8 minute read
Austin housinG crisis
from Around ATX
by LASA Ezine
Austin’s Housing Crisis
How it has impacted Austin and its residents
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By Estrella C. Diaz Mendoza
A neighborhood at East Austin. Courtesy of East Austin Real Estate Austin. A growing city. An exponentially increasing population with Silicon Valley businesses are moving in the area. You are a long-term resident of Austin who has seen the changes, especially the increase in taxes.
As many big businesses move to Austin, causing many more people to move here, there are many concerns about rising home prices and taxes due to a sudden increase of demands for housing. Austin’s population has risen by 3%, the highest increase of all metro areas with a population higher than one million.
Brad Pauly is a homeowner, broker, real estate agent and owner of Pauly Presley Realty. He explains how he sees the housing shortage.
“It was kind of a perfect storm when you look at the reasons why people aren’t selling and the reasons why they can’t
construct homes as quickly as they used to in the past,” Pauly said. “Then you couple that with all the new Austin residents, you see that it created this big issue with supply and demand. There are a lot more buyers and tenants than there are properties available to lease and to be purchased. And there are no signs of that slowing down as more companies just continue to choose Austin as their new home.”
Working in the real estate industry for a while, Pauly talked about how his business was before the housing shortage.
“It was easier for buyers and tenants to shop for real estate,”
Pauley said. ”I guess it was easier on real estate agents as well. Just not having to scramble to try and get offers in and showings done in such a quick time. But it was just a little bit slower of a pace, even though it wasn’t slow by any means. But slower than the way things are moving right now.” There were also negative effects in Pauly’s realty business as Pauly describes.
“With the multiple offer situations that we’re seeing on a lot of these homes that come up for sale, it’s quite often that we’ll be doing a lot of work without making any kind of income. If you continue to lose on deals if you can’t get one of your offers accepted? Well, that’s a lot of work that you’ve put in with no compensation. So that can be frustrating, but that’s part of the business”
With negative effects, he also faces housing shortages in his business. “Well there’s a very limited supply of inventory,” Pauly
said. “At any given time, there are about seven to 800 total properties that you can buy in Austin which is very, very low inventory. So that’s why you’re seeing so much demand. You know there are 20 buyers for every home that comes available.” living in Austin for 13 years and has been a homeowner for 12 of them. She is surprised by the amount a buyer would buy for a house and the increase in her home value.
“If I sold the house today, I think I could sell it for $500,000,” Karydas said. “ And I paid $180,000 for it.”
Around 2013, she started to notice her home value change.
“It started to change a little bit by a little bit,” Karydas said. “I would say between 2012 and 2014 is when I really started to notice the change.”
With property values increasing, homeowners have to pay more and more taxes. The worst part is that there is no way to lower them.
“Taxes have been really expensive,” Karydas said. “I have to do this thing called protesting them every year and in the beginning, it was easy. I could protest and they would sometimes lower them. And sometimes they stayed the same. But last year and the year before there was nothing I could do about it. They were just like ‘No, your taxes are just increasing’.”
Pauly had a similar opinion to Karydas regarding taxes.
“It was kind of a perfect storm when you look at the reasons why people aren’t selling and the reasons why they can’t construct homes as quickly as they used to in the past” - Brad Pauly
“As a homeowner, my taxes have increased significantly,” Pauly said.
Brad Pauly, owner of Pauly Presly Realty. Courtesy of Pauly Presly Realty.
lived in her rented property and mobile home for about six years. The housing shortage and increase in property values have caused rent increases in her area.
“A lot of the time we know that for every contract renovation there is an increase but there are times that we expect a minimum while on other occasions it increases more than we expected,” Perez said. “There are times that we didn’t expect an increase. In the last 6 years I have lived here, they were increasing $20 or $25. For example, in this contract renovation, it doubled. It was $50 that we had to pay more.”
Being a mobile home owner isn’t the same as being a homeowner. Perez has seen the value of her mobile home’s value change.
“As for mobile homes, I think their values are decreasing,” Perez said. “Every year, it loses its value because it’s not something fixed, or stable that someone is able to maintain or do things that look good. You may maintain a value but regularly of every passing year and using it loses its value a lot.”
Perez said an estimate of how much a mobile home value decreased.
“In the conditions it is, I think about 15% to 20% because I have tried to maintain my home the same way as I bought it,” Perez said. “But if I decided to sell it, they would give me less than I bought for it.”
Along with the decreasing value of her mobile home, paying taxes isn’t a challenge for Perez.
“It’s not that much,” Perez said. “I think there is a greater difference between paying taxes in a mobile home than a house in the established land property. I think paying taxes is way different. And for example, here everything depends on the year, value, and if you are in debt or aren’t in debt. Well, it’s not that much I have to pay.”
Some citizens are wondering if Austin is making changes for citizens to adapt to the increasing taxes and rent. Perez shared how it had affected her.
“I think it’s negative because there are increments everywhere and being paid with the same salaries,” Perez said. “in the same standard and you have to pay more with the salary you make and you have Karydas also shared how it affected her.
“I think that homes should be much more affordable,” Karydas said. “Like we should be looking at a different way to collect taxes. So home people who own homes or want to own homes can stay in them for a long term.”
Karydas also has concerns about how it might affect her in the future.
“It makes me worried if I can stay here for a long time,”
Karydas said. They also had opinions on how low-income people are dealing with the increasing prices of homes and rent.
“I’ve seen a lot of people move out and move away,” Karydas said. “So I think in some ways, it can be harmful because some people I know are moving out to Del Valle or Manor, or like going out to land, which is great. We need people who are low income to be able to afford
to be in the city because there are hospitals, there is childcare and there are grocery stores. So I worry that people have communities and people will be displaced. They’ll have to move away from friends and family that makes them feel that they know. And they’ll have to move away.”
Perez also had a similar opinion.
“I think there should be more support and more accessibility to get things,” Perez said. “Because most of the time, because you don’t earn enough money to pay for things, or insufficient credit you cannot obtain things.”
Pauly said how he felt for low-income people trying to purchase a home.
“It’s incredibly frustrating,” Pauly said. “It’s incredibly frustrating to be trying to lease or purchase in the Austin and surrounding market right now, with a limited budget. I feel bad for anyone who’s trying to purchase or lease that in this current situation. It’s very frustrating.”
Citizens wonder what we would see in the future of the housing market. Pauly made a prediction about the housing shortage.
“I predict that we’re gonna have this current supply and demand issue for at least another year to two years,” Pauly said. “That’s my Pauly went into further detail
about what we would see in the real estate market in the future.
“I think Austin will book any negative trends that you may see in the country,” Pauly said. “I think when things finally slow down, you won’t necessarily see a recession here. But you may see, prices start to level off in the next year and a half, I hope.”
Karydas is unsure but still “To be honest, I don’t really know,” Karydas said. “From my current experience, I think prices are going to continue to increase. I think homes are going to continue to become more expensive.”
Perez also shared her opinion.
“I think from the high demands from people it would get worse because they have to make houses faster because of the high demands,” Perez said. “A lot of new people that are coming into the city are looking for a place to live and they are taking advantage of all of the construction companies and having space for those people. I think that it’s going to be more delicate for the future.”
With impacts and concerns, many hope that the situation will calm down, and hope that they can stay in Austin for a long time.
A mobile home park in Northeast Austin. Carolina Perez has to pay rent to keep her mobile home in a property. Courtesy of Apartments.com
