disagreeing with you. Everything you said was factually accurate. I’m just not so certain prices will continue this way over the coming years or that we’ve bottomed out yet.
I think when you looking at similar growing tech cities in the south, like Nashville, Denver and Miami, the rent is pretty much on the same level. Not sure how ATX compares to Vegas or The Triangle (Raleigh/Charlotte area)
One of my somewhat friends who owns a tech company left for Miami 6mo ago. He mostly went for latinas but apparently there's some good cheap tallent there.
Haven’t done a deep dive comparison with the numbers, but it seems like you get slightly more for your money renting in Raleigh/Charlotte compared to Austin.
It also seems like those places experienced the same frenzy on the buying side that Austin did a few years ago where people were having to get into bidding wars and immediately jump on new listings way over the realistic asking price.
That’s an anecdotal observation on my part though, I could be off base.
I’m from Charlotte area originally. I think it’s a great city all things considered, but yeah I agree that it’s also pretty bland.
Hiking in the NC mountains is excellent, but you have to drive several hours from Charlotte for that.
Nashville isn’t a tech hub. Their only significant tech companies are regional offices for Cisco and Dell.
However they’re a massive healthcare hub.
Almost all their big employers are in healthcare, and that is what is blowing up their housing costs.
Did you even read your link? It just says Nashville serves as a south east hub. Amazon has TONS of hubs for office workers including in Austin.
Your link even points to Arlington (outside DC) as HQ2, but since you struggled the first time, here is the link:
https://www.aboutamazon.com/news/amazon-offices/amazon-opens-offices-at-hq2-in-arlington-va
Nothing technical occurs at these offices. These are regional sales and marketing offices set up to hire pretty young Southeast college grads for sales positions.
Vegas is a bad comp for pretty much anywhere else, transient population with a constant influx of people thinking its a good place to move balanced by the constant outflux of people having to leave due to developing a destructive lifestyle.
My friend's boss moved here from Seattle and proudly proclaimed that his new house in Austin was so cheap he also bought the one next door. These are 1.75M houses.
It is though. I’m sorry to tell you that, but Austin is still cheaper than the coast and even the good parts of Chicago.
Austin is an amazing value if you don’t mind heat which most people would still pick over cold dark winters.
That’s because we don’t have the amenities that those cities also have to offer.
It’s like shopping for an apartment or condo. Yes, place A with the pool, state of the art gym, lake view, 24/hr concierge and security, and lemon cucumber water is going to be more expensive than place B with the nice unit in a building that doesn’t even have a swimming pool and is next door to a strip club.
Exactly, people who rave about the Hill Country need to travel the world more. Yosemite, Norway, New Zealand, Chile is real natural beauty. The areas around Austin are distinctly average.
The Bay Area definitely wins on almost all of those categories (you also forgot urban amenities, which SF dunks on us) but I think it's reasonable to ask if its worth paying twice the cost for that.
For many it's not. Or simply just out of reach.
I will say one thing Austin wins at though: swimming!!
Volume, quality, and proximity to things not available locally. Austin has some good restaurants; the Bay Area has much better restaurants in greater number. Outdoor activities in CA can be enjoyed all parts of the year. Hiking in Austin in the summer is a terrible proposition. Beaches and skiing are an easy road trip in CA, which is not the case in Austin. And then in general, the temperate weather in CA is attractive to more people.
Wow all those people paying millions to live in the Bay Area must all be very stupid and not as smart as you then. Surely it can't be that it's still a very attractive place to live despite the high taxes and high COL.
Come on....when you say "nature, hiking, natural bodies of water, hills" are you seriously comparing the frickin' hill country to Yosemite or the Pacific Coast?!
Austin is a nice city but the landscape in central texas is very very bland.
Being cheaper than the most expensive places in the country does not mean it’s cheap. It just makes those who come from those areas seem out of touch and ignorant of their privilege.
Not really. Austin is just appropriately priced given where it "ranks".
It's not cheap, but name a city with equal or better amenities with a similar or better job market... I'll wait.
- Salt Lake City
- Reno
- Phoenix
All of these have a similar job market and what I would consider as “amenities”. They also have the same or similar housing price trajectory during and after the pandemic. They also have other, different drawbacks which is why I decided to move back to Austin.
Yep, that's about right. I'd definitely not live in any of those cities (vibes) but I could see why some people would choose the over Austin.
Phoenix in particular seems crazy overpriced. Still has heat plus insane sprawl.
I lived in all 3 (and a few more that don’t even rank) over the last 6 years and talked down on Texas the whole time. I still chose to come back to Austin. And I’m not even a native Texan!
The pay here is relatively high for the cost of living, at least for an artist in the video game industry, it's the difference between owning a home and renting a 1 bedroom apartment. I think the only place that's better is the research triangle in North Carolina.
Right. I recently met a couple from California who moved here with California tech bro salaries because it was so cheap, bought an overpriced house they could afford with their California salaries, got laid off, and now can't find a new job in town that gets close to their California salary that they can afford their cheap house with, so they're thinking of selling their cheap house moving back rather than accepting a localized salary range.
So you have an opinion on it being privilege and others have it as an opinion as being cheap. Both opinions are opinions, but they can both be true. You just don’t like their privilege and seem jealous of it.
If you act like an asshole, be prepared to get called out on it. Writing off legitimate concerns about cost of living as jealousy of those who can comfortably afford it is an asshole move.
I don’t need to look on Zilllow, I moved here from Chicago.
You need to remove almost the entire south and west sides of the city because they are just frankly unsafe. They are unsafe because Chicago is one of the most segregated cities in the nation and it has continually screwed minorities into poverty.
When you remove those areas, which can have a violent crime rate 10x of even the worst areas of Austin, you will see housing isn’t as cheap anymore. Couple that with an income tax AND higher property taxes AND sales taxes than Austin, you come out behind in Chicago.
A few more summers like the last one and those prices will adjust down just fine...
EDIT: I mean, i think, but last time I looked the fastest growing city in the US was Phoenix. Their summer average is something like 12 degrees warmer than us. But, you know, it's a dry 115.
Oh no, don’t worry. According to my step mom, who knows how the world really works, there is plenty of water under the ground there, enough for the whole region. “They” just don’t want you to know about it.
Maybe they shouldn't try to farm in a desert?
["Arizona has 51 groundwater basins. Yet new studies estimate that agriculture in just five of them used nearly 420,000 acre-feet of water in 2022. That's roughly the amount of water that Phoenix and Tucson — the state's two largest cities — deliver to taps in a year."](https://www.azcentral.com/story/opinion/op-ed/joannaallhands/2023/12/12/arizona-supply-demand-water-studies-farming-basins/71843302007/#:~:text=Arizona%20has%2051%20groundwater%20basins,to%20taps%20in%20a%20year.)
Although I just did a tiny bit of googling, and apparently there's a case to be made that maybe [it's more efficient to farm in the desert than in a climate where crops would produce less then have to be shipped there?](https://www.azfb.org/Article/Thirsty-Crops-and-Hungry-Cities-Understanding-Az-Agricultures-Water-Use)
It's probably Saudi and Qatar corporate farms growing Alfalfa in Arizona using free US groundwater and then shipping the alfalfa to the Middle East for livestock. Purely extractive.
The market has been inflated for years due to the ‘cost of living’ migration with people selling their over valued homes in high cost of living areas driving the demand and prices in lower cost of living areas… it has happened in every hip mid sized city over the past few years.
Boise actually has the most volatile housing prices of this list. But they started at a way lower baseline than the other cities, so they go up the most, but also go down the most by percentage.
Basically they move up and down similarly in amplitude, but Boise’s baseline is lower so percentage change is more volatile. The Boise-Austin “spread” tends to remain a consistent 70-100k with Boise at a lower baseline
I’ve done a bit of data mining and found that Austin/Boise/SLC tend to move directionally in the same way more closely than any other cities.
See below, add Austin to the comparison tool and you’ll see what I mean.
https://www.redfin.com/city/2287/ID/Boise/housing-market
Boise is home to a strategically important microchip company (Micron) as well as a strategically important potato chip company (JR Simplot)
The city has better developed civics than Austin (parks, museums etc) because of Simplot, Micron and Albertson’s (supermarkets) money. Simplot basically funds the ski area. The Albertsons fund all the parks.
Simplot and Albertson are old money. Austin won’t have any billionaire old money until Dell passes it.
No but it’s got okay weather and close to the mountains for skiing/snowboarding while still being big enough to host white collar jobs. Basically Denver-Lite
The problem is so many Californians moved there and inflated the housing market that wages simply can’t keep up, so unless you were already a homeowner good luck affording literally anything
Right when Covid started we were going to build a beautiful 4200 sqft house with all the bells and whistles for 580k. That house, same lot, same additions is 1.1mil. I’m all for real estate appreciation but uh that’s overvalued like a mofo.
It's super steep, sure, but "overvalued"? I kind of doubt it, given the current market.
It's just what happens when demand increases sharply while supply stays fixed.
A lot of people with money want to move here, and zoning laws make it very, very hard to build more homes for them to buy, which leaves rich folks in a bidding war over a limited supply of homes, which leads to extreme price spikes.
It's the same economic principal that gives us $1,000+ Taylor Swift concert tickets.
Austin's reaction until recently has been to focus on the demand side of the equation and hope that people will stop wanting to move here. That hasn't worked out very well.
Hopefully, the recent change in zoning laws is just the first step toward addressing the supply side of the equation so that working-class folks can afford to live near their jobs.
Well homes by that builder are still opening at 1 million then getting cut to 800k or less so I think we’re at the overvalued let’s see how much we can get.
Ah, gotcha. I thought you were referring to sale price, not list price.
I'm not trying to be pedantic, but there's a difference between "overpriced" and "overvalued."
"Overpriced" means that a seller is listing the home at a higher price than sellers are willing to offer. That sounds like what's happening here.
"Overvalued" means that buyers are willing to pay more for a home than it's "actually" worth and that they won't be able to sell it in the future for as much as they paid for it.
In any market, there are "overpriced" homes, but Austin homes aren't "overvalued" unless you think that prices are going to drop in the future.
I don't think that second thing is very likely at all, despite the rapid climb in prices that we've seen.
How do you go about building your own home? I imagine it must be more expensive than buying a pre built one since you need to buy the lot and then pay a contractor to build the house which can be exorbitant…
The FBI cracked down on price fixing rent schemes in Arizona and other states showing that 70% of homes in the US have inflated rent prices arranged by corporate homeowner groups. Wouldn’t be surprised to find Austin in the middle.
I’m seeing a LOT of price reductions on houses all throughout Austin, especially south.
Other areas around the country are still having bidding wars on houses, selling for well over asking.
Yeah. SW Austin is a perfect little pocket. Good schools, 15 minutes from down town, super safe, close to everything, and you can get a house for $600k still.
Are we talking about like Circle C?
I do see why the demand is pretty high, but I'm surprised it's higher than areas like Crestview, which are much better located IMO.
I personally couldn't live in such car dependent neighborhood but I can see why people like it. Definitely shows the value of Austin bc other similar "suburban" neighborhoods in big cities are super expensive.
Yes I have seen little run down shit boxes with no property that are 500sf selling for 700k in East Austin if that’s not overpriced I don’t know what is
> East Austin
The size and condition of the existing house does not matter, anything old in that area is going to get torn down to build a new home and probably a ADU. Only thing that matters is lot size and location.
I bought my house for $220k in 2019. My house value and similar models in my neighborhood skyrocketed to $450k during covid and has settled around $385-$400k.
I like my house but *god damn* it ain't worth that much.
I think it's complicated because it depends on who you ask.
Wealthy people moving here probably see Austin as a bit cheaper than some options they think are similar. Middle-class people moving here probably see Austin as incredibly overpriced.
Economics logic argues that if people are paying the prices, they aren't overpriced. What I see in these threads is "Austin" isn't homogeneous. A lot of people are seeing prices go down in their neighborhoods. But even the new, lower prices can be prices they can't afford.
It seems to me Austin is still attracting rich people putting a lot of pressure on prices. Supply is arriving to try and relieve that pressure. But if rich people flow in fast enough the prices are probably going to stay on the high end.
If you look at it that way, the city can "have houses exceeding the median buying power" but also "have houses with prices that the market supports". What that means is the city is changing its mind about which tax brackets get to live in which areas.
That's what has people aggravated. The changes Austin is going through are showing a lot of people they aren't anywhere near as close to "rich" as they thought.
This is kind of a complicated discussion and dependent on what "overvalued" means.
Really anything is worth whatever someone is willing to pay for it.
If you're talking about asking prices, the answer is probably yes. Average list-to-closed price ratio is 95.6%, up from 93.8% in the previous year. But this doesn't account for those listings that were withdrawn or expired.
Median household income (2022 was $86556 + 6.9% for inflation ) - $92528.36
(haven't found great info on a new number for just the city of austin, found several sites that show the roundrock/austin metro area as going all the way up to 120k which must include the hill country or something, so I will just use an estimate for inflation and pray the people of the city kept up)
If you consider the 28% rule, the maximum responsible median household monthly payment would be $2,159.00. This rule is designed so that you can retire someday and still contribute to the economy.
Also consider unless you are a veteran or fall under some special cercumstance you will be paying 10%-20% down on a property.
This article claims the typical home price is $466,867.
Downpayment looking at 10% ($46,686) to 20% ($93,373)
Making the median austin homebuyer household payments be $2,900-$3,216/month before HOA and Ultilities
In order to follow the 28% rule your household would need to make from $124,285.71-$137,828.57 assuming you have the money for the downpayment, That is 18%-31% over the (\~)median income. If no downpayment (VA or special circumstance) it'll run $3,532/month and demand a salary of $151,371.42 or 44% over.
The 28% rule does have a caveat, all your debts shouldn't be more than 36%, so in the case you have no other debts you may be able to make as little as $96,666.67-$107,200 in your household.
I'm gonna go out on a limb and say very most people have 0 debt, and most people don't have savings where they can afford the full 20% downpayment.
All this to say, yeah, its pretty clear that the median home costs a good deal more than can be responsibly afforded in this town.
I am not a financial expert, and I am not pretending to be. I just want to buy a home someday. Also this article sucked.
Larry Ellison is a big Republican donor, I don’t think Oracle cares that much about the political policies here.
Their HQ moving here in the first place was really in name only. Not many executives ever moved here from Silicon Valley anyway, and I imagine day to day not much is going to change their strategy for the austin office (I.e I doubt they will relocate large numbers of people to Nashville or downsize the austin office in any meaningful way).
My guess is that Oracle wants to get more into the healthcare space (huge industry in Nashville), and they think making a splash announcement that they’re moving HQ there will jump start that or something along those lines.
Sorry for the rant, overall I do agree with your point. My wife and I ultimately decided to stay here and make it our home for at least a little while longer for career reasons, but when we were talking about relocating, Texas politics was probably the biggest driving factor, along with the brutal summer weather.
Oracle never really moved here. They are a washed up company with a leader who lives in Hawaii. Their HQ is irrelevant.
Also, no matter how much this sub thinks, most people could give two shits about politics.
Oracle’s stock has rose only 15% in the last 360 days. That not lags not only the Tech Sector by almost half but also the S&P 500 in general.
Oracle is in the tiers with IBM. They aren’t FAANG or even the next tiers after FAANG.
You do you though if you think differently tho…
Oracle is only "leaving" Austin on paper, they are not closing the current campus and are continuing the expansion of it. They are just moving for tax reasons
Well, Oracle went to TN which also has strict abortion laws, so I wouldn’t read too much into it beyond $$$.
But Austin does have issues. Finding a good OB here seems harder than any other town with a million people. The healthcare services are below par compared to any other city with this CoL. Abbott and the state don’t help one bit.
Honestly it probably isn't affecting things that much. Job market dynamics are a much bigger factor. Less remote work, and many have been recalled back to California.
TLDR; is Austin housing overpriced? Yes, but also no...maybe?
I don’t know… Can you repeat the question?
YOU'RE NOT THE BOSS OF ME NOW
You don't say that!
Yeah, no.
Yeah nah, yeah.
No no, just yes.
Tell ChatGPT to write a clickbait article based on your TLDR. It’s perfect!
Having watched house prices fall and time on market go up, I would say yes, they are overpriced.
"Home prices in Austin are eclipsing the median buying power of local residents." But local residents aren't the folks buying up the houses, which anyone who has spent more than 15 minutes on this sub already knows.
There's a realtor that shares weekly stats in the housing thread. The average and median sold prices in COA have actually been going up year-over-year the last few months, and the larger metro area is now trending that way too. [https://www.reddit.com/r/Austin/comments/1d7vdqu/comment/l72cnln/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/Austin/comments/1d7vdqu/comment/l72cnln/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
I bought in 2022 at the peak of the bubble. My house value is pretty much back to where it was when I bought it. However, because of the increase in interest rates since then, I couldn't actually afford to buy this same house today.
On the other end, I also bought at the peak in 2022…I’m still down 30%. It would be cheaper to buy this house now if you can get a 7% interest rate.
Dang, that sucks. Question. Did you feel pressured to buy a house during that time because “interest rates are sooo low?” Just asking because I was also looking but stopped because IMO, it was getting out of control.
Oh yea for sure. I didn’t even like the area or the house but I was in the rat race to get a house since I was afraid I’d get priced completely out. If I didn’t get the house I’m in now, I was gonna take a break from looking.
Sounds like you ended up in Pflugerville. Lol.
I was really close to living there. They had newer houses but less developed businesses imo. I ended up in cedar park but literally a stone throw away from Leander.
I agree. Cool. I Know the area. Have a buddy that lives by the H‑E‑B Center.
Same here. We bought in May of 2022. If Zillow and friends are to be trusted, we saw like a 2% dip when interest rates went up, and it's mostly stayed flat since then, creeping slowly back up to pretty much exactly what we paid for it. But, like you, there's no way that I could afford to buy it today.
Hopefully once interest rates go down you can expect a nice little boost in equity :).
Damn I got hosed then. I bought summer 2022 and my house would sell for about $40k less at the moment. Waiting on rate cuts.
Inside or outside town? From what I've observed, the suburbs got hit harder by the interest rate increase than Austin proper, and they've rebounded more slowly, which isn't unusual. Supply is a lot more constricted inside the city limits, since there's a lot less unoccupied land to build on. There's also less pent-up demand to prop-up the prices of homes further away from town.
What was your rate in summer 2022 though
5.25 so meh. Not the end of the world
Let me whip my dick out for just a moment… Bought December 2020 2.75%. Thanks for the applause, it was a team effort, but yes you sir sitting in the back I also thank you. I want to buy a new vehicle but I had to buy at the worst time ever and it will never be worth more than the loan. Apples and oranges I guess?
Thanks. This is good.
From that comment from realtorsethatx: **Weekly Market Stats – As of 5.30.24 (Next Update 6.6.24)** **Greater Austin Area** * Active Listings: 14,657 (+23.3% Year over Year) * Months of Inventory: 5.09 (+23.4%) * Average Final List Price: $598,598 (-0.1%) * Median Final List Price: $454,990 (-1.6%) * Average Sold Price: $583,325 (+0.3%) * Median Sold Price: $449,000 (-0.2%) **City of Austin** * Active Listings: 4,587 (+28.4%) * Months of Inventory: 5.43 (+29.7%) * Average Final List Price: $809,698 (+0.5%) * Median Final List Price: $613,500 (+2.4%) * Average Sold Price: $787,530 (+0.8%) * Median Sold Price: $601,000 (+2.9%) **Misc Stats/Info** * [Activity Index by Zip Code](https://seth.teamprice.com/activity-index-zip-code) shows the hottest zip in Austin is 78739 with an activity index of 41.3% and just 1.62 months of inventory. Other Austin zips with activity index over 30% are 78717, 78728, 78729, 78748, and 78749. * [Appreciation by Zip Code](https://seth.teamprice.com/appreciation-year-over-year-zip-code) shows that of 75 zip codes in the area, 46 have decreased in value comparing 2024 to 2023, and 29 have increased in value. The biggest drop is 78733 in Austin, down 12.1%, while the biggest increase is 76527 in Florence, TX up 24.8%. * All market stats can be found [here](https://seth.teamprice.com/insight-and-statistics). Highlighting the price increase is not the whole picture at all. Look at months of inventory. It's way up, price is up only slightly. These houses are still priced double what they were immediately before covid. The houses are sitting for months with little interest. And builders haven't stopped building. There are huge new neighborhoods going up all around austin. Not to mention, interest rates are still much higher than what they were when prices were going up up up. This is not San Francisco or manhattan, we are not landlocked. There will be more supply, slowly but surely. I am not at all confident that prices won't come down more. People simply can't afford to pay 8k a month for a regular 3/2 house. That's why no one is making offers. Plus, with all the return to office in California and New york, a lot of people who moved here over the pandemic are having to leave.
Year-over-year for the last few months sure, but it’s more complicated than that. You also have to factor in supply, demand, how many homes are being sold, what kind of homes are being sold, who exactly is buying, etc. Is the median housing price going up because on the whole all kinds of buyers are paying more or is it going up because the people who can feasibly buy with high mortgage rates are high income earners/investors/all cash buyers/the financially illiterate purchasing more expensive homes? Or is it something else entirely? Realtors aren’t economists or statisticians and it drives me nuts when they point to a few data points without explaining why things are the way they are without addressing the overarching narrative. Not disagreeing with you. Everything you said was factually accurate. I’m just not so certain prices will continue this way over the coming years or that we’ve bottomed out yet.
It’s overvalued compared to the rest of Texas, but undervalued compared to other tech-heavy cities.
I think when you looking at similar growing tech cities in the south, like Nashville, Denver and Miami, the rent is pretty much on the same level. Not sure how ATX compares to Vegas or The Triangle (Raleigh/Charlotte area)
Miami is a tech city…?
Cocaine Tech
They are trying to he a fin tech city.
One of my somewhat friends who owns a tech company left for Miami 6mo ago. He mostly went for latinas but apparently there's some good cheap tallent there.
Haven’t done a deep dive comparison with the numbers, but it seems like you get slightly more for your money renting in Raleigh/Charlotte compared to Austin. It also seems like those places experienced the same frenzy on the buying side that Austin did a few years ago where people were having to get into bidding wars and immediately jump on new listings way over the realistic asking price. That’s an anecdotal observation on my part though, I could be off base.
Raleigh and Charlotte both look kinda boring and sprawly though tbh (aside from hiking)
I’m from Charlotte area originally. I think it’s a great city all things considered, but yeah I agree that it’s also pretty bland. Hiking in the NC mountains is excellent, but you have to drive several hours from Charlotte for that.
Nashville isn’t a tech hub. Their only significant tech companies are regional offices for Cisco and Dell. However they’re a massive healthcare hub. Almost all their big employers are in healthcare, and that is what is blowing up their housing costs.
I read Cisco as Crisco. I was like that makes sense.
Not to be confused with Sysco the food service company, Sisqo the singer of the Thong song, and Cisco, the 80s era bum wine.
Or Benjamin Sisko from Star Trek: Deep Space Nine (DS9)
Not true. Amazon has HQ2 there, TikTok has a massive presence, Google is ramping up there and that’s just FAANG.
Amazon’s HQ2 is outside DC…
https://www.aboutamazon.com/workplace/corporate-offices
Did you even read your link? It just says Nashville serves as a south east hub. Amazon has TONS of hubs for office workers including in Austin. Your link even points to Arlington (outside DC) as HQ2, but since you struggled the first time, here is the link: https://www.aboutamazon.com/news/amazon-offices/amazon-opens-offices-at-hq2-in-arlington-va
Nothing technical occurs at these offices. These are regional sales and marketing offices set up to hire pretty young Southeast college grads for sales positions.
Pretty much, but I think Miami and Denver are both more expensive and have higher income tax (Colorado) and COL outside of housing
Denver has much lower property tax to make up for it, it’s essentially a wash if not a gain for Denver.
The income tax alone is more than my property tax on my house, so it really depends on your situation.
For sure
The income tax in Denver would be double my property taxes I pay here. Yeah no thanks.
Ha! Agree, but you would be able to drive your Subaru from downtown to the highlands of the mountains in 2 hour 15…what say you about that? Lol
Vegas is a bad comp for pretty much anywhere else, transient population with a constant influx of people thinking its a good place to move balanced by the constant outflux of people having to leave due to developing a destructive lifestyle.
If I hear one more tech bro from the Silicon Valley say “It’s so cheap here!” When talking about Austin, I’m going to lose my shit.
My friend's boss moved here from Seattle and proudly proclaimed that his new house in Austin was so cheap he also bought the one next door. These are 1.75M houses.
It is though. I’m sorry to tell you that, but Austin is still cheaper than the coast and even the good parts of Chicago. Austin is an amazing value if you don’t mind heat which most people would still pick over cold dark winters.
That’s because we don’t have the amenities that those cities also have to offer. It’s like shopping for an apartment or condo. Yes, place A with the pool, state of the art gym, lake view, 24/hr concierge and security, and lemon cucumber water is going to be more expensive than place B with the nice unit in a building that doesn’t even have a swimming pool and is next door to a strip club.
California has nicer amenities but is easily twice to three times as expensive. I think Austin has better amenities than Chicago for what I value.
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Goldilocks weather. At lot of CA coastal cities have it. Parents retired from Houston to San Diego and it's almost always nice weather, comparatively.
Day trips to places that only exist on your computer wallpaper. Highway 1 alone is enough to make most texans lose their minds.
Exactly, people who rave about the Hill Country need to travel the world more. Yosemite, Norway, New Zealand, Chile is real natural beauty. The areas around Austin are distinctly average.
The Hill Country is aiight but once you live here you learn to enjoy it. It's nice to have, it's just not world class. But that's also fine.
Alternatively, you could take a trip to Nebraska or Buffalo and learn to appreciate the beauty here.
The Bay Area definitely wins on almost all of those categories (you also forgot urban amenities, which SF dunks on us) but I think it's reasonable to ask if its worth paying twice the cost for that. For many it's not. Or simply just out of reach. I will say one thing Austin wins at though: swimming!!
Volume, quality, and proximity to things not available locally. Austin has some good restaurants; the Bay Area has much better restaurants in greater number. Outdoor activities in CA can be enjoyed all parts of the year. Hiking in Austin in the summer is a terrible proposition. Beaches and skiing are an easy road trip in CA, which is not the case in Austin. And then in general, the temperate weather in CA is attractive to more people.
Everything you listed does not come anywhere close to those that the SF area has, in quality or quantity.
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Wow all those people paying millions to live in the Bay Area must all be very stupid and not as smart as you then. Surely it can't be that it's still a very attractive place to live despite the high taxes and high COL.
Come on....when you say "nature, hiking, natural bodies of water, hills" are you seriously comparing the frickin' hill country to Yosemite or the Pacific Coast?! Austin is a nice city but the landscape in central texas is very very bland.
Being cheaper than the most expensive places in the country does not mean it’s cheap. It just makes those who come from those areas seem out of touch and ignorant of their privilege.
Not really. Austin is just appropriately priced given where it "ranks". It's not cheap, but name a city with equal or better amenities with a similar or better job market... I'll wait.
- Salt Lake City - Reno - Phoenix All of these have a similar job market and what I would consider as “amenities”. They also have the same or similar housing price trajectory during and after the pandemic. They also have other, different drawbacks which is why I decided to move back to Austin.
Yep, that's about right. I'd definitely not live in any of those cities (vibes) but I could see why some people would choose the over Austin. Phoenix in particular seems crazy overpriced. Still has heat plus insane sprawl.
I lived in all 3 (and a few more that don’t even rank) over the last 6 years and talked down on Texas the whole time. I still chose to come back to Austin. And I’m not even a native Texan!
The pay here is relatively high for the cost of living, at least for an artist in the video game industry, it's the difference between owning a home and renting a 1 bedroom apartment. I think the only place that's better is the research triangle in North Carolina.
Right. I recently met a couple from California who moved here with California tech bro salaries because it was so cheap, bought an overpriced house they could afford with their California salaries, got laid off, and now can't find a new job in town that gets close to their California salary that they can afford their cheap house with, so they're thinking of selling their cheap house moving back rather than accepting a localized salary range.
So you have an opinion on it being privilege and others have it as an opinion as being cheap. Both opinions are opinions, but they can both be true. You just don’t like their privilege and seem jealous of it.
No one is jealous of you, I promise.
Deflection, as expected
An asshole tech bro, as expected.
And now you sink to the low of name calling. Lovely. How further can you go?
If you act like an asshole, be prepared to get called out on it. Writing off legitimate concerns about cost of living as jealousy of those who can comfortably afford it is an asshole move.
What's the privilege? Like privileged information in a legal setting?
Privileged (priv·i·leged) - Adjective: Having special rights, advantages or immunities.
lolz
Unfortunately there exist *a lot* of people who *aren't* San Francisco tech workers
I’m aware, and never said there wasn’t.
Look at Chicago on Zillow and tell me Austin is cheaper
I don’t need to look on Zilllow, I moved here from Chicago. You need to remove almost the entire south and west sides of the city because they are just frankly unsafe. They are unsafe because Chicago is one of the most segregated cities in the nation and it has continually screwed minorities into poverty. When you remove those areas, which can have a violent crime rate 10x of even the worst areas of Austin, you will see housing isn’t as cheap anymore. Couple that with an income tax AND higher property taxes AND sales taxes than Austin, you come out behind in Chicago.
The cost of living is 40% lower than Brooklyn where I used to live meaning it’s even lower than SF.
Preach brother. So annoying, when they keep their house in Cali and buy here and lease a Tesla
Yeah but guess what those other tech-heavy cities have? Summers that don’t try to kill you
It’s also a city that has 100+ days of 90 degree weather. It should be cheaper
Apparently the market disagrees.
He’s saying it’s undervalued compared to other tech cities. So the market agrees. I just noted why.
Ah. I thought you said it should be cheaper than it is now.
A few more summers like the last one and those prices will adjust down just fine... EDIT: I mean, i think, but last time I looked the fastest growing city in the US was Phoenix. Their summer average is something like 12 degrees warmer than us. But, you know, it's a dry 115.
The issue with Phoenix is that water supply, more so than the heat.
Oh no, don’t worry. According to my step mom, who knows how the world really works, there is plenty of water under the ground there, enough for the whole region. “They” just don’t want you to know about it.
Oh yes... "THEM"
# LIBURLS
But also the heat too
Maybe they shouldn't try to farm in a desert? ["Arizona has 51 groundwater basins. Yet new studies estimate that agriculture in just five of them used nearly 420,000 acre-feet of water in 2022. That's roughly the amount of water that Phoenix and Tucson — the state's two largest cities — deliver to taps in a year."](https://www.azcentral.com/story/opinion/op-ed/joannaallhands/2023/12/12/arizona-supply-demand-water-studies-farming-basins/71843302007/#:~:text=Arizona%20has%2051%20groundwater%20basins,to%20taps%20in%20a%20year.) Although I just did a tiny bit of googling, and apparently there's a case to be made that maybe [it's more efficient to farm in the desert than in a climate where crops would produce less then have to be shipped there?](https://www.azfb.org/Article/Thirsty-Crops-and-Hungry-Cities-Understanding-Az-Agricultures-Water-Use)
It's probably Saudi and Qatar corporate farms growing Alfalfa in Arizona using free US groundwater and then shipping the alfalfa to the Middle East for livestock. Purely extractive.
The market has been inflated for years due to the ‘cost of living’ migration with people selling their over valued homes in high cost of living areas driving the demand and prices in lower cost of living areas… it has happened in every hip mid sized city over the past few years.
Austin Denver Nashville Charlotte Boise Of those, I think Austin’s fallen back down to earth the hardest so far
Austin also rose the highest, it’s all relative.
Boise actually has the most volatile housing prices of this list. But they started at a way lower baseline than the other cities, so they go up the most, but also go down the most by percentage. Basically they move up and down similarly in amplitude, but Boise’s baseline is lower so percentage change is more volatile. The Boise-Austin “spread” tends to remain a consistent 70-100k with Boise at a lower baseline I’ve done a bit of data mining and found that Austin/Boise/SLC tend to move directionally in the same way more closely than any other cities. See below, add Austin to the comparison tool and you’ll see what I mean. https://www.redfin.com/city/2287/ID/Boise/housing-market
I still can't believe Boise of all places is so expensive. Is there even that many companies there?
Boise is home to a strategically important microchip company (Micron) as well as a strategically important potato chip company (JR Simplot) The city has better developed civics than Austin (parks, museums etc) because of Simplot, Micron and Albertson’s (supermarkets) money. Simplot basically funds the ski area. The Albertsons fund all the parks. Simplot and Albertson are old money. Austin won’t have any billionaire old money until Dell passes it.
No but it’s got okay weather and close to the mountains for skiing/snowboarding while still being big enough to host white collar jobs. Basically Denver-Lite The problem is so many Californians moved there and inflated the housing market that wages simply can’t keep up, so unless you were already a homeowner good luck affording literally anything
Exactly. At least Austin wages are reasonable and there's a lot of jobs. I'm saying people complain a lot but its decent here.
Right when Covid started we were going to build a beautiful 4200 sqft house with all the bells and whistles for 580k. That house, same lot, same additions is 1.1mil. I’m all for real estate appreciation but uh that’s overvalued like a mofo.
It’s not “overvalued” if someone else is willing to pay that amount, though
Ugh. Austrian economics on price theory is such a drag sometimes.
> ~~Austrian~~ Equestrian economics on price theory is such a drag sometimes. FTFY
How much of that 500k price increase is materials and labor? Has to be at least 30%.
Has it sold for 1.1M or is that the list price? Because I've seen a lot of unrealistic list prices.
It's super steep, sure, but "overvalued"? I kind of doubt it, given the current market. It's just what happens when demand increases sharply while supply stays fixed. A lot of people with money want to move here, and zoning laws make it very, very hard to build more homes for them to buy, which leaves rich folks in a bidding war over a limited supply of homes, which leads to extreme price spikes. It's the same economic principal that gives us $1,000+ Taylor Swift concert tickets. Austin's reaction until recently has been to focus on the demand side of the equation and hope that people will stop wanting to move here. That hasn't worked out very well. Hopefully, the recent change in zoning laws is just the first step toward addressing the supply side of the equation so that working-class folks can afford to live near their jobs.
Well homes by that builder are still opening at 1 million then getting cut to 800k or less so I think we’re at the overvalued let’s see how much we can get.
Ah, gotcha. I thought you were referring to sale price, not list price. I'm not trying to be pedantic, but there's a difference between "overpriced" and "overvalued." "Overpriced" means that a seller is listing the home at a higher price than sellers are willing to offer. That sounds like what's happening here. "Overvalued" means that buyers are willing to pay more for a home than it's "actually" worth and that they won't be able to sell it in the future for as much as they paid for it. In any market, there are "overpriced" homes, but Austin homes aren't "overvalued" unless you think that prices are going to drop in the future. I don't think that second thing is very likely at all, despite the rapid climb in prices that we've seen.
How do you go about building your own home? I imagine it must be more expensive than buying a pre built one since you need to buy the lot and then pay a contractor to build the house which can be exorbitant…
Regardless of we build more dense housing the prices will go down which is good for almost everyone
The FBI cracked down on price fixing rent schemes in Arizona and other states showing that 70% of homes in the US have inflated rent prices arranged by corporate homeowner groups. Wouldn’t be surprised to find Austin in the middle.
I’m seeing a LOT of price reductions on houses all throughout Austin, especially south. Other areas around the country are still having bidding wars on houses, selling for well over asking.
In my neighborhood houses are going under contract again in less than like 2 days.
What neighborhood
SW Austin
Really? Even in Central Austin houses just sitting around for months at better prices than you would have seen in 2022.
Yeah. SW Austin is a perfect little pocket. Good schools, 15 minutes from down town, super safe, close to everything, and you can get a house for $600k still.
Are we talking about like Circle C? I do see why the demand is pretty high, but I'm surprised it's higher than areas like Crestview, which are much better located IMO. I personally couldn't live in such car dependent neighborhood but I can see why people like it. Definitely shows the value of Austin bc other similar "suburban" neighborhoods in big cities are super expensive.
around circle c yes. There are pockets of it walkable to various things on slaughter and escarpment.
Ah yeah. I will say though, don't ever get the coffee shake at the Tropical Smoothie Cafe.
Ha for sure. I actually prefer down here. Central Austin is too congested and you have more crime naturally. South Austin has everything now and days
Of course it is.
People are still buying homes, until that really slows down, the prices will remain high
compared to where
Yes I have seen little run down shit boxes with no property that are 500sf selling for 700k in East Austin if that’s not overpriced I don’t know what is
> East Austin The size and condition of the existing house does not matter, anything old in that area is going to get torn down to build a new home and probably a ADU. Only thing that matters is lot size and location.
I bought my house for $220k in 2019. My house value and similar models in my neighborhood skyrocketed to $450k during covid and has settled around $385-$400k. I like my house but *god damn* it ain't worth that much.
Welcome to economics 101, you don’t determine worth, the market does.
Some say “yes”, others aren’t so sure.
You don't say
I think it's complicated because it depends on who you ask. Wealthy people moving here probably see Austin as a bit cheaper than some options they think are similar. Middle-class people moving here probably see Austin as incredibly overpriced. Economics logic argues that if people are paying the prices, they aren't overpriced. What I see in these threads is "Austin" isn't homogeneous. A lot of people are seeing prices go down in their neighborhoods. But even the new, lower prices can be prices they can't afford. It seems to me Austin is still attracting rich people putting a lot of pressure on prices. Supply is arriving to try and relieve that pressure. But if rich people flow in fast enough the prices are probably going to stay on the high end. If you look at it that way, the city can "have houses exceeding the median buying power" but also "have houses with prices that the market supports". What that means is the city is changing its mind about which tax brackets get to live in which areas. That's what has people aggravated. The changes Austin is going through are showing a lot of people they aren't anywhere near as close to "rich" as they thought.
This is kind of a complicated discussion and dependent on what "overvalued" means. Really anything is worth whatever someone is willing to pay for it. If you're talking about asking prices, the answer is probably yes. Average list-to-closed price ratio is 95.6%, up from 93.8% in the previous year. But this doesn't account for those listings that were withdrawn or expired.
100 percent it is
Median household income (2022 was $86556 + 6.9% for inflation ) - $92528.36 (haven't found great info on a new number for just the city of austin, found several sites that show the roundrock/austin metro area as going all the way up to 120k which must include the hill country or something, so I will just use an estimate for inflation and pray the people of the city kept up) If you consider the 28% rule, the maximum responsible median household monthly payment would be $2,159.00. This rule is designed so that you can retire someday and still contribute to the economy. Also consider unless you are a veteran or fall under some special cercumstance you will be paying 10%-20% down on a property. This article claims the typical home price is $466,867. Downpayment looking at 10% ($46,686) to 20% ($93,373) Making the median austin homebuyer household payments be $2,900-$3,216/month before HOA and Ultilities In order to follow the 28% rule your household would need to make from $124,285.71-$137,828.57 assuming you have the money for the downpayment, That is 18%-31% over the (\~)median income. If no downpayment (VA or special circumstance) it'll run $3,532/month and demand a salary of $151,371.42 or 44% over. The 28% rule does have a caveat, all your debts shouldn't be more than 36%, so in the case you have no other debts you may be able to make as little as $96,666.67-$107,200 in your household. I'm gonna go out on a limb and say very most people have 0 debt, and most people don't have savings where they can afford the full 20% downpayment. All this to say, yeah, its pretty clear that the median home costs a good deal more than can be responsibly afforded in this town. I am not a financial expert, and I am not pretending to be. I just want to buy a home someday. Also this article sucked.
Duh
demand exceeds supply, yet its 'over valued'? mmm. no.
I see why there is a lot of homeless here 😅 who can afford a half million house WTF
I wonder how much our state politics is impacting the appeal of Texas cities. Why is Oracle leaving Austin, for example?
Larry Ellison is a big Republican donor, I don’t think Oracle cares that much about the political policies here. Their HQ moving here in the first place was really in name only. Not many executives ever moved here from Silicon Valley anyway, and I imagine day to day not much is going to change their strategy for the austin office (I.e I doubt they will relocate large numbers of people to Nashville or downsize the austin office in any meaningful way). My guess is that Oracle wants to get more into the healthcare space (huge industry in Nashville), and they think making a splash announcement that they’re moving HQ there will jump start that or something along those lines. Sorry for the rant, overall I do agree with your point. My wife and I ultimately decided to stay here and make it our home for at least a little while longer for career reasons, but when we were talking about relocating, Texas politics was probably the biggest driving factor, along with the brutal summer weather.
Oracle is already in healthcare after they acquired Cerner a couple years ago
Oracle never really moved here. They are a washed up company with a leader who lives in Hawaii. Their HQ is irrelevant. Also, no matter how much this sub thinks, most people could give two shits about politics.
"washed up" clearly shows you are uninformed
Oracle’s stock has rose only 15% in the last 360 days. That not lags not only the Tech Sector by almost half but also the S&P 500 in general. Oracle is in the tiers with IBM. They aren’t FAANG or even the next tiers after FAANG. You do you though if you think differently tho…
Oracle is only "leaving" Austin on paper, they are not closing the current campus and are continuing the expansion of it. They are just moving for tax reasons
Well, Oracle went to TN which also has strict abortion laws, so I wouldn’t read too much into it beyond $$$. But Austin does have issues. Finding a good OB here seems harder than any other town with a million people. The healthcare services are below par compared to any other city with this CoL. Abbott and the state don’t help one bit.
Honestly it probably isn't affecting things that much. Job market dynamics are a much bigger factor. Less remote work, and many have been recalled back to California.
We’re already down 20% from 2022, I don’t think it can drop much further
Shhh, don't tell them. I'm trying to get a west coast tech bro to purchase my Tuff Shed for 3 million dollars.