The American dream of owning a home may be slipping even further away for many people in Austin. The KVUE Defenders have been investigating the issue and found that while the sky seems to be the limit for home prices in the city; salaries can’t keep up and it’s pushing people out of town.
For example, Joi and Fabio Torres thought they had life figured out.
“I thought that we had done everything right,” said Joi Torres. “I'd gone to college, got my masters, we saved money, we had extra jobs. I thought we’ll just save a down payment and we’ll buy a house in Austin like we intended.”
It turned out that the simple plan followed by millions of Americans was impossible for the Torres family and presented them with a dilemma that many couples face.
“Pricing is ridiculous and I work in remodeling, said Fabio. “There were houses that were gutted that they wanted $200,000 for.”
“It was either have a baby or buy a house,” said Joi.
According to federal housing data the KVUE Defenders looked at, housing prices have risen faster here in Austin than anywhere else in the country. But the real issue isn’t just a need for housing. Instead, the salaries that most people in Austin receive is not enough to keep up with the price hikes.
“Unfortunately the wage gap has not followed the housing prices,” said Brandy Guthrie, president of the Austin Board of Realtors.
Guthrie has been selling real estate in Austin for 12 years. As a lifelong resident of this city even she is feeling the shift.
"We do need to get proactive about wages and salaries if we want to continue to have the community we have here in Austin,” she said.
The Defenders looked at wages and home prices over the last 26 years in the city and found family incomes rose 97 percent. At the same time, median home prices rose 290 percent.
Put another way, a family making $50,000 in Austin would have seen their income rise to $98,500 over the quarter century period. However, a home that cost $100,000 at the beginning of the same period would now cost $390,000. And the gap between wages and home prices continues to widen.
If salaries were keeping pace, the typical family would make at least $153,000 a year to afford a median priced home. In Austin, median price for a home in Austin is $355,000 while the media price for a home in Round Rock is $284,000. The median price across Texas is $216,000.
“It's a message to the businesses, to the residents to all of the people because as the affordability crisis continues people are having to move further out,” said Guthrie.
It’s not an isolated trend in Austin, statewide prices are increasing at a rate that wages can’t keep up with, but Austin still far outpaces the larger cities like Dallas, Houston, and San Antonio.
Another major concern involved in the home price crunch are taxes. As appraisal values increase, even if the tax rate stays the same, homeowners pay more each year. For some, that has prompted an exodus from Austin, which is exactly the path lifelong Austin resident James Spiars decided to follow.
“The taxes are the reason we're moving,” he said.
Spiars and his wife are selling their east Austin home and moving 56 miles further east to Lee County.
“For half of what we pay here I got like 7 acres,” he said.
The Defenders crunched the data and found the five fastest selling zip codes in our area are now in the suburbs. Within Austin, these five zip codes have the fastest rising prices -- the areas once considered affordable -- mostly in East and Southwest Austin.
- 78721 – MLK-183 / Districts 1 & 3
- 78724 – Between 183 / TX 130 / US 290 – District 1
- 78744 – Southeast Austin – District 2
- 78749 – Oak Hill – District 8
- 78702 – East Austin – Districts 1 & 3
It's tough not to blame everything on the 160 people who move here every day, and for some they blame California. A recent study looked at where all of the people moving here are coming from and it's primarily California.
“We're not more entitled to live here just because we grew up here, but I think if we want to preserve what is special about Austin, then we have to consider the types of people and values and passions that made it special,” said Joi Torres.
The reality is we all play a role in what happens in real life. And yet sometimes it's all a gamble -- risk versus reward and the end result is anyone's game.
To see real estate activity from across Texas, click here.