4 ms·

Plunging Home Prices, Fleeing Companies: Austin's Glow Is Fading

46 points by petethomas 3y ago

sandspar 3y ago
Austin is just a bit too hot for the average person. Their summers are fine if you grew up in the desert. But people who move from WhereEversville America to Austin - they're gonna have a rough time in Austin in August. If you've been to Las Vegas in the summer then imagine that temperature.
- klipt 3y ago
  Only going to get worse as CO2 levels rise.
  - reducesuffering 3y ago
    Can we be reasonably certain about this? I was aware climate models were showing overall global averages being higher (say 2C) but do we know with any clarity where a specific place, like Austin TX, will fall on that increase? 0C? 1C? 2C? 3C?
  - lowmagnet 3y ago
    Houston, you are a problem (existing at 36ft, being next to the gulf, building in your flood plains. Where are the Houstonians moving to?
- drewcoo 3y ago
  > summers are fine if you grew up in the desert Deserts are low precipitation, not necessarily hot. Austin is not arid. It's not West Texas. > If you've been to Las Vegas in the summer then imagine that temperature In the midwest we say "it's not the heat; it's the humidity." Vegas is hotter and dryer than Austin. They might "feel" similar, but how people stay hydrated and how they stay cool will be noticeably different.
  - AlotOfReading 3y ago
    There are very few deserts that are arid without being hot because the primary factor limiting temperature in most habitable parts of the globe is the heat capacity of water in the area vs solar energy. That's why most of the counterexamples are polar deserts.
- seanmcdirmid 3y ago
  Austin has a high amount of humidity and is nowhere near being a nice arid desert like say El Paso. I lived in Austin during the summer of 2001, and my dashboard melted. I didn’t know you needed those sun thingies to block the sun. I got one quick after that. Not sure how bad it is now. Tucson is also hot, but I love dry heat. Wear a hat and hydrate, you’ll be fine. Austin had some really cool swimming holes though, it wasn’t a bad place nature wise.
- jakebasile 3y ago
  People will point to a lot of things about Austin to explain this but this is the biggest one in my opinion. I have lived here for 12 years, and the summers are still fucking brutal. I was born and grew up in Ohio, and I just can't get used to it. I like a lot of other things about Texas and the Austin area but the summer heat is not one of them.
jseliger 3y ago
It's amazing that Bloomberg presents falling housing prices are presented as bad, rather than as an opportunity! There are a million morons online who claim that increasing the supply of housing somehow never moderates or lowers prices. Then it clearly happens.
- psyants 3y ago
  [dead]
- jusssi 3y ago
  The problem with falling prices is that it stalls the market. If you think you could wait an year to get the same house 10% (+ inflation) cheaper, why would you buy now?
  - supertrope 3y ago
    Because you want to move in this year. Predicting another 2007 is a fool's game. Thanks to our system of mortgages that are implicitly backed by the government, house prices usually only go up. At worse the price just plateaus for a while. https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS
    - vineyardmike 3y ago
      > house prices usually only go up. At worse the price just plateaus From the article: > Home prices have dropped 18% from the pandemic highs seen in May 2022, the most among the 50 largest US metro areas If I lived in Austin, I would wait another year before buying a house even if I wanted to buy one soon. To the parent's point - it might get even cheaper. Watching the "value" of your home drop 18% is emotionally hard for people, even people who don't intend to sell. It's risky if you just bought the house because it could put your loan underwater.
      - itake 3y ago
        My home value has dropped 10% since I purchased it, but I sleep slightly better b/c even if I bought my home at the current market price, I would have a higher mortgage payment than what I do now. Obviously, this isn't ideal and buying a home today at 7% interest rates (with no plans to increase rates further) would be a tough to pill to swallow if your value will drop further.
hn_throwaway_99 3y ago
The article itself is actually pretty balanced despite the "doomer" headline. As a (relatively) long time Austinite, a big part of the appeal of Austin for a long time was that it might not have all the amenities or infrastructure of a big metropolis like NYC, LA, SF or Chicago, but because it was so much cheaper, you could actually afford to take advantage of what the city had to offer. That tradeoff has gotten significantly worse recently. I.e. Austin never had the cultural attractions (major museums, first class theater, architecture, etc.), big league sports teams, perfect weather, great geography, etc. of various bigger cities, but it did have good "2nd tier options": Lady Bird Lake (Town Lake to us oldies), Lake Travis, great music scene, etc. These made Austin a great option if you wanted more of a career/life balance. But while Austin really started getting ridiculously unaffordable (for what it offers) I'd say starting in the early 2010s, it just got into plain stupid "meme stock" territory during the pandemic. I'm not sure if it was some combination of Elon Musk/Joe Rogan/etc., but people elsewhere got this silly hyped up vision of Austin. When I first moved to Austin I was worried none of my friends from the coasts would want to visit me, and then for the past couple years if I told people I was from Austin I'd always hear "Oh, I hear that it's such an awesome city!" which honestly was a bit weird to me. Don't get me wrong, I always really liked Austin and it has a ton to offer, but the negatives have started to outweigh the positives: it's always been crazy hot during the summer, but 2023 was insane and probably a peek of what climate change has in store; public transportation is pretty abysmal so if you don't live close in to the city you'll be stuck in horrendous traffic; but the crazy explosion in housing prices mean that anything remotely central is egregiously expensive; being a woman of reproductive age can simply be dangerous in Texas (even if you desperately want to have kids). So I think what is happening is a much, much needed correction. Austin still has a ton to offer, but not at the stupid prices of the past couple years. And if anything, housing has really started falling because there recently has been a ton of multi-family projects that have come online. I mean, say what you want about the lack of regulation in Texas, but at least we're solving our housing problem here with the only solution that really works - building more housing.
- dustincoates 3y ago
  Austin has been through this before. If you've been around for a while, you know about the building frame that used to sit downtown for years that was supposed to be occupied by Dell. I think you're right, though, that there's been a tipping point. Austin used to be the "Slacker" city, where you could afford to live there while waiting tables and playing in your middling indie band. But the last few times I've been there since moving away, that roughness seems to have disappeared, with a certain branded sameness everywhere. The Alamo Drafthouse is great for the city when it's unique, but when every business is trying to artificially mimic that kind of ironic detachment, it gets boring.
throwaway5959 3y ago
[flagged]
- jdhendrickson 3y ago
  I feel this in my bones. We drove people to vote, worked the rallies, gave every spare penny we could to the point that we met the spending cap of what we could give, and this state is either rigged, or populated with an incredibly slim majority of people whose values are so far from what I consider moral it turns my stomach to look at them and wonder are you someone that supports this madness when I go grocery shopping. Either way, it's time to leave, I can't raise a family in a state that doesn't value education, or peoples bodily autonomy.
- grecy 3y ago
  I'm always shocked more people don't vote by just leaving crappy states with crappy human rights records.
  - dragonwriter 3y ago
    The people that have the most need to leave are the ones with the least capacity to do so, the ones with the most capacity to leave are generally (not entirely, but broadly) those with the least to fear from the problems.
lisper 3y ago
I guess folks are realizing that Austin actually is in Texas after all.
- 3D30497420 3y ago
  I wonder how much of an impact that has. It isn't mentioned in the article, and I don't really know how large of an impact that has in aggregate. Also, the article references how Nashville is providing some competition. Pretty sure Tennessee is not really any better than Texas in many respects.
  - lisper 3y ago
    That comment was actually meant to be a joke. (Well, mostly.)
    - bsder 3y ago
      1) Big businesses by and large don't give a damn about being in Texas Oracle is following a tax incentive. Any company willing to move today is also willing to move in 3-5 years when your tax incentives go away. Playing the tax incentive game is stupid for the populace, but the politicians love the press when somebody comes in. None of these big companies that are playing tax incentive games are employing people that require advanced degrees--they're just body shops. 2) Individuals, however, are finding out that they care more than they thought While Austin is an oasis of sanity in Texas, it is still in Texas. This means that your healthcare is abnormally affected by the existence of nitwits. This means that anti-vax is rampant around you, and you are more likely to get Covid, measles, etc. Education is affected by religious dorkbags of varying sanity unless you can completely opt out for private schools. Your dating pool has a much larger chunk of religious people for better and worse. And the cost of living isn't that much worse than California--which generally has better weather.
      - nxm 3y ago
        -Vs in California where beaches and businesses were selectively forced to close and ruined during Covid. - Vaxxed for Covid does not prevent you from spreading it. -Having a choice of schooling for your kids is something most parents want. Gee I keep wondering why California keeps losing people to Texas
andsoitis 3y ago
For me the most interesting about all this is that there are so many people that at the same time treat a city as fashionable for a hot minute but then dump it when the algotrend is on the rise. Like Heidi Klum would say: the one day you’re in. The next day you’re out.
- yieldcrv 3y ago
  When you make housing, moving and transportation efficient
- x3n0ph3n3 3y ago
  I think all it took was spending a summer there.
openrisk 3y ago
It is interesting that competition seems to come from another mid-sized city (Nashville) rather than a return to megacities. There are plenty of such smaller cities and if there is indeed a move away from 10mln+ sized cities toward 1mln+ sized cities there will be no shortage of offering. What will be the optimal urban shape and size in a much more digitally interconnected world? It still an open question. The pandemic forced people to recognize this is a major new dynamic but we are far from a new equilibrium. The Austin boom and (purported) bust might be seen as exploring the new efficient frontier. The conjecture would be that smaller cities, sized and organized to offer the amenities and opportunities of the traditional metropolises of the 20th century but where people are not forced to pay disproportionate noise, polution and overcrowding penalties will eventually become the standard pattern. Much will depend on the precise non-linear dependencies on scale (both negative and positive factors).
mise_en_place 3y ago
A lot of these boomtowns were the result of ZIRP and Section 174. Not saying they will collapse any time soon though, just that the growth phase is over. The alternative is relocating back to SF, which is an unlivable city at this point.
dataviz1000 3y ago
I made a comment about this 12 months ago. How close is my projection? https://news.ycombinator.com/item?id=35829544 https://news.ycombinator.com/item?id=35829544

46 points by petethomas 3y ago

Austin is just a bit too hot for the average person. Their summers are fine if you grew up in the desert. But people who move from WhereEversville America to Austin - they're gonna have a rough time in Austin in August. If you've been to Las Vegas in the summer then imagine that temperature.

klipt 3y ago
Only going to get worse as CO2 levels rise.
- reducesuffering 3y ago
  Can we be reasonably certain about this? I was aware climate models were showing overall global averages being higher (say 2C) but do we know with any clarity where a specific place, like Austin TX, will fall on that increase? 0C? 1C? 2C? 3C?
- lowmagnet 3y ago
  Houston, you are a problem (existing at 36ft, being next to the gulf, building in your flood plains. Where are the Houstonians moving to?
drewcoo 3y ago
> summers are fine if you grew up in the desert Deserts are low precipitation, not necessarily hot. Austin is not arid. It's not West Texas. > If you've been to Las Vegas in the summer then imagine that temperature In the midwest we say "it's not the heat; it's the humidity." Vegas is hotter and dryer than Austin. They might "feel" similar, but how people stay hydrated and how they stay cool will be noticeably different.
- AlotOfReading 3y ago
  There are very few deserts that are arid without being hot because the primary factor limiting temperature in most habitable parts of the globe is the heat capacity of water in the area vs solar energy. That's why most of the counterexamples are polar deserts.
seanmcdirmid 3y ago
Austin has a high amount of humidity and is nowhere near being a nice arid desert like say El Paso. I lived in Austin during the summer of 2001, and my dashboard melted. I didn’t know you needed those sun thingies to block the sun. I got one quick after that. Not sure how bad it is now. Tucson is also hot, but I love dry heat. Wear a hat and hydrate, you’ll be fine. Austin had some really cool swimming holes though, it wasn’t a bad place nature wise.
jakebasile 3y ago
People will point to a lot of things about Austin to explain this but this is the biggest one in my opinion. I have lived here for 12 years, and the summers are still fucking brutal. I was born and grew up in Ohio, and I just can't get used to it. I like a lot of other things about Texas and the Austin area but the summer heat is not one of them.

jseliger 3y ago

It's amazing that Bloomberg presents falling housing prices are presented as bad, rather than as an opportunity! There are a million morons online who claim that increasing the supply of housing somehow never moderates or lowers prices. Then it clearly happens.

psyants 3y ago
[dead]
jusssi 3y ago
The problem with falling prices is that it stalls the market. If you think you could wait an year to get the same house 10% (+ inflation) cheaper, why would you buy now?
- supertrope 3y ago
  Because you want to move in this year. Predicting another 2007 is a fool's game. Thanks to our system of mortgages that are implicitly backed by the government, house prices usually only go up. At worse the price just plateaus for a while. https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS
  - vineyardmike 3y ago
    > house prices usually only go up. At worse the price just plateaus From the article: > Home prices have dropped 18% from the pandemic highs seen in May 2022, the most among the 50 largest US metro areas If I lived in Austin, I would wait another year before buying a house even if I wanted to buy one soon. To the parent's point - it might get even cheaper. Watching the "value" of your home drop 18% is emotionally hard for people, even people who don't intend to sell. It's risky if you just bought the house because it could put your loan underwater.
    - itake 3y ago
      My home value has dropped 10% since I purchased it, but I sleep slightly better b/c even if I bought my home at the current market price, I would have a higher mortgage payment than what I do now. Obviously, this isn't ideal and buying a home today at 7% interest rates (with no plans to increase rates further) would be a tough to pill to swallow if your value will drop further.

hn_throwaway_99 3y ago

The article itself is actually pretty balanced despite the "doomer" headline. As a (relatively) long time Austinite, a big part of the appeal of Austin for a long time was that it might not have all the amenities or infrastructure of a big metropolis like NYC, LA, SF or Chicago, but because it was so much cheaper, you could actually afford to take advantage of what the city had to offer. That tradeoff has gotten significantly worse recently. I.e. Austin never had the cultural attractions (major museums, first class theater, architecture, etc.), big league sports teams, perfect weather, great geography, etc. of various bigger cities, but it did have good "2nd tier options": Lady Bird Lake (Town Lake to us oldies), Lake Travis, great music scene, etc. These made Austin a great option if you wanted more of a career/life balance. But while Austin really started getting ridiculously unaffordable (for what it offers) I'd say starting in the early 2010s, it just got into plain stupid "meme stock" territory during the pandemic. I'm not sure if it was some combination of Elon Musk/Joe Rogan/etc., but people elsewhere got this silly hyped up vision of Austin. When I first moved to Austin I was worried none of my friends from the coasts would want to visit me, and then for the past couple years if I told people I was from Austin I'd always hear "Oh, I hear that it's such an awesome city!" which honestly was a bit weird to me. Don't get me wrong, I always really liked Austin and it has a ton to offer, but the negatives have started to outweigh the positives: it's always been crazy hot during the summer, but 2023 was insane and probably a peek of what climate change has in store; public transportation is pretty abysmal so if you don't live close in to the city you'll be stuck in horrendous traffic; but the crazy explosion in housing prices mean that anything remotely central is egregiously expensive; being a woman of reproductive age can simply be dangerous in Texas (even if you desperately want to have kids). So I think what is happening is a much, much needed correction. Austin still has a ton to offer, but not at the stupid prices of the past couple years. And if anything, housing has really started falling because there recently has been a ton of multi-family projects that have come online. I mean, say what you want about the lack of regulation in Texas, but at least we're solving our housing problem here with the only solution that really works - building more housing.

dustincoates 3y ago
Austin has been through this before. If you've been around for a while, you know about the building frame that used to sit downtown for years that was supposed to be occupied by Dell. I think you're right, though, that there's been a tipping point. Austin used to be the "Slacker" city, where you could afford to live there while waiting tables and playing in your middling indie band. But the last few times I've been there since moving away, that roughness seems to have disappeared, with a certain branded sameness everywhere. The Alamo Drafthouse is great for the city when it's unique, but when every business is trying to artificially mimic that kind of ironic detachment, it gets boring.

throwaway5959 3y ago

[flagged]

jdhendrickson 3y ago
I feel this in my bones. We drove people to vote, worked the rallies, gave every spare penny we could to the point that we met the spending cap of what we could give, and this state is either rigged, or populated with an incredibly slim majority of people whose values are so far from what I consider moral it turns my stomach to look at them and wonder are you someone that supports this madness when I go grocery shopping. Either way, it's time to leave, I can't raise a family in a state that doesn't value education, or peoples bodily autonomy.
grecy 3y ago
I'm always shocked more people don't vote by just leaving crappy states with crappy human rights records.
- dragonwriter 3y ago
  The people that have the most need to leave are the ones with the least capacity to do so, the ones with the most capacity to leave are generally (not entirely, but broadly) those with the least to fear from the problems.

lisper 3y ago

I guess folks are realizing that Austin actually is in Texas after all.

3D30497420 3y ago
I wonder how much of an impact that has. It isn't mentioned in the article, and I don't really know how large of an impact that has in aggregate. Also, the article references how Nashville is providing some competition. Pretty sure Tennessee is not really any better than Texas in many respects.
- lisper 3y ago
  That comment was actually meant to be a joke. (Well, mostly.)
  - bsder 3y ago
    1) Big businesses by and large don't give a damn about being in Texas Oracle is following a tax incentive. Any company willing to move today is also willing to move in 3-5 years when your tax incentives go away. Playing the tax incentive game is stupid for the populace, but the politicians love the press when somebody comes in. None of these big companies that are playing tax incentive games are employing people that require advanced degrees--they're just body shops. 2) Individuals, however, are finding out that they care more than they thought While Austin is an oasis of sanity in Texas, it is still in Texas. This means that your healthcare is abnormally affected by the existence of nitwits. This means that anti-vax is rampant around you, and you are more likely to get Covid, measles, etc. Education is affected by religious dorkbags of varying sanity unless you can completely opt out for private schools. Your dating pool has a much larger chunk of religious people for better and worse. And the cost of living isn't that much worse than California--which generally has better weather.
    - nxm 3y ago
      -Vs in California where beaches and businesses were selectively forced to close and ruined during Covid. - Vaxxed for Covid does not prevent you from spreading it. -Having a choice of schooling for your kids is something most parents want. Gee I keep wondering why California keeps losing people to Texas

andsoitis 3y ago

For me the most interesting about all this is that there are so many people that at the same time treat a city as fashionable for a hot minute but then dump it when the algotrend is on the rise. Like Heidi Klum would say: the one day you’re in. The next day you’re out.

yieldcrv 3y ago
When you make housing, moving and transportation efficient
x3n0ph3n3 3y ago
I think all it took was spending a summer there.

openrisk 3y ago

It is interesting that competition seems to come from another mid-sized city (Nashville) rather than a return to megacities. There are plenty of such smaller cities and if there is indeed a move away from 10mln+ sized cities toward 1mln+ sized cities there will be no shortage of offering. What will be the optimal urban shape and size in a much more digitally interconnected world? It still an open question. The pandemic forced people to recognize this is a major new dynamic but we are far from a new equilibrium. The Austin boom and (purported) bust might be seen as exploring the new efficient frontier. The conjecture would be that smaller cities, sized and organized to offer the amenities and opportunities of the traditional metropolises of the 20th century but where people are not forced to pay disproportionate noise, polution and overcrowding penalties will eventually become the standard pattern. Much will depend on the precise non-linear dependencies on scale (both negative and positive factors).

mise_en_place 3y ago

A lot of these boomtowns were the result of ZIRP and Section 174. Not saying they will collapse any time soon though, just that the growth phase is over. The alternative is relocating back to SF, which is an unlivable city at this point.

dataviz1000 3y ago

I made a comment about this 12 months ago. How close is my projection? https://news.ycombinator.com/item?id=35829544 https://news.ycombinator.com/item?id=35829544