All Forum Posts by: Kent Ford

@Kent Ford 100% Austin has really transformed in last 11 years I have lived here. There has been some market correction in terms of home values this year. Overall Austin is currently a Buyers market but there are some neighborhoods that are Sellers markets due to good schools, accessibility to Tech hub job areas, parks, entertainment etc. My house more than doubled in value and so I don't see prices going down to the levels they were a few years ago. Most people tend to hang onto thier homes as an asset

I suspect Texas and Florida both have peaked and for most small time investors who have missed that boat it's time to find the next market that is up and coming. 

Location matters a great deal. When it comes to rentals it effects the rent pricing and how competitive an area can be. A factor I am frequently discussing with clients is the nature of our current market shifts in Texas. For example, if you buy in a semi-rural area or suburban area the pool of applicants can be much smaller and with an increase in supply it creates a downward pressure on prices and higher days on market averages. I've seen new build developments where 10+ units are for rent all at similar prices and sit for months. On the flip side I've seen neighborhoods where we manage multiple units and the house is leased in less than 2 weeks. These examples occur in the same city or surrounding metros. Location is very important. Speak to real estate agents in the areas you are interested in but also speak to property managers who can give you a sense of the rental market and analysis of pricing. 

Apple , Tesla, Google, Samsung amongst other Tech giant companies have chosen Austin TX as thier city. Tech money is making Austin an interesting anomaly type of city in Texas. 

Add on ACL, Formula 1 and the once upon a time affordability of the area then you get what the gist is with Austin. Plus international buyers specifically from Mexico, Canada, China, Brazil, India tend to invest in Texas or Florida.

 I would say in many cases price matters most.  A good deal is a good deal, however with that said you also have to resell the property so you have to be in a place where people have money, access to credit, and want to live.   Both options have their own challenges.   Buying in small towns can also limit you access to trades or they charge you more for the trip.  It is also nice to have competition and a back up plan with trades.  Buy in Austin, Dallas, Houston and you can get bids for work from 2 dozen contractors.  Buy in super small towns and they may not have a plumber, electrician or HVAC person who even wants to visit your project?

Any place you are specifically buying?   Another consideration to me, is buy where you know best.  Where you know the prices, you know what is coming next.   Where you know the market and know the people.

 Tennessee can be a good one, even though they are also no state income tax. Alabama is also a good balance. The reality is you can make it work anywhere, you just need to understand the market and the numbers.  

@Kent Ford Austin got hit by a combination of factors, but only because it was also the highest appreciating market nationally during 2020-2022. Austin nearly doubled in median home value in 24 months. As you stated, that leads to higher property taxes and higher homeowners insurance as well, and when combined with higher property values and a 150% climb in interest rates, it compounds affordability issues. There are some positive signs on the horizon. The home values have given back approximately 50% of their COVID highs from where we started in Jan 2020. On top of that, demand isn't really the problem, it's simply new supply having to get absorbed. Austin is still in the top 3 markets for apartment absorption rate, it's just that we added 60,000 new units in 2 years, so it will take a few years to get the supply and demand balance in check. It's not a cheap market anymore, but still has some strong business and population growth tailwinds.