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Matthew McConaughey is reportedly weighing a run for Texas governor in 2022.
The Austin resident and Oscar winner has been "quietly making calls to influential people in Texas political circles, including a deep-pocketed moderate Republican and energy CEO" as he decides whether to run, according to Politico.
McConaughey said a gubernatorial run is "a true consideration" while on a March episode of Houston's "The Balanced Voice" podcast.
Although most political strategists doubt McConaughey's commitment and viability as a candidate, some are still intrigued by the possibility.
"I find it improbable, but it's not out of the question," Karl Rove, a top Republican strategist with a long history in Austin, told the political news site. He added that the big question is whether McConaughey would run as a Republican, a Democrat or an independent.
Brendan Steinhauser, an Austin-based GOP strategist, told Politico he's surprised McConaughey isn't being taken more seriously. "Celebrity in this country counts for a lot," he said. "It's not like some C-list actor no one likes. He has an appeal."
Texas Gov. Greg Abbott plans to run for a third term and remains popular among Republican voters, 77% of whom approve of his performance as of April, according to the Texas Politics Project.
Some strategists believe an independent McConaughey run would benefit Abbott. But a recent poll from The Dallas Morning News and the University of Texas at Tyler found that McConaughey would beat Abbott, 45% to 33%, with 22% opting for someone else.
Mimi Swartz, an executive editor at Texas Monthly, mulled a McConaughey run in a recent opinion essay from the New York Times. "Texas may not be ready for a philosopher king as a candidate, much less governor," she wrote. "May the best man win, man."
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Austin home buyers are facing yet another hurdle as they battle high prices and bidding wars to get their patch of land: buyers are having to put more down—in cash.
Due to increasingly rising home prices, appraisers are skeptical of current values, which is putting buyers, more often than not right now, in what's usually a rare situation of having to fork up more money between what they agree to pay and what the appraisers say a home is worth.
The impact? Local mortgage brokers and realtors say it's pricing out some first-time homebuyers, who lack the cash from selling a home.
'A super heated market'
The median home sales price in the city of Austin has grown 22% in the last year, rising to $514,000 in March, according to the Austin Board of Realtors. A recent Redfin analysis found that the average home in the five-county Austin metro sold for 7% above its asking price, more than any other metro.
These high prices are the byproduct of a basic economic equation: high demand plus low supply. In an effort to compete, some buyers are offering more than $100,000 above asking price. Nearly all of them are waiving an appraisal, which means they commit to buying a home even if it is appraised for less than their offer price. This is the case 98% of the time, says Sydney Schuster, a realtor at Open House Austin, a real estate education company that specializes in first-time homebuyers and investors.
With sales prices rising so quickly, appraisals—which are based on historical sales data—often lag behind the offer price. "The problem is, if (a) house sold in April, it went under contract in March, two months ago," said Ashby McDonald, a loan officer for the Austin lender Highlander Mortgage. "In this super heated market, two months might as well have been two years."
How the math works
Let's say you want to buy a home in Austin. You're up against a lot of competition, so you bid $550,000 on a house that's listed for $500,000, planning to put 20% down. The seller picks your offer, and you enter into a contract and order an appraisal, scheduled by your lender, who has agreed to finance 80% of the appraised cost. Based on historical data, the appraiser values the home at $500,000. As a result, you can only get a loan for $400,000 and have to make up the difference in cash, fast. Your down payment just grew from $100,000 to $150,000.
Preparing for the worst
Aware of this trend, mortgage brokers and lenders are leveling with their clients. "Anyone who comes in looking for a house, I prepare them for the possibility that they will have to put down more than they think in a down payment because of this," McDonald said, adding that a down payment needs to be at minimum 10% of the offer price—and more likely 20%—to be competitive.
As a result, many buyers are required to make offers on houses that are less than what they can afford in terms of a mortgage but which allow them more flexibility in terms of a down payment or in case of a low appraisal. "I don't feel comfortable working with a client who's not prepared for the worst-case scenario," Schuster said.
Some clients are able to make such accommodations to be competitive in the current market. But those at the lower price range have nowhere else to go. "So you're priced out," said Dr. Luis Torres, a research economist at the Texas Real Estate Research Center at Texas A&M University.
There is room for hope, however. Austin's housing prices are at historically high levels, which are impossible to sustain in the long term, Torres said. Already McDonald is seeing the gap between appraisal values and offer prices shrink as the historical sales data catches up to current market values. "It's just that the growth has slowed down from insane to crazy," he said.
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After a slight pandemic slump that was a rare boon to tenants, Austin's rental market has rebounded. Fueled by job growth, relocations and an increasingly pricey housing market, the average monthly rent in the Greater Austin area rose to $1,335 in April, exceeding pre-pandemic rates, according to the latest market report from ApartmentData.com.
Bruce McClenny, president of ApartmentData.com, attributes this change to increasing demand, which gives landlords the confidence to raise rents. Since January, the Austin market has absorbed a monthly average of 1,403 units, meaning that renters have leased that many more units than were vacated. This absorption rate is significantly higher than that of the first four months of 2020. "Absorption is demand," he said.
Other metro rental markets are seeing similar gains, McClenny said, but Austin has some specific advantages. Job creation by companies such as Tesla, Oracle and Samsung and the return of some leisure and hospitality sector positions fuel demand. So too does a steady rate of relocations. Data released by the U.S. Census Bureau on Tuesday shows that the five-county Austin-Round Rock metro grew faster than any other metro area in the country between 2019 and 2020.
Up until early this year, the local rental and housing markets were on divergent post-pandemic paths. Renters were more likely to have suffered job loss as a result of the pandemic or to work in impacted industries, such as hospitality. A glut of new construction in recent years also meant that supply outpaced demand.
The housing market, on the other hand, saw increased demand due to continued job creation, especially in the tech and professional sectors; a millennial-heavy population, with many members starting families and looking for more spacious residences; and record-low inventory.
The scorching housing market may now play a role in the rental market rebound as record-high sales prices and record-low inventory prolong, or even halt, some prospective homebuyers' searches. "Austin's home market is probably hotter than ever," McClenny said. "That has to play into the rental market right now."
The rental market rebound appears to be spread out across suburban and urban core areas. The fastest growing submarkets, according to the ApartmentData.com report, over the past three months are:
- Cedar Park-Leander-Four Points
- Downtown-South Congress-Barton Springs
- The University of Texas at Austin-Mueller area
During the pandemic, residents flocked to the suburbs in search of more space. Despite this urban flight, Austin's urban core submarkets are rebounding more quickly than those in other Texas metros. "Austin has such a unique, desirable urban core," McClenny said, adding that the city's mobility challenges may also be at play as renters return to the office—and their commutes.
The ongoing reopening process is one reason to believe the Austin rental market will continue to grow this summer, which is a typically strong leasing season. One concern, however, is the relatively high number of apartments under construction—nearly 16,000, according to the report—which could temper growth if there isn't enough demand to absorb them.
"You've got a few competing elements here," McClenny said. "I could see a scenario with reopening where it just pushes demand and rents higher."
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Despite production delays and global supply chain issues, Tesla broke records during the first quarter of 2021, producing and delivering more vehicles than ever before, according to an investors earning call on Monday.
"The demand is the best we've ever seen," CEO and new Austinite Elon Musk said, adding that the electric automaker's Model 3—which starts at $35,000—is now the best selling luxury sedan in the world, supplanting the BMW 3-Series.
Confident as ever, the upcoming Saturday Night Live host expects this success to continue, predicting that the Model Y—Tesla's midsize SUV, which starts at $46,690—will be "the best selling car or truck in the world" by next year.
In addition to these updates, Musk also said that construction of the Tesla Gigafactory in Southeast Travis County is moving along and expected to begin limited production of both the Model 3 and Model Y vehicles by the end of this year, with volume production to start in 2022. "We're building factories as quickly as we can," he said.
Tesla also addressed a recent fatal crash in the Woodlands, north of Houston, earlier this month. Two men died after their Tesla Model S veered off the road and hit a tree; the car then caught fire. Neither of the men were behind the wheel, leading officials to believe no one was driving at the time of the crash. Musk blamed "extremely deceptive media practices" for connecting the crash to Tesla's autopilot technology, which is currently under federal investigation.
Feds join probe of fiery fatal Tesla crash in Spring https://t.co/plaudiWV0L
— Houston Chronicle (@HoustonChron) April 20, 2021
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