I came across a comment posted by you on another website and figured I’d try and reach you here. Just returned from my first trip to Austin and came away pleasantly surprised. Had heard all the write up about how it’s a great place to live so figured I’d visit and check it out for myself.

I’m not a techie at all – even though I met some people who work for Dell and a spinoff of Motorola – but have a startup catering company. It would nice to relocate and buy a home (condo or house), but I’m a startup and I have minimal W-2 income to report. You indicate that there will be a shortage of housing in 2-3 years.

Does this take into account Southeast Austin which I understand is ripe for development?

Let’s start with say, unemployment trending negative for half of the metro areas y-o-y, instead of positive across *all* areas.

http://blogs.wsj.com/economics/2009/06/30/unemployment-rates-by-metro-area-2/

Would it be too much to ask the absolute unemployment rate in the Austin-Round Rock metro area to be somewhat closer to the “natural” rate of around 2-5% (depending upon who you ask, 2% is natural if the boom years were normal to you, 5% is natural otherwise)? The second derivative of unemployment in the metro area is negative, but it is too early to tell if that delta is just seasonality or an actual secular trend that will bring us back to par with 2008 y-o-y.

Let’s not even delve too deeply into the troubling future trends for most families’ balance sheets, like increasing energy costs (a passage of cap and trade will pretty much guarantee this, even without inflation-fear-stoked commodity price pushing factored in), property taxes as public employee pensions are forced to start to face the music, and continuing escalation of health care costs as demographics start changing.

Some of the big Austin high-tech employers are accelerating their offshoring projects. I’ve had engineers from different Austin companies approach me about jobs because they fear they are training their replacements. Law firm billings are abnormally down, and construction trade contractors are bidding on gigs far out of town to stay afloat. We haven’t even seen the effects of Option ARM and Alt-A securitizations having to face the music yet; one afternoon with a Bloomie pulling up the default rates on the majority of those tranches will telegraph for you what will happen in a year or so.

We are in the calm before the tsunami wave hits. Unless one has a very strong cash position, and even then it might not be sufficient for a new mortgage scenario for one’s personal balance sheet, buying here is picking up the fish on the sea bed left exposed by the retreating waters drawn back by the tidal wave. The bond and FX markets are telling us to keep watching instead of buying at this point, and I expect the residential real estate market will only keep pricing much lower over the next 12-18 months in Austin.

I’m sure Steve and Sylvia will do well, as they seem careful, conservative players. Their mettle will be tested, and some of their less-observant colleagues in the RE industry will be much worse off, as we are far, far from the bottom yet, folks. “Fasten your seatbelts, it’s going to be a bumpy night.”

If the second person is not on the deed and is actually going to occupy the second house as a primary residence, I suppose trhat might fly. It’s tinkering on the edges of loan fraud though, if it’s a married couple, but it might be technically allowable if the second home is indeed to be occupied by the purchaser.

Steve

What if a couple lives in a house but one spouse is not on the deed . Is he/she eligible for this “up to $8K first-time home buyer tax credit” if he/she will go and buy a second house for his/her name and claim it as a primary residence?