How Austin Became One of the Least Affordable Cities in America

[Manitopiaaa]

AUSTIN — Over the last few years, in one of the fastest-growing cities in America, change has come at a feverish pace to the capital of Texas, with churches demolished, mobile home parks razed and neighborhood haunts replaced with trendy restaurants and luxury apartment complexes.

The transformation has perhaps been most acutely felt across East Austin and the neighborhood of Montopolis, a 2.5-square-mile patch southeast of downtown, where unobstructed views of the ever-expanding skyline have made the historically Black and Latino neighborhood a sought-after community.

And the momentum is nowhere near abating. These days, construction sites and cranes feel more like permanent fixtures across the neighborhood, where longtime residents have watched with growing anxiety as chic coffee shops, yoga studios and pricey bars have inched closer and closer.

“We knew it was coming,” said Francisco Nuñez, who for nearly two decades lived at the Cactus Rose Mobile Home Park until it was sold to a developer to make way for amenity-rich apartments that now fetch more than double what he once paid in rent.

A decade ago, Austin, the capital of Texas often deemed a liberal oasis in a staunchly conservative state, was among the most affordable places to live. Now, according to a forecast prepared by Zillow, a real estate company that tracks affordability, the Austin metropolitan area is on track to become by year’s end the least affordable major metro region for homebuyers outside of California. It has already surpassed hot markets in Boston, Miami and New York City.

With an average of 180 new residents moving to the city every day in 2020, housing inventory is very low, realtors said. Multiple offers, bidding wars and blocks-long lines outside open houses are commonplace.

Home sale prices in the city of Austin skyrocketed to a record median of $536,000 in October, up from about $441,250 a year ago. And they have more than doubled since 2011, when the median sales price was $216,000, according to the Austin Board of REALTORS, a trade group. Rentals, too, have surged, with the average cost of an 864-square-foot apartment now $1,600.

https://www.nytimes.com/2021/11/27/u...able-city.html

[KevinFromTexas]

It's pretty much always been this way, though. We've consistently had around 150 people moving here every day since the 90s. I was out yesterday and saw license plates from Nuevo Leon (Mexico), Utah, California, Colorado, Louisiana, Florida, New York, New Jersey, and Kansas. What seems different now is the national attention we get and also the increased exposure we have from the big music festivals and Formula 1 and MotoGP.

[AviationGuy]

I get tired of the description "liberal oasis" in a staunchly conservative state. People think we're the only liberal area, but the other large cities, at least the cities proper, are liberal to moderate and tend to vote Democrat. Suburbs are in general getting less conservative. The problem is that rural areas and smaller cities and towns are indeed very conservative, and they tend to vote much more reliably. Plus, with the GOP controlled redistricting once again, it will be difficult for the state to turn the tide anytime soon.

[R1070]

Originally Posted by AviationGuy

I get tired of the description "liberal oasis" in a staunchly conservative state. People think we're the only liberal area, but the other large cities, at least the cities proper, are liberal to moderate and tend to vote Democrat. Suburbs are in general getting less conservative. The problem is that rural areas and smaller cities and towns are indeed very conservative, and they tend to vote much more reliably. Plus, with the GOP controlled redistricting once again, it will be difficult for the state to turn the tide anytime soon.

Exactly. I certainly wouldn't say Dallas is a conservative city.

[Steely Dan]

The reason why Austin often gets pegged as a liberal outpost in a sea of red is because it's the only major Texas MSA that is overwhelmingly blue. The other three are all radiantly purple.


Biden margin in 2020 by MSA:

Austin: +27.3
San Antonio: +3.4
Dallas: +1.2
Houston: +1.1

Source: https://skyscraperpage.com/forum/sho...&postcount=432


If the Dallas, Houston, and SA metros we're as deeply blue as Austin's, Texas would immediately become one of the safest blue states in the nation. They're not conservative overall, but relative to other big league metros in their respective weight classes, they do lean much more red than most others. and it's not just a "oh, but this is the south" thing, as Atlanta was a +15.6!

If the Dallas and Houston MSAs had went +16 for Biden like Atlanta did, the election would've been a full-blown blow out.

[KevinFromTexas]

^Austin has a considerably smaller metro than Houston and Dallas and even San Antonio, but overall it had a larger blue area around it than those others did in the 2020 election.

https://www.nytimes.com/interactive/...ction-map.html

Red/Blue precincts' highest percentages:

Dallas
Biden: 99%
Trump: 67%

Houston
Biden: 96%
Trump: 68%

Fort Worth
Biden: 96%
Trump: 62%

Austin
Biden: 94%
Trump: 45%

San Antonio
Biden: 90%
Trump: 52%

El Paso
Biden: 88%
Trump: 52%

[Wigs]

Originally Posted by KevinFromTexas

It's pretty much always been this way, though. We've consistently had around 150 people moving here every day since the 90s. I was out yesterday and saw license plates from Nuevo Leon (Mexico), Utah, California, Colorado, Louisiana, Florida, New York, New Jersey, and Kansas. What seems different now is the national attention we get and also the increased exposure we have from the big music festivals and Formula 1 and MotoGP.

what happened to Texas being the affordable state?

For years on this forum I heard "well, you can still afford a single family home in the Texas metros"

$536k USD = $685k CAD or the typical median price of a home in the Niagara Region

[dc_denizen]

Originally Posted by Wigs

what happened to Texas being the affordable state?

For years on this forum I heard "well, you can still afford a single family home in the Texas metros"

$536k USD = $685k CAD or the typical median price of a home in the Niagara Region

austin is booming with huge growth in high-end jobs. Incomes are much higher than in the Niagara region. Housing costs account for a smaller portion of peoples incomes.

did that article mention the typical incomes earned by austins transplants?

[Wigs]

I can't even joke with Kevin lol

[DCReid]

I just read an article that even San Antonio prices are zooming. They are now higher than Houston's. Is it possibly spillover from Austin?

https://www.bizjournals.com/houston/...Pos=3#cxrecs_s

[EastSideHBG]

Ah yes the double-edged sword of success, always fun to have to start dealing with this part of it.

Originally Posted by Wigs

what happened to Texas being the affordable state?

For years on this forum I heard "well, you can still afford a single family home in the Texas metros"

$536k USD = $685k CAD or the typical median price of a home in the Niagara Region

What I have always found interesting is the spin about the housing costs over the years. About six years ago I had the opportunity to relocate to Dallas via my job and I have a few friends that moved there so it was enticing and I spent a week working from there and exploring. But at the time while the housing prices were comparable/slightly better than around here in Philly [depending on the area of course], the property taxes and some other living expenses were more than I had expected so on paper was it really cheaper and if so, was it really by that much?

[Crawford]

It is strange, however, how TX continues to be perceived as "affordable", even by people from states like Ohio and Indiana. You have people moving from Cleveland to Dallas and they talk about affordability, even though home prices are 2-3x as much and property taxes and fees are higher. It's weird. Are people not aware that a Dallas-area neighborhood with quality schools and a not-terrible commute means like 600k+ homes? How is that cheap for people from Ohio?

Probably more of the great sort. People are sorting off into their ideological/worldview bubbles. You also see this when people talk about leaving OH because it's too liberal, even though OH is more red than TX these days. TX will vote for a Dem POTUS long before OH.

[sentinel]

Originally Posted by Crawford

It is strange, however, how TX continues to be perceived as "affordable", even by people from states like Ohio and Indiana. You have people moving from Cleveland to Dallas and they talk about affordability, even though home prices are 2-3x as much and property taxes and fees are higher. It's weird. Are people not aware that a Dallas-area neighborhood with quality schools and a not-terrible commute means like 600k+ homes? How is that cheap for people from Ohio?

Probably more of the great sort. People are sorting off into their ideological/worldview bubbles. You also see this when people talk about leaving OH because it's too liberal, even though OH is more red than TX these days. TX will vote for a Dem POTUS long before OH.

Illogical cognitive bias, doubly polluted for decades by mass media framing Texas as the capital of American conservatism, even though it's a far more complicated picture. The only reason TX became more 'red' was because of Karl Rove's pandering to extreme and casual moralists alike, when he helped get George Dubya elected governor is 1994.

That being said, Texas is NOT a cheap state, but the tax rate is still one of the lowest in the country because of gas and oil revenue helping fill that void, bigly (not to mention federal subsidies that maintained that status quo). I do not know how that will be maintained in the coming decades.

[DCReid]

Originally Posted by Crawford

It is strange, however, how TX continues to be perceived as "affordable", even by people from states like Ohio and Indiana. You have people moving from Cleveland to Dallas and they talk about affordability, even though home prices are 2-3x as much and property taxes and fees are higher. It's weird. Are people not aware that a Dallas-area neighborhood with quality schools and a not-terrible commute means like 600k+ homes? How is that cheap for people from Ohio?

Probably more of the great sort. People are sorting off into their ideological/worldview bubbles. You also see this when people talk about leaving OH because it's too liberal, even though OH is more red than TX these days. TX will vote for a Dem POTUS long before OH.

TX is attractive to many (not me) because of its perceived newness and open space. When you look at new homes from developers in TX, they show these 3000 sf McMansions on at least 1/2 acre or more. The fact that they are far from the urban core does not bother many people. In Ohio, I saw similar development in the Columbus exurbs like Maryville. To me Columbus reminded me of a southern city - mostly car dependent, relatively weak downtown core with some gentrification near the downtown and some old nice downtown areas, some decaying inner ring suburbs, and new affluent suburbs spreading out everywhere and miles from the center. I don't know what other Ohio cities have but get the idea that the suburbs have old houses and there is not as much new suburban areas.

[austlar1]

My second reading of the article suggests to me that the author mostly interviewed people who might feed her the story she already had written in her head. She would have been well advised to speak to a wider variety of realtors (the one or two interviewed seemed like they were not very typical of the local breed), mortgage brokers, and title officers in order to get a more reasoned view of the local market, which is NOT dominated by out of state profiteers or Airbnb property hoarders. I'm not saying that things haven't been hot around here in terms of real estate, but there is so much in this article that seems sensationalized. The most accurate thing in the article is the slide show with the fourteen or fifteen properties with list price, offering price, and closing price. The slideshow paints a much more realistic picture of the market this past year.

[Wigs]

I'm a big fan of Austin. I was there in 2011 when the high-rise boom was getting underway. A lot of cool restaurants and bars, and friendly people!

It's great to see the city increasing density in the downtown core with all the new condo towers and mixed-use, all the influx of new residents, new jobs.
The only downside is now the cost of a house pushing up to the $600k mark. But that's to be expected when it's become such a desirable city in the South/SW

[dc_denizen]

austin could do a lot better job controlling sprawl, the northward extension of the city is something to behold really

that said, the change from my last visit in 2010 compared to my visit last year was remarkable.

basically this is all new:

https://www.google.com/maps/place/Ea...!4d-97.7310735

this too

https://www.google.com/maps/place/St...!4d-97.7362583

look at all the midrises on south lamar

https://www.google.com/maps/place/Ra...!4d-97.7631658

but how are these parking lots still in existence north of 6th? Noticed this ten years ago., and this is basically the only park of DT that hadn't changed.

https://www.google.com/maps/place/St...!4d-97.7362583

https://www.google.com/maps/@30.2686...7i16384!8i8192

[llamaorama]

I think what this suggests is that maybe unaffordability comes from the market not being able to keep up with population growth.

And this is in Texas, so while areas within the boundaries of the city of Austin itself might have zoning restrictions, many areas outside the city don't. And Texas makes it easy for small cities and for special districts and developers to get infrastructure in the ground with bonds. The state builds plenty of roads to make outlying pieces of land accessible. This is a 'business friendly' state and also we have a lot of illegal immigrant construction labor willing to show up and work hard in not necessarily good conditions for a, less than prevailing wage. So you'd think the development machine that could produce an adequate supply of housing could within the politicized excuses the right and left both tend to come up with.

[Manitopiaaa]

Originally Posted by DCReid

I just read an article that even San Antonio prices are zooming. They are now higher than Houston's. Is it possibly spillover from Austin?

https://www.bizjournals.com/houston/...Pos=3#cxrecs_s

Which is a shame, since it's my favorite city in Texas, and I don't want it to be discovered.

Here's what I'm seeing on Redfin for city propers and October 2020-October 2021 change:

• Arlington: $305,000 (+26.6%) (!)
• Austin: $550,000 (+20.9%)
• Dallas: $381,000 (+2.3%)
• El Paso: $197,000 (+4.8%)
• Fort Worth: $311,000 (+21.1%)
• Galveston: $358,800 (+19.0%)
• Houston: $286,420 (+14.6%)
• McAllen: $221,000 (+19.8%)
• New Braunfels: $365,000 (+21.7%)
• Plano: $435,000 (+14.8%)
• San Antonio: $279,240 (+18.8%)
• San Marcos: $325,000 (+16.2%)

Counties over 500,000:

• Bexar: $287,000 (+17.9%)
• Collin: $445,000 (+21.6%)
• Dallas: $315,000 (+10.5%)
• Denton: $400,300 (+16.3%)
• El Paso: $203,000 (+10.3%)
• Fort Bend: $350,000 (+16.7%)
• Galveston: $315,000 (+11.5%)
• Harris: $290,000 (+16.0%)
• Hidalgo: $200,000 (+17.6%)
• Montgomery: $325,000 (+14.0%)
• Tarrant: $316,000 (+19.7%)
• Travis: $525,000 (+22.2%)
• Williamson: $430,000 (+32.3%) (!)

[Manitopiaaa]

I guess I should be saying thank you to Texas as a Millennial prospective homeowner in Virginia. If it weren't for people mobbing Texas and the Mountain West, I'm sure D.C. prices would have spiked. Also, in typical D.C. fashion, we're slow and extremely behind the curve, so many of our counties have home prices barely keeping up with inflation (and Alexandria, Arlington, Fairfax, and Washington are getting cheaper if you factor in inflation of 6.2%). For once, I'm happy about how bureaucratic and boring D.C.'s reputation is!

Here's my metro area for comparison:

• Alexandria: $575,000 (-0.5%) [6.7% cheaper than last year in real terms]
• Anne Arundel: $410,000 (+2.9%) [3.3% cheaper than last year in real terms]
• Arlington: $685,000 (+3.0%) [3.2% cheaper than last year in real terms]
• Charles: $400,000 (+14.3%) [8.1% more expensive than last year in real terms]
• Fairfax: $615,000 (+5.1%) [1.1% cheaper than last year in real terms]
• Frederick: $405,000 (+12.0%) [5.8% more expensive than last year in real terms]
• Howard: $500,000 (+14.9%) [8.7% more expensive than last year in real terms]
• Loudoun: $610,000 (+11.9%) [5.7% more expensive than last year in real terms]
• Montgomery: $540,000 (+7.8%) [1.6% more expensive than last year in real terms]
• Prince George's: $386,500 (+8.3%) [2.1% more expensive than last year in real terms]
• Prince William: $445,000 (+8.5%) [2.3% more expensive than last year in real terms]
• Washington: $705,000 (+4.4%) [1.8% cheaper than last year in real terms]

You can still see prices increasing in nature-adjacent exurbia (Frederick, Howard, and Loudoun), but prices declining or stagnant in the inner city.

It's still a bit weird though seeing Dallas suburbs more expensive than safe and wealthy Washington, D.C. suburbs like Frederick and Prince William (no offense to Plano and Frisco, I'm sure they're nice places for a McMansion!).