Buying a House in Austin in 2016
Posted by Brad Pauly on Thursday, October 22nd, 2015 at 3:00pm.
Austin has grown fast in 2015 and experts predict it will grow even faster in 2016. Housing opportunities abound as new jobs are being created all over the city. Austin residents' loyalty to local business allows them to provide lots of employment. Budding technology companies offer jobs to Austin's huge business and technology school graduates. Local restaurants help Austin's college population finish their education by providing a wealth of part-time jobs.
Even among the fluctuation of housing costs, people of all incomes are seeing new housing opportunities. The positivity of the last quarter of 2015 will set the stage for home buying in 2016.
Should I Buy a Newly Built Home?
The short answer is yes, you should buy a newly built house over an old one. If you're in the market, newly constructed housing is some of the most affordable housing you'll find.
New homes are being built at a rate that's neither low nor high. Supply and demand for houses have been near equal this year.
Since they are in healthy supply, buyers would benefit from buying a newer house. New house sellers are likely to be either desperate to improve their quality of living or are looking to downsize their homes. 11 million Americans have over 50% equity in their homes, which is enough to allow a profitable home sell and a healthy down payment on the next step up.
You can buy new homes that were built at a discount for lower prices. The steady supply of new homes means there are plenty of houses to choose from. You'll be able to shop around for a good price without worrying about missing an opportunity.
Are Foreclosed Homes a Good Investment?
You may be tempted to grab a cheap foreclosed home, but it could spell doom for your house's equity. You're probably better off buying from sellers who are having trouble unloading their houses at the asking price.
Foreclosures are becoming fewer and fewer. Before housing crashed around 2007, foreclosures had reached a valley. The current number has dropped to about the same level as before 2007. Fewer foreclosures means that homeowners have high equity on their homes, indicating a rise in value.
From a house hunting perspective, buyers should be looking for houses with low or negative equity in 2016. While values are rising for houses, homeowners who have lost value on their homes need to sell to minimize their losses. Only 40% of homes were sold at or above the asking price in April 2015. That means 60% of houses on the market are available at low prices. You can pick one up and ride the wave of rising values.
By making improvements in your home and your community, you can raise values even higher. Growing land and property values will make some impressive returns on your investment.
Is a Student Loan Plus a Mortgage Too Much Debt?
Fresh college graduates who have gainful employment can still consider buying a house in Austin. Even with student debt, moving into your dream home isn't impossible.
For young people looking to invest in Austin real estate, student loan debt can be an issue. Total student debt is at an all-time high. College graduates average about $35,000 in debt. On the high end, graduate students are walking away from their Master's degrees with six-figures in the red. With the average interest rate for loans nearing 5%, it's taking 15-25 years for students to pay off their loans.
In 2016, new graduates can take advantage of plentiful, newly built housing. Austin's northern fringes are seeing a huge influx of prefabricated housing that is doubly cheap. Buyers benefit from the lower land values of newly developed areas as well as the affordable construction of new housing.
Bottom Line: Start Looking For Houses If You're Ready
If you've been putting off looking at new houses in Austin, rest assured that now is an opportune time. Both first-time buyers and current homeowners will see large discounts on houses. You are likely to enjoy rising values as Austin continues to be one of the fastest growing cities in America. Employment is also plentiful. A move to Austin during this moderate real estate climate would be a smart one, and we at Pauly Presley Realty would love to get you started on finding the home of your dreams.