Austin area homes are not as expensive as you might think
It can be frustrating seeing misleading statistics and hearing many longtime Austinites talk about how Austin area real estate has become so unaffordable that only the rich can afford to buy a home. I’m here to tell you that’s not true.
Have houses in the city of Austin become expensive, you bet! The latest Austin Multiple Listing Service statistics show the median priced home in the city of Austin hit $423,000. When I moved from my rental in central Austin and bought my first house in NW Austin 21 years ago I paid $97,000 and now it’s worth over $300,000.
My experience has been when talking to longtime Austin residents, I hear many mention how unaffordable housing has become but I don’t hear nearly as many objections from newcomers to the area. (Most newcomers don’t come from high priced areas like California, most come from other parts of Texas, especially Dallas and Houston.)
Why is there such a disconnect between the two groups?
A lot has to do with the rapid growth in Austin. 20 years ago most of the metro area’s houses were still located in the city of Austin and most jobs were still within a few miles of downtown. In 2000 there were a little over 400,000 residents in the metro area who lived outside of Travis county compared to almost a 1,000,000 today. There are almost as many people living outside of Travis county today as there were in the whole metro area 20 years ago.
What does that have to do with affordable housing in Austin?
People generally want to buy homes near their work and where shopping and amenities are nearby. Looking at the map of Austin’s major employers, there are now as many major employers north or 183 as there are south of 183. Along with all the employer growth has come the expected restaurant, retail and entertainment options as well. When I first heard the Domain being called a ‘second downtown’ I had my doubts, but looking at it now with skyscrapers going up and Austin’s first major league sports stadium rising, it really has become a magnet for residents similar to downtown.
With all this growth outside the city center, residents no longer need to be so close to the higher priced central Austin. Instead, they can still be relatively close to employment and entertainment centers now in N/NW/NE Austin and Round Rock while still finding affordable homes with good schools and amenities.
Many longtime Austinites, including me, still remember when Austin was a smaller town and feel drawn to live closer in (less affordable), while many newcomers don’t give living in central Austin a second thought (more affordable). Their jobs are mostly up north and other than an occasional trip downtown for some fun, living in North Austin or its suburbs has everything they want.
What’s an affordable home?
With current record low interest rates home prices are not as far out a reach as some people think:
A $240,000 house with a 5% down payment is an estimated $1574/month total house payment INCLUDING estimated taxes and insurance. (30 year fixed loan using an average tax rate for city of Austin house and no HOA payment – verified by a local lender)
What does $1574/month buy you? The average $240K house in Travis/Williamson/Hays county is 1700 square feet, built in 2007 with 3.25 bedrooms, 2.15 baths and a 2 car garage.
If you can budget up to $2000 a month, you can afford to buy a $300,000 house with 5% down which comes to a $1978/month total house payment. (same conditions as loan above)
That’s not too shabby when considering the median Austin area 1 bedroom apartment rent (rentjungle.com and curbed.com) is $1300/month and 2 bedroom is around $1600/month.
Sure, but where can you buy a single family home for $240,000?
There have been over 3300 homes sold in Travis, Williamson and Hays counties for less than $240K this year and they are not as far out as you think.
Here’s a sampling of what has sold for under $240K this year:
- 500 have sold within 10 miles of the future Apple campus in NW Austin
- 850 have sold within 10 miles of Dell’s Round Rock headquarters
- 1000 have sold within 10 miles of Amazon’s future massive fulfilment center in Pflugerville
- 400 have sold within 10 miles of future Tesla plant in east Austin
The Laurie Flood team has been fortunate to have helped many home buyers find affordable homes. So far this year we’ve helped 8 buyers close on homes under $240K and another 8 buyers find homes priced between $240 and $300K.
If you’re new to the Austin area, please don’t be discouraged by the high city of Austin statistics or what you hear from some about the city’s unaffordability. Yes, a single family house within walking distance of downtown is going to be very expensive. On the other hand, there were over 1500 single family homes sold so far this year within 10 miles of the domain with a total monthly payment of less than $1978/month (under $300K).
If you’re considering purchasing a home, please give us a call. We’d love to discuss some of the many options available for first time or experienced buyers in finding and getting the best deals out there!