There was an article on the front page of the Austin American Statesman today that confirms what I’ve been experiencing in helping buyers who are looking for affordable homes in the central Austin areas. Here is the article: For some home buyers, ‘reasonable’ can be elusive
Right now there are 21 homes priced below $150,000 that are 3 beds, 2 baths, with a garage in the central Austin areas which go as far north at Parmer Lane, and as far south at Slaughter (north-south) and as far east as hwy 183. That’s not a lot of inventory!
Home buyers who can only afford to buy a home in the $150,000 range are forced to have look in the outlying areas around Austin. Real estate prices have risen so more buyers are being driven away from the city’s center to suburbs like Pflugerville and Round Rock. Many households that earn the region’s median annual income of about $70,000 and are looking to buy a home at or below the area’s median home price — $174,500 in 2006, the highest of any metropolitan area in Texas are very limited on what they can find in Central Austin.
There is a big problem that is developing now on how people who earn the median income levels are not able to afford even homes priced in the $150,000 range due to their debt levels like (auto payments & credit cards).
“It is a communitywide social problem affecting every single person, from employers who are paying more to retain employees to school districts that are losing teachers as they move to outlying areas to work closer to where they can afford a home,” Mitchell said.
The numbers show the pain.
A family of four making $71,000 could qualify for a $225,450 mortgage with a 6.5 percent interest rate, assuming the family has no other debt.
“The problem is much bigger than any of us think,” said Terry Mitchell, president of Momark Development LLC, which is working on several condo projects whose unit prices would start in the low $100,000s.
“At $1,000 a month in debt outside of a mortgage, the mortgage loan amount drops to $119,500,” Mitchell said. “That house, at that price, may not exist, or if it does, it is in very limited supply.”
The situation is worse for a family of four making $56,000 a year, about 80 percent of the area’s median. With no debt, the family could afford a $180,000 mortgage at 6.5 percent. Throw in $600 to $1,000 a month in debt, and that mortgage drops to $75,000.
“That house does not exist, to my knowledge, for a family of four,” Mitchell said
This is an issue because anyone who is making the median average working in Austin should be able to afford to buy a home in the city. The good news is Central Texas job growth is double that of the national average.
When you buy a house in a lower price range you have to figure you are going to sacrifice something. The issues are price, quality and location, and most people have some constraints, so pick any two and be willing to let go to get of one of them to get what you want.
New people to our city are liking what they’ve been able to find because our prices are still low compared to places like California and the Northeastern states.
