Monday, November 20, 2017 / by Meagan Henry
Austin Home Buying Tips
I know we’ve mentioned it a lot lately – but the Russ Phillips Team had a great year in 2014! With a total of 68 homes for sale now off the market because of our work with our great clients, we very nearly made our goal of $30,000,000 in gross sales! If you’re counting along, that means our average home for sale price is pretty high, which leads many people to ask me if I’ll work with them in a lower price range. The simple answer is – YES! It’s true our team has an ‘average’ sales price much higher than, say, a first time home buyer would likely be in the market for, but it’s important to remember this number is just an average – we work with homes in the 100s all the way to the millions. In fact, the first time homebuyer is important to the Russ Phillips Team because, plainly put, they are the future of the housing market! There’s always going to be a lot of talk about how this new technology or that new merger is the ‘future’ of real estate, but we know better: People are the future of real estate in Austin, in Georgetown and in every community. Forming lasting relationships now with people just entering the housing market will ensure our future success as we cultivate meaningful, long term relationships that keep our clients coming back to us for all their real estate needs today, tomorrow, and always.
Earlier this week I was talking with a young friend who is thinking of buying her first house when she said something surprising to me. As she lamented the high price of rent in the Greater Austin Area, she said, “You know I wouldn’t be surprised if it was cheaper to buy a house than to pay rent here!”
As a real estate professional, this was a striking statement for two reasons: 1.) It is a long known fact in the real estate industry, that under most circumstances and in most cities in the USA buying a home is indeed cheaper than renting – by a significant amount of money 2.) Perhaps many Millennials (the current generation of first time homebuyers) are not actually aware of this fact and perhaps more of them would be entering the housing market if they were.
Buying Austin Real Estate is 30% Cheaper than Renting
According to the most recent studies, buying a home is cheaper than renting by, on national average, 38%. In the Greater Austin Area it is, on average, cheaper to buy than rent by 30%. Of course there are a great many factors that affect this number and figuring out exactly how much cheaper it might be to buy than rent for you specifically is slightly more complicated. The type of mortgage you will get, the rate you will qualify for, the tax bracket you fall into, the length of time you plan to stay in your home, the higher cost of maintenance in a house, the lost opportunity cost of investing your down payment in the market over the same amount of time, the rate of appreciation both of the dollar and of your home in the market where you reside – these and other factors will play in to whether or not buying or renting is actually cheaper for you. While it’s obviously impossible to predict or control for many of those factors (like the housing market in the year you decide to sell), we can predict many of the others. In fact, Trulia and Realtor.com both have great calculators that will give you the ability to adjust for as many of the above factors as possible.
Generally speaking, as long as you plan to stay in your home for 7 or more years (the national average break even point in home ownership when it becomes cheaper to have bought rather than rented) it’s going to be cheaper to buy. Depending on your area and what kind of mortgage you get, even 2 years might be enough to see buying as a cheaper option. *Hint: The Greater Austin Area is one such place.
So here’s my message to all of you guys suffering through the high rent in Austin (predicted to rise another 4.5% in 2015, by the way) – it’s a pretty good bet that purchasing a home that's actually for sale will be cheaper for you! I know how complicated navigating mortgages and title and even tax deductions can be – but here is something else you might not know if you are a first time homebuyer – helping you through that process? That’s my job! And I have put together an unbeatable real estate team that I am sure can get you the best house at the best price, just give us a call and we will walk you through the rest. We love practicing real estate in Austin and Central Texas. But even more than that, we love partnering with our clients at a critical moment in their lives. If you're considering whether to rent or buy a home in Austin, we're here to help.