In Which Area of Austin will Jim and Pam End Up?

Everybody loves Austin. Or so it seems. If the recent Forbes article “Austin Envy” wasn’t enough (though it mistakenly claims we still have Austin Hippies – we don’t. And, please, NOBODY refers to Austin as “Silicon Hills”), the final proof was in the finale of The Office, in which Jim and Pam decide to leave Scranton PA, bound for, of course, Austin, TX.

This makes sense. I mean, what other U.S. city could they have decided upon? Pittsburg? Phoenix? Orlando? No, the writers of The Office got it right. Jim and Pam are likable characters. We want the best for them. They’ve paid their dues in the decaying armpit that is Scranton PA, and they are deserving of a bright and optimistic new life. Austin is the only U.S. city for which this “new beginnings” story line would work. Fans can cheer the decision to move to Austin like they can no other city. It requires no explanation. It’s, like, “of course”. Self-explanatory. And we can feel good about that for them.

And what should Jim and Pam expect when they get here? Where will they live?

The Austin home sales market has gone crazy. Home prices, though “affordable” when looking at the entire metro area ($200K median), are rising quickly in the central areas of Austin ($400K median value) that make it unique and cool.

Most parts of Austin are, in fact, Anywhere USA. Traffic is terrible, and getting worse. The most affordable outskirt areas have “toll road overhead”, higher property taxes, and higher utility costs than Austin proper. Throw in cookie-cutter DR. Horton housing – the same stuff you’ll see in Las Vegas or Phoenix – which represents the antithesis of the “Austin Vibe” and, well, those areas are not that special. The prices are cheaper out yonder, but the total cost of living is not as cheaper as people think, once all costs are properly factored in. And your daily living experience, save for forays into Austin proper, is nothing unique.

So where will Jim and Pam end up?

Since money will be tight with Jim working in the start-up, and Austin is the perfect stay-at-home mom town for Pam, and they’ll need good public schools for the kids, I predict Jim and Pam end up in Pflugerville. It’s reasonably close to downtown, has some good schools, and recently, in an article I read, was referred to as “becoming hip”. Hmmm.

Either there or Maple Run in SW Austin if they can afford a home for $225K or thereabouts. My vote would be for Maple Run, in the 78749 zipcode, but they’ll have to battle against other buyers in multiple offer situations before getting a home.

But, ¬†glib joking aside, it’s a serious question. Where do young couples with small kids who don’t want cookie-cutterville but need good schools, and want to experience living in Austin go now? Where can they afford to live?

The areas of consideration are increasingly shrinking. I’m sad about that. Sylvia and I benefit from a strong healthy real estate market as our business thrives, but I worry about my own kids, now 17 and 20, and whether or not they’ll be able to afford to raise their future families in the same neighborhoods they grew up in.

Both were born in Travis Heights. Then we moved to Cherry Creek in South Austin, off Westgate, then Oak Hill for 11 years in 3 different homes, then to Westlake for the high school years. Our modest neighborhood of 1970s tract homes has exploded in value the past 12 months such that a typical 1,800 sqft 1978 rancher is now worth $500K. That’s more than $100K higher than the prices 3 or 4 years ago.

In 2010 , I listed a Plain Jane 3 bdrm 1 bath house in 78704 that failed to sell. We couldn’t give it away. The hand-wringing parade of crybaby buyers had a litany of objections. It was a different market then with buyers, unsure, unwilling. I advised the seller to pull the listing and wait a few years. We recently relisted it for $275K and, after the multiple offer dust cleared, it was under contract for $331K cash in 36 hours. That’s crazy. But in 2 years, that will seem like a great price, so these buyers, in my opinion, were smart buyers. But there goes the “affordable” central housing stock. It’s all disappearing toward the upper end of pricing.

The affordability train, what’s left of it, is leaving the station in Austin. Jim and Pam better hurry up and get here if they don’t want to end up in Pflugerville.

8 thoughts on “In Which Area of Austin will Jim and Pam End Up?”

  1. I’d hope Jim and Pam would be smart enough to realize that in big cities, single-family homes are not necessarily going to be affordable at all, and they’d at least consider condos (which is how I bought into Clarksville in my 20s). Their hypothetical lifestyle doesn’t seem to mesh with mowing the yard after all.

  2. I like my neighborhood in 78745 south of William Cannon. 3 bedroom houses under 200k, quiet, diverse, wooded, and while the houses were once cookie-cutter, they have evolved since the late 70s into unique properties.

  3. I will agree with George, there’s no need to move 2X the distance to Pf. The 78745, 78747, and 78748 zips are still affordable and within the city of Austin. They just don’t get enough attention, and aren’t well marketed. Come to think of it. the $250K+ sales are brisk, so I guess they don’t need the marketing.

  4. Though the current market is strong, I believe we will see a correction soon. Now, compared to many parts of the country, Austin is a great deal! I personally like 78745 and 78748. They will do nothing but appreciate over time and become more solidly a part of Austin. Like George stated, most houses in the South are cookie cutter NPC or Milburn homes from the 70’s and 80’s, but somehow they have more charm then the KB neighborhoods nowadays.

  5. I don’t know much about Austin real estate, but I have often wondering, when visiting my aunt in Windsor Village, why that neighborhood isn’t more popular with young families. 70s ranch houses aren’t anything special, but they are close to a park, a library, and everything at Mueller.

    I have heard that the schools are unacceptable in that area. My experience in Houston, though, is that young, professional families start moving in and then schools get better, not the other way around. And of course, they aren’t making any more land (that’s fairly close-in)…

  6. I agree with Mamacita. Young professional families are filling in the city limits. 78745, 78747 and 78748 are turning over really quickly, because they are some of the last areas in city limits that are able to be developed, and they are filling in with 200K-350K new construction – solidly middle class. Young families are being told by their peers in SW to avoid these areas based on antiquated notions of how things SHOULD be in this town, and with 150 people moving here each day, we need to reassess what we consider “good areas”

  7. I’ll go out on a limb and say, Pflugerville would be a quick jaunt down 130 to the Airport as it sounds like Jim would be traveling quite a bit. And PF is still small enough that daily tasks would not be taunting.
    One has to look at other things though: What does a gallon of milk go for? How much is a gallon of gas? What does day care run per month? (even if you don’t plan to use it) These are great markers of over-all affordability – life’s little things usually left out in the rush to make sure one can afford the monthly mortgage + taxes. Heck – I wouldn’t move here until we visited and checked out the local supermarkets to make sure the selection/prices fit our needs.

  8. Thanks for all your comments. All good points.

    @Michael, you’re alluding to “Total Cost of Living” which I’ve long meant to write about, related to Real Estate. It’s a known concept with cars, as TCO (Total Cost of Ownership), including residual resale value, cost of ongoing maintenance, gas mileage, etc, but most buyers still think only of “price” when buying a home, which ignores many other factors.

    I agree with South/SW Austin still being an affordable area of Austin proper. I’m getting ready to list a home in Pflugerville for about $150K though that would cost $225K in 78745 and $250K in 78749. Would be a bit less in 78748 and well below $200K in 78744, … but still.



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