Dallas Is One of the Few Cities in America Where a Young Person Can Buy a House

Categories: Housing

MansionDallas.jpg
Geremia
If you're ages 25 to 34, you could buy a house for a really cheap price in Texas. Like, this mansion would be practically free.
Dallas is among the 10 best cities in the country for young people to buy a home, according to a new National Association of Realtors report. "Buying a home," if you're under 35, is an old-timey activity practiced mostly by your parents and grandparents, sort of like using a rotary phone or having a savings account.

The report uses job numbers and housing prices to determine where young people might actually be able to buy something. It surveyed 100 cities across the country and focused on specific data encompassing the 25 to 34 age group. The report excluded 18- to 25-year-olds who are typically less likely to buy homes, owing to crushing student debt and bar tabs. Austin joined Denver, two cities in Utah and five other cities on the list.

"There's no state income tax in Texas, and there are job prospects in energy and industry. Both Dallas and Austin have great weather, if you like warm weather," says Adam DeSanctis, a spokesman for the NAR. "Millennials will be able to buy their first homes sooner than if they were in San Francisco or New York."

That's not to say that the Texas housing market doesn't have its flaws. Home buyers in this state pay higher closing costs than any other state in the country. But even with all the miscellaneous fees attached to the Texas home-buying process, prices are still considerably cheaper than they are in most other states.

The NAR also measured the likelihood that millennials would be able to find jobs in the cities where home prices were good, studying unemployment rates and job growth. The goal of the study was to highlight cities that could see a spike in first-time homebuyers.

"The unemployment rate in Dallas was 5.5 percent, so Dallas compared to Washington, D.C. But home prices are lower in lower in Dallas, and are very high here in Washington, D.C.," DeSanctis says. "There are other areas that have lower unemployment rates, but the home prices are a lot higher."

In a statement, Lawrence Yun of the NAR also pointed out increasingly limited job prospects, student debt, flat wage growth and tight credit conditions for reasons why millennials are being priced out of cities like New York and San Francisco. So the lesson is, it really sucks financially to be a millennial, so they might as well all move to Texas. We'll be waiting with open arms and cheap houses.


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11 comments
ozma207
ozma207

So, I'm wondering why the image at the top of the article is of the Pittock Mansion in Portland, Oregon.

becoolerifyoudid
becoolerifyoudid

Of course another factor is good ol' supply and demand.  Dallas (like most of the other cities on the list) has plenty of land around it, therefore there is a large inventory to meet demand.  Thus, keeping prices lower. 


This is the other side of the Michael Morris Evil Empire coin from yesterday. 

Chattering_Monkey
Chattering_Monkey

Bmarvel is not a fan of this article or millennials, not in his backyard

RTGolden1
RTGolden1 topcommenter

@ozma207 because Schutze charges to much to use pics of his house.

Los_Politico
Los_Politico

@becoolerifyoudid I hear this a lot, but consider the specific comparison of Dallas to DC, mentioned in the article. Our metros are of comparable size, so are our unemployment rates, and the sprawling nature (DC is not on an ocean, lake, or mountain range-- 'plenty of land around it'). Yet home prices in Dallas are cheaper. Why? 


I propose it is because our property tax rate runs about 3x higher and that our population has far fewer degrees (meaning we make less). Having lived in both places I find that most people are paying the same percentage of their income in housing. And most of the difference can be found in the amount of income spent on transportation (they spend way less in DC).

Chattering_Monkey
Chattering_Monkey

@becoolerifyoudid AHA!  I got it, they want to tear down bridges and make dallas walkable because once the cut the burbs off from Dallas, to be able to get here, you'll have to live here and then since space is limited the cost to live goes so high that you wont be able to afford a car anyways.  

becoolerifyoudid
becoolerifyoudid

@Los_Politico @becoolerifyoudid  Not sure if you are supporting my theory or opposing it.  D.C. is listed in the link as one of 5 other areas with a strong potential for first time homebuyers and as you say there is plenty of land around it.


I think property tax does play a large part in Texas.  For one it reduces people buying property as a speculative venture since there is a hard cost of carrying the property.  This minimizes both the bubbles and the busts.


I would think that people everywhere spend a similar percentage of income on housing.  The question is whether they can afford to buy a house with that percentage. 

becoolerifyoudid
becoolerifyoudid

@Chattering_Monkey @becoolerifyoudid  I would say that is accurate for some of the aforementioned "they".  Others genuinely like an urban environment similar to New York or San Fran, but seem to ignore (or be unaffected by) the realities of high housing costs or atrocious schools in DISD. 

Los_Politico
Los_Politico

@becoolerifyoudid I meant my comment to be in relation to your comment about the lack of hemming features around Dallas. There are only a few American cities actually on restricting bodies of water or next to mountain ranges. And those cities have a lot of factors driving up their prices-- the presence of secondary residences, low property taxes, historically better educated populations, existing transportation networks. It's not as simple as Dallas: flat SF: hilly. I see now you recognize that, most of my friends and acquaintances do not.


I am unsure if I favor our tax structure or not. On the one hand it absolutely reduces the effects of bubbles/busts. It also makes it easier to get into a house as a first-time buyer. On the other hand, once a homeowner it restricts the amount of price growth you can benefit from. A $300k house in Dallas and a $400K house in Alexandria, VA have the same carrying cost. But the Alexandria resident will have a more valuable asset. 

mavdog
mavdog topcommenter

@becoolerifyoudid @Los_Politico 

I would think that people everywhere spend a similar percentage of income on housing.

that isn't accurate. in some of the urban areas with the highest median hime value, such as San Francisco, the % is much higher than a lower median home value city such as Dallas. in these markets the income delta trails the housing price delta.

Second, the % of income spent on housing increases with lower and decreases with higher incomes. While the higher incomes do live in more expensive housing, their % drops into the lower 20s on average, while the lower incomes get into the mid 30s on average.

becoolerifyoudid
becoolerifyoudid

@mavdog @becoolerifyoudid @Los_Politico  Sure it's accurate- it's what I think.  :)


SF and NYC have high cost of living and there are some rural areas with very low cost of living, but generally people are spending 25% to 35% of their income on housing (according to me and not a formal study, but I do recall seeing some FHA guidelines about 5 years ago that makes me think I am not totally far off)


And don't forget, the rent is usually relatively low in the slums.

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