31 March 2010

Austin is Highest Rental Market in TX

Austin Business Journal

Austin is the most expensive city in Texas for paying rent and buying a home, according to a study released this week by Washington D.C.-based Center for Housing Policy.
The study “Paycheck to Paycheck" compares and ranks costs in more than 200 metro areas in the United States and ultimately concludes homeownership is still unaffordable for many workers despite low interest rates and steep drops in home prices.

Austin ranks as the 65th most expensive U.S. rental market and the 73rd most expensive homeownership market of all metro areas studied. The center studied data provided by the National Association of Home Builders, the National Association of Realtors and the U.S. Department of Housing and Urban Development.

Austin’s median home price is $176,000, unchanged from 2008, the study found. However, Austin’s ranking rose to No. 73 for 2009 compared with No. 84 in 2008.

The markets with the highest median home prices were in California: with San Francisco and San Jose leading the way, followed by Honolulu in third place, and then back to California in Santa Ana and Santa Cruz in fourth and fifth place respectively.

The typical rent for a two-bedroom home rose in 89 percent of the markets studied, with Austin’s price hitting $954 in 2009 from $912 in 2008, although Austin did fall in rankings down to 65 from 59. Once again, San Francisco was the most expensive city at $1,760.

Despite some perceptions it’s a renter’s market in the U.S., the study found that in the vast majority of metropolitan's fair market rents have held steady or increased, even occasionally surpassing monthly mortgage payments for a median-priced home.

The study also found that some occupations are more prone to being priced out of renting. Specifically, retail salespeople continue to be priced out of renting a two-bedroom apartment in every market studied. Janitors fare almost the same, being able to afford a two-bedroom apartment in only one of the 210 rental markets studied. Licensed practical nurses are unable to rent a two-bedroom apartment in 55, police officers in 12, and elementary school teachers in 11, of the markets studied.

“We must develop the common sense, cost-effective policy solutions at the state and local levels that will help ensure long-term affordability for homes and Austin apartments,” said Center for Housing Policy Chair John K. McIlwain, senior resident fellow and the J. Ronald Terwilliger chair for housing at the Urban Land Institute.

“Otherwise, our workforce will face longer commutes and higher transportation costs, leading to increased traffic congestion and adverse environmental impacts."

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