Amazon Effect?

[scfr]

This question is being posted in the Real Estate Investing section because it is being asked from an investment standpoint.

DH & I are planning to relocate. The decision of when we will relocate is 100% up to us.

We are currently in Austin, TX. Austin is one of the contender cities for the new Amazon headquarters.

Strictly from a financial standpoint, do you think we should stay in Austin until after Amazon announces their decision? And if we do stay until after the announcement is made, and if Austin is chosen as the location for Amazon's new HQ, how long do you think we will need to stay in order to see our home's selling price increase by enough to make delaying the relocation worthwhile?

(The city we are currently planning to relocate to has the same overall cost of living as Austin, so we would neither be saving nor spending more if we were to relocate immediately. The decision to stay put would be based on the hope for real estate value appreciation.)

[LivingAlmostLarge]

couple of years after they start HQ probably. Are you willing to stay 3-5 years?

[disneysteve]

I don't think I'd base the decision to sell my house and move on the actions of one company. Maybe it will bump up prices a bit. Who knows? You could stay there for a couple of years and nothing could happen. Or something could happen in your future locale that affects prices there.

I say move when you both agree that you're ready to go.

[msomnipotent]

Austin is a pretty big city. You would have to be pretty close to their headquarters to see a bump in price, and that is after they actually move in.

[kork13]

Austin is a pretty big city. You would have to be pretty close to their headquarters to see a bump in price, and that is after they actually move in.

This is my thought as well... If you live within a few miles or within a notable neighborhood where it's likely for Amazon employees to be house hunting, there's a chance for a noteworthy value increase to occur. You likely wouldn't realize that gain until at least a year after Amazon's facility is built & operational (so likely 3-4 years minimum). Otherwise, average values may appreciate somewhat, but it likely wouldn't be significantly more than a normal annual value appreciation.

[TexasHusker]

I wouldn't let my relocation be dependent upon Amazon, but I darn sure wouldn't sell the house yet, either.

Austin is a boom town (city). Whether or not Amazon moves into Austin, it's still a boom town. Furthermore, Austin is well-insulated from the "bust" phenomenon due to the high number of governmental jobs there, the fact that it is the state capital, and the fact that it is home to a flagship university.

Nashville, TN shares a lot of the same metrics as Austin.

Over the long term, the value of your home in Austin is going to do one thing: Go up. Guaranteed. And it's REALLY hard to find GUARANTEED investments these days. So...owning and keeping real estate in Austin makes a lot of sense.

If you relocate, simply rent the home out. Someone else will then be paying for your fine investment for however many years you have left on the note. And when they are through paying it off, thank you very much, you are going to own a substantial asset outright, to do what you want with.

[scfr]

I wouldn't let my relocation be dependent upon Amazon, but I darn sure wouldn't sell the house yet, either.

.....

If you relocate, simply rent the home out. Someone else will then be paying for your fine investment for however many years you have left on the note. And when they are through paying it off, thank you very much, you are going to own a substantial asset outright, to do what you want with.

Thank you for the comments, TH.
Keeping the Austin home was something I thought about and brought up to DH, and while it makes sense on many levels, I don't think we will be doing it. The distance from the new location to Austin is pretty far, property tax is high, and standards for home upkeep to stay out of trouble with the HOA are also high. I'd be willing to try to figure out how to make it work (I think it could be a nice income stream and asset diversification), but DH definitely doesn't, and it's not something that I feel so strongly about that I want to try to convince him. BTW, there is no note on the house.

[TexasHusker]

Thank you for the comments, TH.
Keeping the Austin home was something I thought about and brought up to DH, and while it makes sense on many levels, I don't think we will be doing it. The distance from the new location to Austin is pretty far, property tax is high, and standards for home upkeep to stay out of trouble with the HOA are also high. I'd be willing to try to figure out how to make it work (I think it could be a nice income stream and asset diversification), but DH definitely doesn't, and it's not something that I feel so strongly about that I want to try to convince him. BTW, there is no note on the house.

I bet you could make a fortune renting it out. You could always hire a property manager to keep things tidy.

The rent from that home could well pay off your NEW home.

I would pitch it to your DH. When I moved to real estate, I found I got a lot more sleep not worrying about what my 401K was going to do at the market open tomorrow, worrying about asset allocation, etc.

[Jluke]

I found I got a lot more sleep not worrying about what my 401K was going to do at the market open tomorrow, worrying about asset allocation, etc.

market close, not open. most funds in a 401k aren't priced until the market closes.

for any of the casual readers out there; hopefully my statement is correct, barring some exceptions I imagine.

[TexasHusker]

market close, not open. most funds in a 401k aren't priced until the market closes.

for any of the casual readers out there; hopefully my statement is correct, barring some exceptions I imagine.

The share price of your mutual fund indeed is calculated after the markets close, but it is calculated based upon any buying and selling your MF did throughout the day, and the closing share price of each of its holdings.

My point is that real estate gets you out of a fixation on the equities markets.