If you're currently renting an apartment or a house in Austin, Texas, you have probably gotten that dreaded notice from the landlord that your rent is going up this year. Take comfort -- most of the buyers I'm working with today have decided to purchase for that same reason!
In 2006, the Austin rental market was considerably softer but still considered healthy. You could get a starter 1-bedroom apartment, usually around 650 square feet, built within the last 10 years and in a good area like Monterrey Oaks or the Arboretum, for $599 to $650. Those same apartments today are renting in the range of $800 to $850!
There are a few major factors at work here. One is the perception that the loan market is too tight, that peopl with imperfect credit won't qualify for mortgages. (Not true, by the way.) Another is the influx of people moving to Austin to take advantage of the healthier job market here. And yet another is the most worrisome: the lack of new building in the rental sector.
If developers aren't building new apartments in desirable, close-in locations and at affordable rental rates, then the rates for all of us will continue to climb. The now $800 apartment will likely be $900 when we assess the market again next summer.
On the positive side, interest rates have never been this cheap in our lifetime. And the variety of homes out there at unbelievably low prices is staggering. Add in the Mortgage Credit Cerificate program offered by the state of Texas and you could receive $2000 a year in tax credits (that's literally $2000 back in your pocket) every year that you pay in more interest on your home. It's a perfect storm of awesome reasons to become a homeowner!
Let's talk about your future as a homeowner in Austin, Texas. Renting vs. Buying in Austin today is an absolute no-brainer!