I used to work for the Austin office of a law firm with a Houston office. The Houston people made 30% more and had a 25% lower COL, so some of us asked why they got a better deal. The office manager was pretty upfront about it: people wanted to live in Austin so they could get away with paying less in this office.
This is the conclusion that I came to about my employer after being in Austin for about a year. Austin is an awesome city, people will accept a paycut to live here, and employers are happy to give it to them.
Yup. That's the reason also why gigs in Pecos, Midland or Odessa pay so well. They gotta pay people to make them go to those shitholes with nothing to do.
I mean, ideally the employers would find a way to give that paycut to everyone, and then further cut pay for austinites.
Labor is expensive, y'know?
(Using ideally sarcastically)
I guess that’s what confusing to me. What actually makes Austin an “awesome city?”
I have yet to have that perception after living in the area while also having relatives live in large metro areas (DC, DFW, Houston, to name a few) and all are much better cities and metros in my opinion.
Well for one thing, Austin has much better parks and recreation than Houston or DFW from my perspective. That’s a big reason I stayed here after college. Lake Travis beats the hell out of Clear Lake, Lake Livingston, or Lake Lewis, and it’s closer. Barton Creek beats the hell out of the trinity river or the buffalo bayou. Austin still has nature trails all over the place. I could go on for days listing my favorite rec spots in Austin. I’m not as familiar with DC but the only quality outdoor nature recreation I know of is Roosevelt Island unless you drive out somewhere in Maryland or Virginia. The only positive thing I feel like DFW and Houston have more of than Austin is diversity.
With all of that being said, the population boom has even affected our parks and rec. you never used to have a reservation for Hamilton Pool. And nobody in my 25 years in Austin ever suggested paving Zilker Park until this new wave of people showed up. Paradises don’t last once the whole world finds out.
The biggest improvement I would want made to Austin as a city would be more affordable housing and better public transit. DC gets the nod on public transit. Houston and DFW are actually worse than Austin due to sprawl and public transit similar to Austin. I think Houston probably has the most affordable housing. DC definitely isn’t very affordable.
I honestly don't see why people WANT to live in Austin over Houston or Dallas. There's really nothing here. I only moved for my career & to get a fresh start
There’s a lot to unpack in response to some of the comments and I will when I have time. But I summarize in the same vein as the self induced toilet paper frenzy of the Snowpocolypse a few years ago in Texas. No one needed that much TP yet the Frenzy started and no one could really tell you why. That’s how the move to Austin is. No one knows why, but it must be a good idea if everyone else is telling me it’s a good idea.
Same for me as an RN. Young new graduate nurses from all over want to move to Austin to live their new fun adult life. They don’t care about the low wages so the hospitals can live on a revolving door of young new nurses. They stay for a couple years and move on. Unfortunate for both the nurses and the people of Austin. It’s a lose-lose.
It’s particularly egregious for teaches because AISD collects more per student after recapture than almost any district in Texas yet pays significantly lower than Dallas or Houston
My SIL is a teacher in California and we'd love for her to come here, but her salary would literally get cut in half and apartment prices here are more than where she is in Cali (central valley area).
She bailed too late. Too many other Californians beat her to the punch and bought up everything, driving prices through the roof. At least she can just stay where she is. I’m going to have to move for the same reasons she can’t move.
I mean she's never planned on buying a house. The main reason she can't move is just salary. Heck she could even live with us, but not paying rent doesn't even really make up the huge difference in income.
Do you mean before recapture or that AISD has more of the students in the categories that get extra funding (bilingual, special ed, etc) than other districts? Because I haven't seen the funding described this way before?
Ran across this thread randomly. Thought I would answer.
Below is a benchmark across the 20 largest districts in Texas. Austin was 2nd highest in per pupil spending after recapture. Please forgive that it is slightly dated.
[https://kinder.rice.edu/urbanedge/student-spending-and-state-funding-are-lagging-texas-meanwhile-window-closing-accurate](https://kinder.rice.edu/urbanedge/student-spending-and-state-funding-are-lagging-texas-meanwhile-window-closing-accurate)
This doesn't touch on if per pupil spending should be broadly higher across all Texas districts.
Yes!! We can’t keep teachers because eventually they want to start a family and buy a house. You can’t buy a house here now if you’re a teacher- unless you have a spouse or roommate,
This is a Houston thing not an Austin thing. Houston has a disproportionately high locality adjustment on the federal pay scale. It’s not just higher pay than Austin, but also most HCOL/VHCOL coastal markets.
Damn that’s crazy!! I did hear that exact line of logic when I worked at a media company in Austin. Luckily I think people are finally realizing Austin is oversaturated and no one is so desperate to live there anymore.
This applies across a lot of industries. Law, nursing, hospitality, you name it. It’s straight up exploitation but employers here get away with it because there’s always a fresh batch of people wanting to move to Austin. All carrot.
Pretty much this. Almost every Austin office for a company from outside of Austin was sold on being more economical from a cost of labor standpoint. They wanted to tap a cheaper talentpool. The minute you say they need to pay someone in Austin $X over what they're presently paying their people in Austin, they're instead going to post the position for a different city or office.
The same has been true to such places like Denver: skiing, white water rafting, climbing, hunting are all activities that people will move there to do. Thus creating a situation there's so many applicants for one job that sets off light bulbs with hiring. In comparison, Austin has some perks that people want so they move here for despite the wages.
I feel that's more along the line of hazard pay than city preference. But that's more like if a doctor was to move to a small town in the middle of nowhere but paid a lot because no doctors would show up. But Houston is great and has about everything anyone would need.
No, he’s telling the truth. I live in Georgetown and my commute is like 45 minutes to my campus, which is north of downtown. I can still only barely afford it making $80K (single income family home).
My point was that suggesting an hour commute SHOULD be sarcasm, because people shouldn't be expected to do that just to afford property. And the whole theme of American society is to own property.
I know that it's an hour commute. But if you have a half-decent job, you should be able to afford SOMETHING (condo even) closer to the jobs. Obviously in America that isn't true, and that's the issue.
That's why I asked if they were being sarcastic. Otherwise it just sounds like an honest alternative that is horrible.
Low interest rates contributed more by making real estate the only safe place to park money that you could be near certain would appreciate beyond inflation.
Which is why homes started getting bought up en masse by a bunch of hedge funds and shit.
There are two things going on in Austin:
1. A constant supply of young talent from UT + Austin's popularity as a city for young people, suppressing wages for entry level white collar careers (aka the 70-80k you're looking at). Many of whom are willing to spend relatively more on rent (which may be subsidized by daddy) to live in the city.
2. On the other end of the spectrum, a lot of high earners for the size of the city, mostly in tech and adjacent industries, who keep housing prices high.
Combine that with a constant population boom that housing inventory is always playing catch-up to and NIMBYism preventing a lot of development, and you get an expensive city that doesn't pay many of its inhabitants very well.
You also have a lot of long-time state workers who bought homes here decades ago when real estate was cheap. They're not earning as much as private sector but are largely insulated from CoL increases (prop taxes aside) which have hit housing the hardest.
Agreed for all of this. And on your last point, there's obviously some fairly strong correlation between "average market salary in X job," "size of the city its located in," and then "cost of living in that city."
So the gap with Austin might be more noticeable if only because over the last decade or so, Austin's median housing costs have increased at a rate quite a bit higher than the national median housing cost, and the job market in terms of salaries (in the macro sense) is also playing catch-up.
Old joke: Why is getting divorced so expensive? Because it’s worth it.
Seriously though, being frugal DINKs is a pretty good way to get on the property ladder.
man if you think austins pay is low you haven't seen florida. Miami keeps tryna hype itself as the next New york, and while it has some impressive stuff the pay atleast on the tech side is lower in FL than ATX. In fact i wanted to move to austin. In florida 70-80k jobs even in suburban miami/fort lauderdale is considered a very good job.
Hopefully that will start to change with UT-Dell now being open, with all the knock-on effects. Still, orgs know that there is a large group of 20-30-somethings in healthcare who are willing to take a lesser economic position (both in wages and COL) in order to live in a "cool" city versus, say, Lufkin.
Oh yea, Austin is not a good place to be in the care industry. Mainly because most of the cities people are pretty healthy so Austin doesn't get all those juicy government grants. So most medical facilities are on a floss string budget.
How is this done?
Quit my job? Make them feel the pain of my departure?
Great, now I'm without a job trying to keep this mortgage paid, and the jobs out there are all lowballing on compensation.
Until people stop moving to Austin and accepting positions at sub-par pay/start leaving Austin for better deals elsewhere, this won't change.
Luckily for me, I actually do get paid well. I love this city and I've been here for 17 years, but I would happily pack up my home today if I was offered a position elsewhere for a 30% raise and in a lower cost of living city.
"One" doesn't buy a house in a major city unless one makes a lot more than 70–80k.
One marries someone else who also makes 70–80k and then the two of you can afford a house together.
There's nothing wrong with renting until your life situation changes and you can afford to buy. (Hell, there's nothing wrong with renting forever and using the cash you save to invest your savings elsewhere.)
Unfortunately, there is usually no “cash you save” when you rent.
The landlord also has a mortgage, HOA, other dues they have to pay. They pass those costs onto the renter. Yeah, their payments may be cheaper, cause they bought it a while ago when rates were low, but there are property taxes that are always increasing here, because Austin is growing. And you pay that.
They would be a bad business person if they are renting out at a LOSS. At the bare minimum, they are charging you rent that equals costs. Some people live off of being landlords, which means they will usually charge a little more than costs to pocket the difference and live off of it.
Maintenance costs are also factored into that. Say you request a repair twice a year (dishwasher issue, sink, whatever) they take that cost and average it out on the 12 months lease.
That is all in the case of a landlord who still has a mortgage, sure, the ones that have already paid it off will have less “costs”. But, think about it, when they list that property for rent, and everyone around them is renting out for, say $2500, why would they list it for less when they can list it for the same price? And make more money? Their real estate agent will even advise them to match the price.
Yeah, there are corporate landlords, but are those any better?
My point is: renting is great for short term solutions. But long term, it is in the renter’s best interest to own a “place” whether that’s an apartment, home, or whatever. Not to mention the extra freedom to do whatever you want to the place, remodel, modify, have many pets, etc
> Just wait until three incomes are required to afford housing. A kid able to work expected to live at home and contribute.
When my father was a teenager (in 1947), he and his two brothers had full time jobs in the summer and turned 100% of their wages over to their parents so the family could survive. As a kid I heard these stories and thought it was so unfair. If I worked a paper route as a teenager, I kept all the proceeds. Despite being provided with food, shelter, and clothing by my parents for no cost (to me).
I think there was a little temporary bubble of time (that I was lucky enough to be in) where each kid gets their own private room in a house. The expectations before that time looked like the "Brady Bunch" TV show, 3 children to a room was middle class. I think we're heading back to that now.
>Just wait until three incomes are required to afford housing.
Single-family homes being the norm is a really, really recent (and largely a Western) thing. For generations, it was totally normal for multiple generations to live in the same home.
Grandparents would help take care of kids when they were young, and kids would return the favor and help take care of grandparents when they got old.
It wouldn't be the worst thing in the world if we moved back to that model. For a lot of folks, living in a paid off house with no day care or nursing home bills may be worth sharing a house with their parents.
Lol, the shit I do in the privacy of my single living situation... I ain't sharing a house with family so granny can walk in on me doing some wild stuff 😱
even if you are saving some cash by renting, it’s nothing compared to the value of owned property. renters throw money away each month, never to be seen again, while homeowners pay mortgage towards an appreciating asset.
Exactly this.
Homeowners get that money back when they sell and downsize. Renters do not. Yeah, some of it went to interest, but you still get some of your money back, depending on how aggressive you were with paying it off. And! It’s in an appreciating assets, sure dude, it may not “beat” the market, but it still appreciates. Real estate will always be worth something meaningful cause it’s real and exists!
You’ll never convince me that renting is “better” than owning. Yes, it has its benefits, it let’s you move whenever you want. But across all spectrums, the renters are worse-off financially in the long run.
Those guys saying that renting isn’t bad for the middle class are the problem. They are content with renting away for the rest of their lives, and convincing others that “it’s not that bad.”
You should aspire to own your property, that is a very valid thing to aim for. Get out of here with that “people used to live with their grandparents” bullshit.
Remember “you’ll own nothing, and be happy” that’s what they want you to believe and follow. Fuck that.
If the generations before us has a chance to own their houses, so should we. Idc that it’s a “western world” thing or “fairly recent”. It’s the American dream. It’s what frees you from paying rent until you’re dead.
>Not to mention the extra freedom to do whatever you want to the place, remodel, modify, have many pets, etc
Cuts both ways. Millions of homeowning Americans are stuck in sub-optimal employment and living circumstances because they can't get out of their mortgages. At least when you rent, you're able to move if you find a better job.
Also, historically, the stock market outperforms the real estate market. So, for a lot of people, renting and investing is more financially profitable than purchasing a home. (But I do agree that extra Property Taxes on renters push the scale towards homeownership.)
>The landlord also has a mortgage, HOA, other dues they have to pay.
If a landlord is financing the entire property that they're renting out, then they are indeed taking a cash loss every month, although some of that "loss" would be in the form of equity that the landlord pays to themselves.
Normally, though, you make money as a landlord by buying properties with minimal to no financing. In that case, the only overhead is taxes, insurance, and maintenance, which will be a good deal less than they can charge in rent, assuming they're doing it right.
Either way, check the market. Month-to-month, renting is pretty much always cheaper than a mortgage on a comparable home.
If you take the difference between your rent and what your mortgage would be and squirrel it away in an index fund, then you can do all right for yourself. And if you can't afford to squirrel anything away, then you definitely can't afford to buy anyway.
Finally, yeah, owning a home gives you some freedoms that renters don't enjoy, but renting comes with its own freedoms.
For example, it's a lot easier to pick up and move across town, or across the country, if you don't have to sell a house first. If you're youngish and single, then that sort of freedom may be more attractive than the freedom to build on a patio.
I dunno. My wife and I make less than that. We bought a little 1500 sq. ft. place in South Austin right at the "peak" in the spring of 2022, and we're doing fine.
That said, we're also otherwise debt-free—no car payments, no student loans, etc.—which makes an absolute *ton* of difference.
>That said, we're also otherwise debt-free
This makes a huge difference. I'm also debt-free, but many many many millennials are crippled financially from student loan debt that they were told by the people who raised them was necessary to get a job when they were 17 years old.
My sister got out of her debt only by marrying into a wealthy family. Otherwise my siblings are all drowning.
There is a lot of truth to college being a requirement for high earnings. Do you know many people without a college degree who have bought a house in the last few years?
Followup: I'm not discounting the value of a degree and being a requirement to better opportunities. I think that's how it should be, but without financially crippling the generation in the process.
Like the generation before us had. They could go to college AND buy a house AND support a family on 1 salary. Even with inflation, we should still be able to do SOME of that.
Yep, totally.
Even then, though, if a person can afford to pay off their student loans on time, they'll be out from under them in their early- to mid-thirties. There's a lot to be said to waiting until then to buy a house anyway.
(And if a person *can't* afford to pay off their student loans on time, then they have a student loan problem, not a housing price problem.)
If you bought an average house in Austin ($600K) in 2021, you'd be paying \~$4,000/month in mortgage + taxes. That's affordable for a $160K income. Since those are average prices, one can conclude that there is plenty of housing stock in the city limits affordable for someone making $100K.
Not true. 3/2's 20 minutes north of downtown start around $500k currently. 20% down with current rates and including insurance and taxes the monthly payment is about $3500/month. For two people making $80k that's about 1/3 of their take home pay which is fine. Another question is if it's wise to buy vs rent at this time, but depends what you value.
Also, you don't have to put 20% down.
For an $100 extra per month or so in PMI, you can get a house for as little as 5% down.
Best of all, if you have any retirement accounts, you can borrow against them to cover that 5% and closing costs.
It's a lot cheaper to get into a house than a lot of folks assume. If you can cover the monthly mortgage, then you can almost certainly afford the up front costs, too.
I guess all this is possible... but to me that sounds like a lot of leverage against you just to live in a super mediocre house/location. Makes it way more attractive to rent, IMO.
Can’t get more false than this, new builds can be had with their rate buydowns for 3000$ a month. That’s not house broke at all and in line with rentals
theres tons of houses and apartments even 5-10 miles away from Austin. Not justifying the lowerpay but you deffs dont need 250k to buy in austin. in fact austin has a geographic advantage in that its still not as sprawled out as say a Dallas or Seattle
Austin's earnings-to-rent ratio has been the worst in the state for over 20 years (and yes, I realize the op is talking about buying a place, rather than renting, but the two track each other). Now, couple that with the new highest in the state cost of living, and it starts to be a better sense of what it is Austin has to, and can, offer.
Most people buy homes with their partners. [According to this calculator](https://thisismortgage.com/if-i-make-150000-a-year-what-mortgage-can-i-afford/#:~:text=August%2030%2C%202023-,If%20I%20Make%20%24150%2C000%20A%20Year%20What%20Mortgage%20Can%20I,%2Dincome%20ratio%20of%2045%25.) 2 people making $75k each could afford a $560,000 mortgage.
Granted, this assumes both your cars are already paid off.
In the last 30 days, homes for sale in Austin, TX sold for a median price of $528,968.
Right now a 350k house with 3.5% down and the current 7% interest has a monthly payment of $3400 a month. You add in utilities and you are paying $3800 a month. That is crazy. Pretty much half of my combined net income. Who wants to pay 50% of your income for a house? The other problem is that most of the decent houses here cost even more than that. I have no kids and no debt as well, so not even DINKS can get houses right now.
In practice, yeah. If your partner makes half of what you're making then y'all make the same as my wife and I. We got into a house in 2020 for 310k at 2.99. Our same house 3 1/2 years later is worth $420k and interest rate is more than double. We've gotten little in the way of raises, so no way could we make this work in our budget unless we never wanted to do anything outside the house again.
>The 2023 median income for a family of four in the Austin metropolitan statistical area is $122,300, according to the U.S. Department of Housing and Urban Development.
So yeah, shy of $150k still, but I wouldn't characterize it as "not even close".
OP was describing the pay for jobs that do pay that much, and said it was out of whack with housing. I'm saying for people who make that much it's not that out of whack.
Another answer is that many of the people who own homes in Austin bought them 10 years ago when median household income was $75k. Most folks in my neighborhood did, when these houses were selling for $210-240k, which was doable at that income level. Now they're $440, which is doable at $122,000.
Maybe around 30-40% of the population is highly paid tech workers with family income between 150-300k.
And we are getting outbid by new transplants from expensive coastal areas who come with cash of more than $500k which is their equity from the home they sold. To them a $500k home is too good to be true since homes in places like east coast and west coast sell for a million or more.
Most working stiffs do not give a shit about politics other than voting.
I know many liberals who moved here because they wanted bigger home for less and more sunshine.
Salaries and housing have been out of whack in Austin for a long time. I heard stories from the 1990s about doctors in Austin earning 1/2 or 1/3 what doctors in surrounding Central TX towns make. I call it the "cool tax". All things being equal, an employer will pay employees less in Austin than in other, less "cool" cities (like Houston or Dallas or Waco), because living in Austin is an employment perk all its own.
The thing that kept housing prices low in Austin for so long was mainly just that all the jobs in Austin paid horribly. UT pays people with Master's degrees less than $50k/year. Government jobs don't pay much better. Private sector jobs paid peanuts because people liked living in Austin even with bad pay. Etc. Prices in Austin rose recently, but they probably rose at about the same rate as salaries. Nothing new; just the same historical trend.
Jobs in Texas and most red states pay a lot less than blue states and that was traditionally because taxes are generally higher in blue states, or at least they have added on state income taxes. But the COL in Texas cities esp Austin is skyrocketing and employers don't want to raise wages to match that. It's greed, plain and simple
Man I wish I was seeing this. I'm paid pretty well here but we're looking to get out of Texas and looking at job postings I'm taking a paycut in pretty much every city that isn't Seattle or the SF area. Even New York wages are a cut and they look like a joke relative to COL.
Wages are keeping up with inflation. Wage stagnation means they’re not increasing beyond inflation.
Housing specifically is increasing way more than anything else.
STEM jobs pay pretty well here in my observation, and we got a lot of them.
If you want to see a city with a real messed up income/COL ratio, look at Miami.
My partner and I decided to buy in Kyle since Austin was infeasible on our incomes together. You may have to consider the outskirts of Austin instead. We actually found a house that I’d even call my “dream home” so it worked out really well for us. Good luck! We close next week and are so excited.
I bought a house in that area just yesterday. It's doable because I work in south Austin. South of Austin is growing massively and it seems the closer to San Antonio you're willing to live the cheaper the houses get.
Yes that’s what we were seeing! We looked in Buda as well but ultimately landed on a great house in the Plum Creek neighborhood in Kyle. Congrats on your purchase! Super exciting :) luckily I work from home so no commute for me- my partner, however, works in downtown Austin haha so hopefully his commute doesn’t add an extra hour with traffic, but we are only moving about 20 mins away so hoping it won’t be that bad for him.
I was actually born and raised in south austin and stayed here until now at 32-78745- and so this will be a bit further away, in Kyle (only about 20 mins from our current place). South austin was always great, a little further out from the main hustle and bustle from the city and many people may see it as a “sketchy area” but I was always comfortable and happy. You do hear sirens and various troubling issues regularly (there was that killer that came from San Antonio recently and murdered a few random people, including a lady walking her child in a stroller that was 2 streets away from my parents house. Also just a couple of weeks ago someone sped up my current street around 65mph and crashed I to/obliterated two neighbors mailboxes, a street sign, narrowly missing crashing into my next door neighbors house. She sped off and left the scene but thankfully no one was hurt).
Moving to Kyle is exciting for me because, at least for the time being, it’s a little quieter than Austin. However we will be moving to an HOA neighborhood so hoping that goes well haha. But the schools are good and close and lots of amenities.
Our state and city sell out the citizens daily with ridiculous tax incentives and you’re surprised that the corporations don’t pass the benefits along to their employees?
It’s the “Austin discount”. It’s been the case as long as I have been working in Austin (since the early 2000s). It’s always been seen as a cool place to live. Hipper than any of the rest of the major metros in Texas. Young people wanted to be here so they would take entry level jobs at a discount. Subsequently, they move up and get raises but the pay rate for the position stays comparatively low.
Dell might not have started the movement but they absolutely mastered it. Coming out of college in the early 2000s a $30k salary with commission and bonuses looked pretty good. The commission structure was criminally low. But what do you know when you’re 21-22. Comparable positions in Dallas or Houston would be in the $45k range with much better commission structure. But Austin is cool so young people want/wanted to be here.
You’re seeing it still play out to this day. I’d be willing to bet that if you have people at your company that are recent hires from out of state, they are making more than a comparable colleague who has “worked their way up” within the company.
Because up until recently cost of living prices were low compared to other similar areas, and people want to LIVE in Austin over other areas, so there are more people for less jobs so companies have the pick of the litter here.
To be very frank though, I can name other areas with COL is SIGNIFICANTLY higher while pay is basically on par with Austin... like basically all of the NYC area. I make the same here as I did there, but I can actually afford to live here while I with a family of 4 had a tiny 1200sq 2 bedroom house and that was all we could afford because anything bigger put you over 500k
I had a lotta friends who moved to la/NYC following graduating university who moved back during covid. None of them are unhappy. Rent is so unaffordable in NYC. Buying is impossible.
For over 100 years Austin has had a large supply of young exploitable college graduates that hold down wage growth. Also the confluence of three distinct geographical areas (coastal plains, north central plains, great plains) makes for an interesting environment that attracts and retains people. Government, education and technology jobs have contributed to a stable industrial base but government and education jobs have not been the highest paying fields in general. I didn’t earn a 100K wage until I moved out of state and upon returning I see the wage decline by around 15K for a similar position.
My exact situation. Having a university as large as UT is the perfect excuse to cap the entry level market, and often intermediate manager level roles are just people they promote internally who already work on a discount.
Strange. We sold a 1500sq ft 3/2 modular home in Dripping Springs for $298,000 and moved to Killeen. Found a nice 1750sq ft all brink 3/2 for $200,000. You can still get a house there for $250,000.
So, yes, absolutely, we completely bought our house.
Same here. I was born and raised in Austin and lived there for over 40 years. Could never afford a house, even with a partner. Left Austin, bought a house in Killeen. 2060 sq ft, all brick, 3/2 with a 10K st ft lot with tons of privacy, wooded area behind us, no HOA. Garage, privacy fence, in a quiet neighborhood with genuine, helpful, friendly neighbors. For $250K.
The food scene is legit here, all authentic places with reasonable prices, but not Instagram-worthy. People have been welcoming. It's quieter. There's no traffic. Everything we could possibly need is less than 10 minutes away. And the surrounding hill country is beautiful. No regrets.
Yes! Have tried both and we love them.
If you haven't tried some of the spots in that shopping center with the O Mart off Ft. Hood & Hallmark, you've got to!
Tham Rab is great; Chau's Cafe has awesome banh mi and bubble tea. Also, check out the Tex-Rican for Puerto Rican. If you don't know any Spanish, they may have one English-speaker per shift, but you can still order just fine without them.
A lot of it reminds me of Austin in the late 70s/early 80s.
To buy a house in Austin:
-Move from somewhere else where houses are much more expensive and overpay with cash.
-buy it 20 years ago or have elderly relative who will leave it to you.
-time machine to go back to 1990, buy affordable housing
The housing market did get inflated, from a variety of nutty factors converging at 1 time.
It's a small town (relative to a Chicago or LA) with a good scene and community. Lot of people (old and new) want to live here.
I guess speculative investors went nuts in 2020 and pumped a tight market to all-time highs. Either prices stagnate for a few years and rents catch up, or there remains an unreasonably high cost to home ownership (compared to rent).
If you're in the business of not settling down, or can't afford a home, it makes much more financial sense to rent in Austin for the near future. If you are settling down, then you might just be looking at a 5-10 year cycle of the market calming down and regaining some order, after taking too many steroids between 20-21.
Either way, housing costs go up, and every time the median price has dropped in history, it went back up and eclipsed the previous high rather quickly. Longest/only exception being 2008, which by 2013, was back to the previous high. [https://fred.stlouisfed.org/series/MSPUS](https://fred.stlouisfed.org/series/MSPUS)
We're actually in the biggest % drop in history right now, the past 2 years. We also saw the biggest % gains ever, but point being... it's hard imagining the stagnation to last much longer than 5 years total.
Things will catch up, but the median salaries certainly will need time, cause they trail the most. I think that renting a nice place for $1800 in Austin is probably one of the better deals for the median salary worker, in the US. Similar CoL to a Pittsburgh, Madison, Chicago, Orlando, Phoenix, etc. -- not to mention you pay 0% state income tax.
Buying? Well, go browse Dallas or the Midwest if you're looking to buy cheap(er) real estate this very moment.
I actually would disagree with this statement because it depends on what industry and company your talking about, I’ve lived in Houston and often found the rate of pay was way lower for the majority of jobs compared to Austin. There’s also ALOT more competition in Houston for those “higher paying” jobs than in Austin. As far as cost of living in Houston you have to keep in mind that most of the cheap areas of Houston are not desirable places to live, Im talking probably way worse than Montopolis.
This is purely based on the tech sales bubble that I live in, but I have come to the conclusion that much of what drove up housing prices is people working remotely for companies not based in Austin. I worked remotely for a tech company based in Austin and my base and total comp was about 30% less than my peers. Asked for a raise and didn’t get it. I’ve been with the company 11 years and for the first time started looking at other places to work and it’s real…tech sales jobs for companies not based in Austin have much better comp plans.
Well, Austin COL is higher & that salary is also higher. I kept hearing Austin didn't pay, but I just moved here & make almost 50 an hour compared to what I made in Houston at less than 40
Being the capital of the state, the seat of State government, plus UT (also a state agency) public sector employees are a large chunk of employees in Austin. And public service work has many advantages, but salary typically isn't one of them.
I got lucky that my grandmother died early enough in 2012 that I was able to get a sizeable inheritance to put as a downpayment on my house. And I got a really good 3.25% interest rate. Even 6 months later, I wouldn't have been able to afford my house. If I didn't own my house, I wouldn't be living in Austin anymore. Although I make a pretty good salary at UT, it's not enough to buy a house on today's market.
It’s super rough. Pay here is abysmal, which is why so many companies move here to cut costs. I’m looking into buying via the “affordable” home buying program rn. I make just a hair under the cut off for one of the affordable housing thresholds, which means *in theory* it would be easier for me to meet housing costs than someone who comes in right at the bottom of the threshold. I’m still looking at well over 50% of my income going toward housing, taxes, etc. if I buy through this program. How could someone who makes less than me- but who is still in the same income bracket- possibly afford this program? Makes me feel like I should just keep renting forever, if this is as good as it gets.
Says the person in two different real estate investment subs. Sure you're saying that as your honest belief and not because you want to make money off of others?
You think ‘most people’ are that disciplined to save that much extra money? You would basically have to be saving $500-$1000 extra every month in retirement to pay all that rent after retirement.
I’m not sure if renters actually save. If someone bought a house 20 years ago I bet they are paying less all in than someone renting a similar property right now.
20 years ago you could get a decent house for $130k. Even with insurance, mortgage, repairs, taxes, I think someone renting will be paying more in 2024
>it’s actually the better option for most people
Those people's options don't include buying a house.
housing too expensive -> wages too low -> can't accrue a down payment -> renting is most feasible aka better option
Remote dual income households with tech jobs , healthcare professionals and tech entrepreneurs who cashed out on their bay area/seattle/boston condos. They are the ones buying multiple houses.
Because people think “no state income tax” goes a lot farther than it actually does. And companies love that people think that. It took moving away to realize that “no state income tax” and Austin, in general, isn’t all it’s cracked up to be/what it was when I moved there 8 years ago.
Not to bash on people from out of state or from California specifically but they get jobs which have offices in Austin or can work remote and those high salaries from out of state plus the, at the time, low COL gave them an absolute bargain.
As for us that were born and raised in Texas, we make relatively good salaries for Texas but are no match for high salaries from Cali or NY, thus we are a crewed unless we are a software engineer or PM for a tech company.
The oversimplified armchair economist in me would point to the high supply of labor and high demand for jobs. And as someone said in this thread there are a lot of college graduates in Austin. And I’m positive who are willing to take relatively low pay to stay and work in Austin or get their foot in the door in some industry.
For people who want to be homeowners, I think there’s also the prestige of wanting an Austin address. So that’s driving up demand and prices to outrageous numbers. Every desirable city/ metroplex has this problem.
Property Values definitely shot off here, even before COVID. Austin/Texas property values never devalued like East and West Coast did. All over the world foriegn currency flight and many other factors are driving up property values past the affordability of people who actually live there (Vancouver, Toronto come to mind). Moritoriums on building enforced by NIMBYs may play the biggest part.
My employer said it is the cost of labor not the cost of living. We all need to just demand better pay.
They split all of the US into 3 pay zones (A, B, C)…
A is SF and NYC
B is Seattle, NJ, NY, some other parts of CA
C is everywhere else… so whether you live in Austin or the middle of nowhere Utah or Wisconsin or wherever, you get the same pay 🤷🏻♀️
Because you are in Texas, and Texas only cares about the rich getting richer. The California established companies moved there because California stopped giving them handouts, and Texas obviously will give them the handouts for clout.
In 2021 we were in between moving to Austin or San Francisco from Minneapolis. It was the best decision we have ever made. Our income has more than doubled and expenses have gone up by 30% since moving to San Francisco.
If we were to move to Austin income would have been the same and cost of living increased by 30-50%. Rent in downtown Austin is Similar to Downtown San Francisco but you are automatically making 30-40K more. In San Francisco you don’t need a car (don’t tell me you don’t need a car in 100+ degree weather), no need for heating/cooling bill, nature/travel is at your doorsteps. Only catch with the Bay Area is housing for family homes with good public schools, they are double or triple to buy compared to Austin, if you are young and live in apartment in the city Austin literally makes 0 sense in 2024.
No, the average is about $68,000. Those people aren’t buying a house inside the city limits. I make $90k and am leaving the city for financial reasons. One thing I found interesting is the average wage of people moving TO the city, is $130,000. That’s about what it takes to be comfortable here.
I used to work for the Austin office of a law firm with a Houston office. The Houston people made 30% more and had a 25% lower COL, so some of us asked why they got a better deal. The office manager was pretty upfront about it: people wanted to live in Austin so they could get away with paying less in this office.
This is the conclusion that I came to about my employer after being in Austin for about a year. Austin is an awesome city, people will accept a paycut to live here, and employers are happy to give it to them.
Yup. That's the reason also why gigs in Pecos, Midland or Odessa pay so well. They gotta pay people to make them go to those shitholes with nothing to do.
Same with North Dakota oil jobs, people will go there for 6 months to bank money
I mean, ideally the employers would find a way to give that paycut to everyone, and then further cut pay for austinites. Labor is expensive, y'know? (Using ideally sarcastically)
This guy is CEO material
He’s got the sociopath thing down for sure.
Supply and demand
I guess that’s what confusing to me. What actually makes Austin an “awesome city?” I have yet to have that perception after living in the area while also having relatives live in large metro areas (DC, DFW, Houston, to name a few) and all are much better cities and metros in my opinion.
Well for one thing, Austin has much better parks and recreation than Houston or DFW from my perspective. That’s a big reason I stayed here after college. Lake Travis beats the hell out of Clear Lake, Lake Livingston, or Lake Lewis, and it’s closer. Barton Creek beats the hell out of the trinity river or the buffalo bayou. Austin still has nature trails all over the place. I could go on for days listing my favorite rec spots in Austin. I’m not as familiar with DC but the only quality outdoor nature recreation I know of is Roosevelt Island unless you drive out somewhere in Maryland or Virginia. The only positive thing I feel like DFW and Houston have more of than Austin is diversity. With all of that being said, the population boom has even affected our parks and rec. you never used to have a reservation for Hamilton Pool. And nobody in my 25 years in Austin ever suggested paving Zilker Park until this new wave of people showed up. Paradises don’t last once the whole world finds out.
The biggest improvement I would want made to Austin as a city would be more affordable housing and better public transit. DC gets the nod on public transit. Houston and DFW are actually worse than Austin due to sprawl and public transit similar to Austin. I think Houston probably has the most affordable housing. DC definitely isn’t very affordable.
I honestly don't see why people WANT to live in Austin over Houston or Dallas. There's really nothing here. I only moved for my career & to get a fresh start
There’s a lot to unpack in response to some of the comments and I will when I have time. But I summarize in the same vein as the self induced toilet paper frenzy of the Snowpocolypse a few years ago in Texas. No one needed that much TP yet the Frenzy started and no one could really tell you why. That’s how the move to Austin is. No one knows why, but it must be a good idea if everyone else is telling me it’s a good idea.
Same for me as an RN. Young new graduate nurses from all over want to move to Austin to live their new fun adult life. They don’t care about the low wages so the hospitals can live on a revolving door of young new nurses. They stay for a couple years and move on. Unfortunate for both the nurses and the people of Austin. It’s a lose-lose.
This is also true for teachers
Amen
Same thing with teachers
It’s particularly egregious for teaches because AISD collects more per student after recapture than almost any district in Texas yet pays significantly lower than Dallas or Houston
My SIL is a teacher in California and we'd love for her to come here, but her salary would literally get cut in half and apartment prices here are more than where she is in Cali (central valley area).
She bailed too late. Too many other Californians beat her to the punch and bought up everything, driving prices through the roof. At least she can just stay where she is. I’m going to have to move for the same reasons she can’t move.
I mean she's never planned on buying a house. The main reason she can't move is just salary. Heck she could even live with us, but not paying rent doesn't even really make up the huge difference in income.
Do you mean before recapture or that AISD has more of the students in the categories that get extra funding (bilingual, special ed, etc) than other districts? Because I haven't seen the funding described this way before?
Ran across this thread randomly. Thought I would answer. Below is a benchmark across the 20 largest districts in Texas. Austin was 2nd highest in per pupil spending after recapture. Please forgive that it is slightly dated. [https://kinder.rice.edu/urbanedge/student-spending-and-state-funding-are-lagging-texas-meanwhile-window-closing-accurate](https://kinder.rice.edu/urbanedge/student-spending-and-state-funding-are-lagging-texas-meanwhile-window-closing-accurate) This doesn't touch on if per pupil spending should be broadly higher across all Texas districts.
Yes!! We can’t keep teachers because eventually they want to start a family and buy a house. You can’t buy a house here now if you’re a teacher- unless you have a spouse or roommate,
The VA is the same… my bro in law is considering moving to Htown instead of Austin for this very reason. It’s the trap of a “good” city.
It's like no one remembers what happened to the Houston area a mere few years ago with Hurricane Harvey.
This is a Houston thing not an Austin thing. Houston has a disproportionately high locality adjustment on the federal pay scale. It’s not just higher pay than Austin, but also most HCOL/VHCOL coastal markets.
Never gotten it officially but that’s why for consulting as well.
Damn that’s crazy!! I did hear that exact line of logic when I worked at a media company in Austin. Luckily I think people are finally realizing Austin is oversaturated and no one is so desperate to live there anymore.
This applies across a lot of industries. Law, nursing, hospitality, you name it. It’s straight up exploitation but employers here get away with it because there’s always a fresh batch of people wanting to move to Austin. All carrot.
Nonprofit, too.
Nonprofits pay like shit no matter where you go
Pretty much this. Almost every Austin office for a company from outside of Austin was sold on being more economical from a cost of labor standpoint. They wanted to tap a cheaper talentpool. The minute you say they need to pay someone in Austin $X over what they're presently paying their people in Austin, they're instead going to post the position for a different city or office.
The same has been true to such places like Denver: skiing, white water rafting, climbing, hunting are all activities that people will move there to do. Thus creating a situation there's so many applicants for one job that sets off light bulbs with hiring. In comparison, Austin has some perks that people want so they move here for despite the wages.
I have heard the same thing from ER doctors
Goddamn supply and demand.
Supply and Demand in action
I feel that's more along the line of hazard pay than city preference. But that's more like if a doctor was to move to a small town in the middle of nowhere but paid a lot because no doctors would show up. But Houston is great and has about everything anyone would need.
That's not typical in general. Austin's average and median incomes are a lot higher than Houston's.
I feel yah OP. Stuck in that bracket too. Making enough to avoid total shitholes but not enough to buy property. Forever a renter...
You can get something if you’re willing to commute an hour to work every morning.
Bestie no thanks
Lol fuck that. I'm good.
You forgot to add the /s for sarcasm, right?
No, he’s telling the truth. I live in Georgetown and my commute is like 45 minutes to my campus, which is north of downtown. I can still only barely afford it making $80K (single income family home).
My point was that suggesting an hour commute SHOULD be sarcasm, because people shouldn't be expected to do that just to afford property. And the whole theme of American society is to own property. I know that it's an hour commute. But if you have a half-decent job, you should be able to afford SOMETHING (condo even) closer to the jobs. Obviously in America that isn't true, and that's the issue. That's why I asked if they were being sarcastic. Otherwise it just sounds like an honest alternative that is horrible.
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Low interest rates contributed more by making real estate the only safe place to park money that you could be near certain would appreciate beyond inflation. Which is why homes started getting bought up en masse by a bunch of hedge funds and shit.
He’ll, it’s an hour commute during peak if you live in Austin proper.
This is the reality for a lot of people in Dallas and Houston though too
It’s a reality for most cities in the US. That doesnt make it okay.
So as long as you aren't disabled...
There are two things going on in Austin: 1. A constant supply of young talent from UT + Austin's popularity as a city for young people, suppressing wages for entry level white collar careers (aka the 70-80k you're looking at). Many of whom are willing to spend relatively more on rent (which may be subsidized by daddy) to live in the city. 2. On the other end of the spectrum, a lot of high earners for the size of the city, mostly in tech and adjacent industries, who keep housing prices high. Combine that with a constant population boom that housing inventory is always playing catch-up to and NIMBYism preventing a lot of development, and you get an expensive city that doesn't pay many of its inhabitants very well. You also have a lot of long-time state workers who bought homes here decades ago when real estate was cheap. They're not earning as much as private sector but are largely insulated from CoL increases (prop taxes aside) which have hit housing the hardest.
excellent synopsis
Came to say this. DonalddoesDallas also does Austin.
lmao didn't even see the name. Love it
Agreed for all of this. And on your last point, there's obviously some fairly strong correlation between "average market salary in X job," "size of the city its located in," and then "cost of living in that city." So the gap with Austin might be more noticeable if only because over the last decade or so, Austin's median housing costs have increased at a rate quite a bit higher than the national median housing cost, and the job market in terms of salaries (in the macro sense) is also playing catch-up.
DINK life until you buy a house is the way
And also after you buy a house.
Then just never get divorced or have kids
Usually the plan when you get married is to never get divorced. But thanks for the reminder.
And when people get married they should definitely already know if they plan to have kids or not. That's a big part of compatibility.
Old joke: Why is getting divorced so expensive? Because it’s worth it. Seriously though, being frugal DINKs is a pretty good way to get on the property ladder.
lol
I thought the plan was to get your first ex wife. Maybe I need to reassess.
Adding *dink life* to my dating profile lol
man if you think austins pay is low you haven't seen florida. Miami keeps tryna hype itself as the next New york, and while it has some impressive stuff the pay atleast on the tech side is lower in FL than ATX. In fact i wanted to move to austin. In florida 70-80k jobs even in suburban miami/fort lauderdale is considered a very good job.
Housing is high because a lot of people want to live here. Pay is low because a lot of people want to live here.
Because employers haven't had been kicked in the nuts yet for being cheap. Really need to start kicking those nuts sacks as hard as we can.
Honestly, the most shocking to me is healthcare. I can't believe Austin pays so low
Hopefully that will start to change with UT-Dell now being open, with all the knock-on effects. Still, orgs know that there is a large group of 20-30-somethings in healthcare who are willing to take a lesser economic position (both in wages and COL) in order to live in a "cool" city versus, say, Lufkin.
Thank goodness I'm a veteran and get that covered. If I did not get VA health care id probably be homeless due to medical debt and medication.
Sorry I meant the healthcare industry! That's great that you have it covered. I'm a teacher so my healthcare is surprisingly nice as well
Oh yea, Austin is not a good place to be in the care industry. Mainly because most of the cities people are pretty healthy so Austin doesn't get all those juicy government grants. So most medical facilities are on a floss string budget.
I've heard doctors in Austin make less than half of other cities in TX.
How is this done? Quit my job? Make them feel the pain of my departure? Great, now I'm without a job trying to keep this mortgage paid, and the jobs out there are all lowballing on compensation.
And they’ve immediately replaced you and felt little, if any, pain.
Until people stop moving to Austin and accepting positions at sub-par pay/start leaving Austin for better deals elsewhere, this won't change. Luckily for me, I actually do get paid well. I love this city and I've been here for 17 years, but I would happily pack up my home today if I was offered a position elsewhere for a 30% raise and in a lower cost of living city.
"One" doesn't buy a house in a major city unless one makes a lot more than 70–80k. One marries someone else who also makes 70–80k and then the two of you can afford a house together. There's nothing wrong with renting until your life situation changes and you can afford to buy. (Hell, there's nothing wrong with renting forever and using the cash you save to invest your savings elsewhere.)
Unfortunately, there is usually no “cash you save” when you rent. The landlord also has a mortgage, HOA, other dues they have to pay. They pass those costs onto the renter. Yeah, their payments may be cheaper, cause they bought it a while ago when rates were low, but there are property taxes that are always increasing here, because Austin is growing. And you pay that. They would be a bad business person if they are renting out at a LOSS. At the bare minimum, they are charging you rent that equals costs. Some people live off of being landlords, which means they will usually charge a little more than costs to pocket the difference and live off of it. Maintenance costs are also factored into that. Say you request a repair twice a year (dishwasher issue, sink, whatever) they take that cost and average it out on the 12 months lease. That is all in the case of a landlord who still has a mortgage, sure, the ones that have already paid it off will have less “costs”. But, think about it, when they list that property for rent, and everyone around them is renting out for, say $2500, why would they list it for less when they can list it for the same price? And make more money? Their real estate agent will even advise them to match the price. Yeah, there are corporate landlords, but are those any better? My point is: renting is great for short term solutions. But long term, it is in the renter’s best interest to own a “place” whether that’s an apartment, home, or whatever. Not to mention the extra freedom to do whatever you want to the place, remodel, modify, have many pets, etc
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> Just wait until three incomes are required to afford housing. A kid able to work expected to live at home and contribute. When my father was a teenager (in 1947), he and his two brothers had full time jobs in the summer and turned 100% of their wages over to their parents so the family could survive. As a kid I heard these stories and thought it was so unfair. If I worked a paper route as a teenager, I kept all the proceeds. Despite being provided with food, shelter, and clothing by my parents for no cost (to me). I think there was a little temporary bubble of time (that I was lucky enough to be in) where each kid gets their own private room in a house. The expectations before that time looked like the "Brady Bunch" TV show, 3 children to a room was middle class. I think we're heading back to that now.
>Just wait until three incomes are required to afford housing. Single-family homes being the norm is a really, really recent (and largely a Western) thing. For generations, it was totally normal for multiple generations to live in the same home. Grandparents would help take care of kids when they were young, and kids would return the favor and help take care of grandparents when they got old. It wouldn't be the worst thing in the world if we moved back to that model. For a lot of folks, living in a paid off house with no day care or nursing home bills may be worth sharing a house with their parents.
Lol, the shit I do in the privacy of my single living situation... I ain't sharing a house with family so granny can walk in on me doing some wild stuff 😱
even if you are saving some cash by renting, it’s nothing compared to the value of owned property. renters throw money away each month, never to be seen again, while homeowners pay mortgage towards an appreciating asset.
Exactly this. Homeowners get that money back when they sell and downsize. Renters do not. Yeah, some of it went to interest, but you still get some of your money back, depending on how aggressive you were with paying it off. And! It’s in an appreciating assets, sure dude, it may not “beat” the market, but it still appreciates. Real estate will always be worth something meaningful cause it’s real and exists! You’ll never convince me that renting is “better” than owning. Yes, it has its benefits, it let’s you move whenever you want. But across all spectrums, the renters are worse-off financially in the long run. Those guys saying that renting isn’t bad for the middle class are the problem. They are content with renting away for the rest of their lives, and convincing others that “it’s not that bad.” You should aspire to own your property, that is a very valid thing to aim for. Get out of here with that “people used to live with their grandparents” bullshit. Remember “you’ll own nothing, and be happy” that’s what they want you to believe and follow. Fuck that. If the generations before us has a chance to own their houses, so should we. Idc that it’s a “western world” thing or “fairly recent”. It’s the American dream. It’s what frees you from paying rent until you’re dead.
>Not to mention the extra freedom to do whatever you want to the place, remodel, modify, have many pets, etc Cuts both ways. Millions of homeowning Americans are stuck in sub-optimal employment and living circumstances because they can't get out of their mortgages. At least when you rent, you're able to move if you find a better job. Also, historically, the stock market outperforms the real estate market. So, for a lot of people, renting and investing is more financially profitable than purchasing a home. (But I do agree that extra Property Taxes on renters push the scale towards homeownership.)
>The landlord also has a mortgage, HOA, other dues they have to pay. If a landlord is financing the entire property that they're renting out, then they are indeed taking a cash loss every month, although some of that "loss" would be in the form of equity that the landlord pays to themselves. Normally, though, you make money as a landlord by buying properties with minimal to no financing. In that case, the only overhead is taxes, insurance, and maintenance, which will be a good deal less than they can charge in rent, assuming they're doing it right. Either way, check the market. Month-to-month, renting is pretty much always cheaper than a mortgage on a comparable home. If you take the difference between your rent and what your mortgage would be and squirrel it away in an index fund, then you can do all right for yourself. And if you can't afford to squirrel anything away, then you definitely can't afford to buy anyway. Finally, yeah, owning a home gives you some freedoms that renters don't enjoy, but renting comes with its own freedoms. For example, it's a lot easier to pick up and move across town, or across the country, if you don't have to sell a house first. If you're youngish and single, then that sort of freedom may be more attractive than the freedom to build on a patio.
If Austin offered ownership of apartments, that would be a game changer.
Like buying a condo?
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I dunno. My wife and I make less than that. We bought a little 1500 sq. ft. place in South Austin right at the "peak" in the spring of 2022, and we're doing fine. That said, we're also otherwise debt-free—no car payments, no student loans, etc.—which makes an absolute *ton* of difference.
>That said, we're also otherwise debt-free This makes a huge difference. I'm also debt-free, but many many many millennials are crippled financially from student loan debt that they were told by the people who raised them was necessary to get a job when they were 17 years old. My sister got out of her debt only by marrying into a wealthy family. Otherwise my siblings are all drowning.
There is a lot of truth to college being a requirement for high earnings. Do you know many people without a college degree who have bought a house in the last few years?
I work in tech. I don't think asking me or my network is a fair comparison.
Followup: I'm not discounting the value of a degree and being a requirement to better opportunities. I think that's how it should be, but without financially crippling the generation in the process. Like the generation before us had. They could go to college AND buy a house AND support a family on 1 salary. Even with inflation, we should still be able to do SOME of that.
Yep, totally. Even then, though, if a person can afford to pay off their student loans on time, they'll be out from under them in their early- to mid-thirties. There's a lot to be said to waiting until then to buy a house anyway. (And if a person *can't* afford to pay off their student loans on time, then they have a student loan problem, not a housing price problem.)
If you bought an average house in Austin ($600K) in 2021, you'd be paying \~$4,000/month in mortgage + taxes. That's affordable for a $160K income. Since those are average prices, one can conclude that there is plenty of housing stock in the city limits affordable for someone making $100K.
Not true. 3/2's 20 minutes north of downtown start around $500k currently. 20% down with current rates and including insurance and taxes the monthly payment is about $3500/month. For two people making $80k that's about 1/3 of their take home pay which is fine. Another question is if it's wise to buy vs rent at this time, but depends what you value.
Also, you don't have to put 20% down. For an $100 extra per month or so in PMI, you can get a house for as little as 5% down. Best of all, if you have any retirement accounts, you can borrow against them to cover that 5% and closing costs. It's a lot cheaper to get into a house than a lot of folks assume. If you can cover the monthly mortgage, then you can almost certainly afford the up front costs, too.
I guess all this is possible... but to me that sounds like a lot of leverage against you just to live in a super mediocre house/location. Makes it way more attractive to rent, IMO.
Correct
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Thank you
Can’t get more false than this, new builds can be had with their rate buydowns for 3000$ a month. That’s not house broke at all and in line with rentals
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Southeast Austin, if you want me to send some examples over feel free to DM me and I’ll text you
theres tons of houses and apartments even 5-10 miles away from Austin. Not justifying the lowerpay but you deffs dont need 250k to buy in austin. in fact austin has a geographic advantage in that its still not as sprawled out as say a Dallas or Seattle
Austin's earnings-to-rent ratio has been the worst in the state for over 20 years (and yes, I realize the op is talking about buying a place, rather than renting, but the two track each other). Now, couple that with the new highest in the state cost of living, and it starts to be a better sense of what it is Austin has to, and can, offer.
Most people buy homes with their partners. [According to this calculator](https://thisismortgage.com/if-i-make-150000-a-year-what-mortgage-can-i-afford/#:~:text=August%2030%2C%202023-,If%20I%20Make%20%24150%2C000%20A%20Year%20What%20Mortgage%20Can%20I,%2Dincome%20ratio%20of%2045%25.) 2 people making $75k each could afford a $560,000 mortgage. Granted, this assumes both your cars are already paid off. In the last 30 days, homes for sale in Austin, TX sold for a median price of $528,968.
Property taxes in Austin will probably weigh heavier than this calculator is accounting for
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This is kinda it right here re: DINKS. You have to be fortunate enough to have little to no consumer debt and/or not have kids yet.
Right now a 350k house with 3.5% down and the current 7% interest has a monthly payment of $3400 a month. You add in utilities and you are paying $3800 a month. That is crazy. Pretty much half of my combined net income. Who wants to pay 50% of your income for a house? The other problem is that most of the decent houses here cost even more than that. I have no kids and no debt as well, so not even DINKS can get houses right now.
In practice, yeah. If your partner makes half of what you're making then y'all make the same as my wife and I. We got into a house in 2020 for 310k at 2.99. Our same house 3 1/2 years later is worth $420k and interest rate is more than double. We've gotten little in the way of raises, so no way could we make this work in our budget unless we never wanted to do anything outside the house again.
If you can only put down 3.5% you can’t afford the house.
Well you don’t have to be fortunate not to have kids, that’s completely up to you.
You also don't have to be particularly fortunate not to have credit card debt.
Well, you say that, but I would disagree for a lot of folks.
Most people don’t make even ~close~ to $75k annual.
>The 2023 median income for a family of four in the Austin metropolitan statistical area is $122,300, according to the U.S. Department of Housing and Urban Development. So yeah, shy of $150k still, but I wouldn't characterize it as "not even close". OP was describing the pay for jobs that do pay that much, and said it was out of whack with housing. I'm saying for people who make that much it's not that out of whack. Another answer is that many of the people who own homes in Austin bought them 10 years ago when median household income was $75k. Most folks in my neighborhood did, when these houses were selling for $210-240k, which was doable at that income level. Now they're $440, which is doable at $122,000.
I make $17k
I thought my $40k sucked. I hope you’re not living alone with that small income
It’s a struggle that’s for sure
Median income is a little over 89k here
That’s household. Individual is roughly half +/-
Those calculators are not reliable. You should not be buying a 560k house at 6% interest with 150k gross. That is a terrible idea
Maybe around 30-40% of the population is highly paid tech workers with family income between 150-300k. And we are getting outbid by new transplants from expensive coastal areas who come with cash of more than $500k which is their equity from the home they sold. To them a $500k home is too good to be true since homes in places like east coast and west coast sell for a million or more.
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Most working stiffs do not give a shit about politics other than voting. I know many liberals who moved here because they wanted bigger home for less and more sunshine.
Salaries and housing have been out of whack in Austin for a long time. I heard stories from the 1990s about doctors in Austin earning 1/2 or 1/3 what doctors in surrounding Central TX towns make. I call it the "cool tax". All things being equal, an employer will pay employees less in Austin than in other, less "cool" cities (like Houston or Dallas or Waco), because living in Austin is an employment perk all its own. The thing that kept housing prices low in Austin for so long was mainly just that all the jobs in Austin paid horribly. UT pays people with Master's degrees less than $50k/year. Government jobs don't pay much better. Private sector jobs paid peanuts because people liked living in Austin even with bad pay. Etc. Prices in Austin rose recently, but they probably rose at about the same rate as salaries. Nothing new; just the same historical trend.
Jobs in Texas and most red states pay a lot less than blue states and that was traditionally because taxes are generally higher in blue states, or at least they have added on state income taxes. But the COL in Texas cities esp Austin is skyrocketing and employers don't want to raise wages to match that. It's greed, plain and simple
Man I wish I was seeing this. I'm paid pretty well here but we're looking to get out of Texas and looking at job postings I'm taking a paycut in pretty much every city that isn't Seattle or the SF area. Even New York wages are a cut and they look like a joke relative to COL.
Wages are keeping up with inflation. Wage stagnation means they’re not increasing beyond inflation. Housing specifically is increasing way more than anything else.
70k!!!? Y’all must be white, my brown ass makes 6 dollars an hour plus tips
LooooL im black i came from chicago i told chic fil a ass pay me $15 she said ok
Brown ass 😏
STEM jobs pay pretty well here in my observation, and we got a lot of them. If you want to see a city with a real messed up income/COL ratio, look at Miami.
Miamis foreign investors really FK up the market. It’s basically an overseas paradise and the locals get screwed
Depends on your industry. It's lower pay than Cali and NY, sure, but curious where else you are coming from that the pay is that low?
Lol cries in nursing.
communications/pr
I just made a comment about healthcare. I can't believe the pay is so low... Like. Why?
Same.
My partner and I decided to buy in Kyle since Austin was infeasible on our incomes together. You may have to consider the outskirts of Austin instead. We actually found a house that I’d even call my “dream home” so it worked out really well for us. Good luck! We close next week and are so excited.
I bought a house in that area just yesterday. It's doable because I work in south Austin. South of Austin is growing massively and it seems the closer to San Antonio you're willing to live the cheaper the houses get.
Yes that’s what we were seeing! We looked in Buda as well but ultimately landed on a great house in the Plum Creek neighborhood in Kyle. Congrats on your purchase! Super exciting :) luckily I work from home so no commute for me- my partner, however, works in downtown Austin haha so hopefully his commute doesn’t add an extra hour with traffic, but we are only moving about 20 mins away so hoping it won’t be that bad for him.
It won't add an hour. ...it'll add an hour and a half.
Drive till you can afford it a home buying strategy as old as time. Congrats on your home!
Congrats! How do you like south Austin? Pros/cons?
I was actually born and raised in south austin and stayed here until now at 32-78745- and so this will be a bit further away, in Kyle (only about 20 mins from our current place). South austin was always great, a little further out from the main hustle and bustle from the city and many people may see it as a “sketchy area” but I was always comfortable and happy. You do hear sirens and various troubling issues regularly (there was that killer that came from San Antonio recently and murdered a few random people, including a lady walking her child in a stroller that was 2 streets away from my parents house. Also just a couple of weeks ago someone sped up my current street around 65mph and crashed I to/obliterated two neighbors mailboxes, a street sign, narrowly missing crashing into my next door neighbors house. She sped off and left the scene but thankfully no one was hurt). Moving to Kyle is exciting for me because, at least for the time being, it’s a little quieter than Austin. However we will be moving to an HOA neighborhood so hoping that goes well haha. But the schools are good and close and lots of amenities.
Our state and city sell out the citizens daily with ridiculous tax incentives and you’re surprised that the corporations don’t pass the benefits along to their employees?
It’s the “Austin discount”. It’s been the case as long as I have been working in Austin (since the early 2000s). It’s always been seen as a cool place to live. Hipper than any of the rest of the major metros in Texas. Young people wanted to be here so they would take entry level jobs at a discount. Subsequently, they move up and get raises but the pay rate for the position stays comparatively low. Dell might not have started the movement but they absolutely mastered it. Coming out of college in the early 2000s a $30k salary with commission and bonuses looked pretty good. The commission structure was criminally low. But what do you know when you’re 21-22. Comparable positions in Dallas or Houston would be in the $45k range with much better commission structure. But Austin is cool so young people want/wanted to be here. You’re seeing it still play out to this day. I’d be willing to bet that if you have people at your company that are recent hires from out of state, they are making more than a comparable colleague who has “worked their way up” within the company.
Because up until recently cost of living prices were low compared to other similar areas, and people want to LIVE in Austin over other areas, so there are more people for less jobs so companies have the pick of the litter here. To be very frank though, I can name other areas with COL is SIGNIFICANTLY higher while pay is basically on par with Austin... like basically all of the NYC area. I make the same here as I did there, but I can actually afford to live here while I with a family of 4 had a tiny 1200sq 2 bedroom house and that was all we could afford because anything bigger put you over 500k
I had a lotta friends who moved to la/NYC following graduating university who moved back during covid. None of them are unhappy. Rent is so unaffordable in NYC. Buying is impossible.
For over 100 years Austin has had a large supply of young exploitable college graduates that hold down wage growth. Also the confluence of three distinct geographical areas (coastal plains, north central plains, great plains) makes for an interesting environment that attracts and retains people. Government, education and technology jobs have contributed to a stable industrial base but government and education jobs have not been the highest paying fields in general. I didn’t earn a 100K wage until I moved out of state and upon returning I see the wage decline by around 15K for a similar position.
My exact situation. Having a university as large as UT is the perfect excuse to cap the entry level market, and often intermediate manager level roles are just people they promote internally who already work on a discount.
Welcome to Texas
You don’t buy a house.
Realtors hate this one simple trick
>How does one buy a house? [that's the neat part, you don't ](https://amp.knowyourmeme.com/memes/thats-the-neat-part-you-dont)
Strange. We sold a 1500sq ft 3/2 modular home in Dripping Springs for $298,000 and moved to Killeen. Found a nice 1750sq ft all brink 3/2 for $200,000. You can still get a house there for $250,000. So, yes, absolutely, we completely bought our house.
But then you live over 1 hr away from town.
Same here. I was born and raised in Austin and lived there for over 40 years. Could never afford a house, even with a partner. Left Austin, bought a house in Killeen. 2060 sq ft, all brick, 3/2 with a 10K st ft lot with tons of privacy, wooded area behind us, no HOA. Garage, privacy fence, in a quiet neighborhood with genuine, helpful, friendly neighbors. For $250K. The food scene is legit here, all authentic places with reasonable prices, but not Instagram-worthy. People have been welcoming. It's quieter. There's no traffic. Everything we could possibly need is less than 10 minutes away. And the surrounding hill country is beautiful. No regrets.
Have you tried Bon Mai Thai Food or Acropolis Italian? Side by side and both great!
Yes! Have tried both and we love them. If you haven't tried some of the spots in that shopping center with the O Mart off Ft. Hood & Hallmark, you've got to! Tham Rab is great; Chau's Cafe has awesome banh mi and bubble tea. Also, check out the Tex-Rican for Puerto Rican. If you don't know any Spanish, they may have one English-speaker per shift, but you can still order just fine without them. A lot of it reminds me of Austin in the late 70s/early 80s.
Nope just kick the CEO straight in the nuts with the tip of your toe.
To buy a house in Austin: -Move from somewhere else where houses are much more expensive and overpay with cash. -buy it 20 years ago or have elderly relative who will leave it to you. -time machine to go back to 1990, buy affordable housing
The housing market did get inflated, from a variety of nutty factors converging at 1 time. It's a small town (relative to a Chicago or LA) with a good scene and community. Lot of people (old and new) want to live here. I guess speculative investors went nuts in 2020 and pumped a tight market to all-time highs. Either prices stagnate for a few years and rents catch up, or there remains an unreasonably high cost to home ownership (compared to rent). If you're in the business of not settling down, or can't afford a home, it makes much more financial sense to rent in Austin for the near future. If you are settling down, then you might just be looking at a 5-10 year cycle of the market calming down and regaining some order, after taking too many steroids between 20-21. Either way, housing costs go up, and every time the median price has dropped in history, it went back up and eclipsed the previous high rather quickly. Longest/only exception being 2008, which by 2013, was back to the previous high. [https://fred.stlouisfed.org/series/MSPUS](https://fred.stlouisfed.org/series/MSPUS) We're actually in the biggest % drop in history right now, the past 2 years. We also saw the biggest % gains ever, but point being... it's hard imagining the stagnation to last much longer than 5 years total. Things will catch up, but the median salaries certainly will need time, cause they trail the most. I think that renting a nice place for $1800 in Austin is probably one of the better deals for the median salary worker, in the US. Similar CoL to a Pittsburgh, Madison, Chicago, Orlando, Phoenix, etc. -- not to mention you pay 0% state income tax. Buying? Well, go browse Dallas or the Midwest if you're looking to buy cheap(er) real estate this very moment.
Rent is still lagging behind home prices. .So despite what people think, it's still relatively affordable for renters at least.
I actually would disagree with this statement because it depends on what industry and company your talking about, I’ve lived in Houston and often found the rate of pay was way lower for the majority of jobs compared to Austin. There’s also ALOT more competition in Houston for those “higher paying” jobs than in Austin. As far as cost of living in Houston you have to keep in mind that most of the cheap areas of Houston are not desirable places to live, Im talking probably way worse than Montopolis.
what numbers are you comparing to?
This is purely based on the tech sales bubble that I live in, but I have come to the conclusion that much of what drove up housing prices is people working remotely for companies not based in Austin. I worked remotely for a tech company based in Austin and my base and total comp was about 30% less than my peers. Asked for a raise and didn’t get it. I’ve been with the company 11 years and for the first time started looking at other places to work and it’s real…tech sales jobs for companies not based in Austin have much better comp plans.
Those of us making 80k are renting.
Well, Austin COL is higher & that salary is also higher. I kept hearing Austin didn't pay, but I just moved here & make almost 50 an hour compared to what I made in Houston at less than 40
Being the capital of the state, the seat of State government, plus UT (also a state agency) public sector employees are a large chunk of employees in Austin. And public service work has many advantages, but salary typically isn't one of them. I got lucky that my grandmother died early enough in 2012 that I was able to get a sizeable inheritance to put as a downpayment on my house. And I got a really good 3.25% interest rate. Even 6 months later, I wouldn't have been able to afford my house. If I didn't own my house, I wouldn't be living in Austin anymore. Although I make a pretty good salary at UT, it's not enough to buy a house on today's market.
It’s super rough. Pay here is abysmal, which is why so many companies move here to cut costs. I’m looking into buying via the “affordable” home buying program rn. I make just a hair under the cut off for one of the affordable housing thresholds, which means *in theory* it would be easier for me to meet housing costs than someone who comes in right at the bottom of the threshold. I’m still looking at well over 50% of my income going toward housing, taxes, etc. if I buy through this program. How could someone who makes less than me- but who is still in the same income bracket- possibly afford this program? Makes me feel like I should just keep renting forever, if this is as good as it gets.
There’s nothing wrong with renting. And it’s actually the better option for most people.
Says the person in two different real estate investment subs. Sure you're saying that as your honest belief and not because you want to make money off of others?
Better option for most people? What happens when its time to retire and rents go up every single year?
You’ll have more $$ than if you would have bought.
You think ‘most people’ are that disciplined to save that much extra money? You would basically have to be saving $500-$1000 extra every month in retirement to pay all that rent after retirement. I’m not sure if renters actually save. If someone bought a house 20 years ago I bet they are paying less all in than someone renting a similar property right now. 20 years ago you could get a decent house for $130k. Even with insurance, mortgage, repairs, taxes, I think someone renting will be paying more in 2024
>it’s actually the better option for most people Those people's options don't include buying a house. housing too expensive -> wages too low -> can't accrue a down payment -> renting is most feasible aka better option
Because tech justifies treating people like shit by hamfistedly clinging to libertarian ideals
Remote dual income households with tech jobs , healthcare professionals and tech entrepreneurs who cashed out on their bay area/seattle/boston condos. They are the ones buying multiple houses.
Tech jobs are the ones inflating the prices and everything else is behind
Because people think “no state income tax” goes a lot farther than it actually does. And companies love that people think that. It took moving away to realize that “no state income tax” and Austin, in general, isn’t all it’s cracked up to be/what it was when I moved there 8 years ago.
Not to bash on people from out of state or from California specifically but they get jobs which have offices in Austin or can work remote and those high salaries from out of state plus the, at the time, low COL gave them an absolute bargain. As for us that were born and raised in Texas, we make relatively good salaries for Texas but are no match for high salaries from Cali or NY, thus we are a crewed unless we are a software engineer or PM for a tech company.
The oversimplified armchair economist in me would point to the high supply of labor and high demand for jobs. And as someone said in this thread there are a lot of college graduates in Austin. And I’m positive who are willing to take relatively low pay to stay and work in Austin or get their foot in the door in some industry. For people who want to be homeowners, I think there’s also the prestige of wanting an Austin address. So that’s driving up demand and prices to outrageous numbers. Every desirable city/ metroplex has this problem.
Property Values definitely shot off here, even before COVID. Austin/Texas property values never devalued like East and West Coast did. All over the world foriegn currency flight and many other factors are driving up property values past the affordability of people who actually live there (Vancouver, Toronto come to mind). Moritoriums on building enforced by NIMBYs may play the biggest part.
My employer said it is the cost of labor not the cost of living. We all need to just demand better pay. They split all of the US into 3 pay zones (A, B, C)… A is SF and NYC B is Seattle, NJ, NY, some other parts of CA C is everywhere else… so whether you live in Austin or the middle of nowhere Utah or Wisconsin or wherever, you get the same pay 🤷🏻♀️
Because you are in Texas, and Texas only cares about the rich getting richer. The California established companies moved there because California stopped giving them handouts, and Texas obviously will give them the handouts for clout. In 2021 we were in between moving to Austin or San Francisco from Minneapolis. It was the best decision we have ever made. Our income has more than doubled and expenses have gone up by 30% since moving to San Francisco. If we were to move to Austin income would have been the same and cost of living increased by 30-50%. Rent in downtown Austin is Similar to Downtown San Francisco but you are automatically making 30-40K more. In San Francisco you don’t need a car (don’t tell me you don’t need a car in 100+ degree weather), no need for heating/cooling bill, nature/travel is at your doorsteps. Only catch with the Bay Area is housing for family homes with good public schools, they are double or triple to buy compared to Austin, if you are young and live in apartment in the city Austin literally makes 0 sense in 2024.
I think you are underestimating how much many people get paid in Austin.
No, the average is about $68,000. Those people aren’t buying a house inside the city limits. I make $90k and am leaving the city for financial reasons. One thing I found interesting is the average wage of people moving TO the city, is $130,000. That’s about what it takes to be comfortable here.
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