Don't Mess With Taxes

Nick over at Punny Money has posted the latest in his "Adventures in First-Time Homebuying" series, examining in this particular segment the land component of homeownership.

The timing of Nick's post struck me because a story in Sunday's Austin American-Statesman (registration required) looks at the troubles of first-time homebuyers in this area.

The Austin/Central Texas real estate market is hot, hot, hot and that's good for folks already in a house and looking to trade up with the money they make selling their current residences.

But relative to other parts of the country, our housing market is not so hot as to be untouchable. The Statesman story reports that an Austin home's median resale price in June was $182,000. That's up 8 percent, but still less than the $231,000 national number and well below the median prices in Boston ($370,000) or San Jose ($478,000).

They took Lyle at his word*: Looking at those price differentials, a lot of former East and West Coast residents are now new Texans, coming here after they made a mini-mint on the sale of their much higher-priced properties in California or New York or Florida. Those transactions have allowed them to put their profits into larger homes here in the heart of Texas, driving up the value of housing all around.

As regular readers know, the hubby and I are "guilty" of house carpet bagging. But in our defense, I must point out that we really did come home. Maybe not to our actual hometowns, but home to Texas after way too many years away, coping with bad Mexican food, worse BBQ and the strange accents of all our former neighbors! Just kidding … sorta.

And we definitely benefited from our move, psychologically, gustatorialy and financially.

When we sold our Florida house, which I loved except for the fact that it -- and we, huddled inside -- went through two 'canes in 2004, the South Florida market was definitely a seller's one. Then we found our new Austin home, with more square footage and in a location we like, at a price that was less than what we sold our SoFla place for.

To top it off, we got in while interest rates were at their lowest. Our mortgage loan: 5.125 percent fixed.

Although in the past I've argued for, and won, the battle to make a big down payment because I like having lots of equity, this time the hubby convinced me that we should take advantage of having some cash on hand. So we just paid 20 percent down to avoid PMI and our payments here are still less than those we made on the Florida house.

I'm not bragging (I agree with the Texas State History Museum's exhibit that says "it ain't braggin' if it's true"), just marveling over the favorable confluence of events that got us where we are. The real estate gods smiled upon us in 2005 and I'm not going to tempt them ever again. I'm never moving from this spot!

Keeping that good real estate Karma: So while we're happy and somewhat settled (boxes of books are slowly being transported from the dining room to the proper rooms that will be their final homes), I do feel for folks still looking to truly call Austin home, especially first-timers.

Those still looking to break into the market are being forced into the exurbs. Land prices are a small part of a house's price. Here the actual dirt accounts for about 20 percent of the cost of new home. Builders are moving to outlying Austin where they can put up developments with homes that are, according to the Statesman story, $20,000 to $30,000 less than residences closer to the city's center.

The commutes are longer, but a lot of these new neighborhoods include community amenities -- pools, parks, ball fields -- so that on weekends people don't feel a need to look elsewhere for recreation or entertainment.

And, as one builder notes, the tens of thousands they save on the house price buys a lot of gas to pay for commuting.

For folks looking for their first home or to move up to a larger one, hang in there. And check out Nick's tips. Other home buying bloggers you might peruse include HouseHopeful, Landless Gentry and The Housing Bubble.

A couple of MSM sites offer some housing advice: RealEstateJournal.com (Wall Street Journal) and The Walkthrough (New York Times).

And I would be unforgivably remiss if I didn't point you to Dan Green's The Mortgage Reports and Holden Lewis' Mortgage Matters.

Happy and successful house hunting, whether it's your first, next or last!

*Sing it! "That's Right (You're Not From Texas)" chorus:

That's right you're not from Texas.
That's right you're not from Texas.
That's right you're not from Texas.
But Texas wants you anyway.

Full lyrics here. Audio clip here.

Y'all come visit the Lone Star State and see what Lyle's singing about.

Morning subdivision photo courtesy of gracey/morgueFile.com