Sign up for the Austonia daily newsletter

become a member

(Philip Taylor/Flickr)

Once a bargain-hunter's paradise, Austin's reputation as a cheaper California seems to be dissipating. But does money have more value in Austin when compared to other U.S. metros?

For Carson Stanch, who moved to Austin from Brooklyn, New York, to be near family, Austin's lower cost of living was just an added bonus. According to the latest data from the U.S. Bureau of Economic Analysis, a $100 bill is worth $98.20 in Austin when compared to the national average in 2020, while it's worth just $84.53 in New York.

Houston native Carson Stanch moved from Brooklyn, New York to Austin just before the pandemic. (Carson Stanch)

Stanch soon realized she was a trendsetter—or perhaps a fortune teller—as the pandemic hit a few months after her move. No longer willing to spend extra money on their more expensive apartments, Stanch said many of her friends and other New Yorkers left the city amid COVID lockdowns.

"It's so expensive to live there (and) all of the reasons why you live in New York, you couldn't really do anymore," Stanch said.

Garrett Watson, a senior policy analyst with the Tax Foundation who wrote a 2018 report on the value of $100 in U.S. metros, told Austonia the report factors in the costs of goods and services with residents' incomes and compares them to the national average. The result is price parity, a number that varies drastically across the country—for instance, a $100 bill won't get you near as far in Austin as it would in more rural parts of the Hill Country.

While a Ben Franklin note was worth $4 more in New York in 2020 when compared to 2018, a $100 bill decreased by $1.60 in value in Austin. Austin's cost of living also saw the 12th-highest increase among U.S. metros from the 2010 to 2020 census.

And as the pandemic's nationwide housing boom gained extra momentum in Austin, peaking at a median home price of $575,000 in June 2021, Watson said the value of $100 could have dropped even further.

"There's just been a chronic hunger for building houses on the coasts and in certain cities in the heartland," Watson said. "Especially this year, we're seeing more and more discussion about that in Austin, and so that is a big, big factor."

Price parity bleeds into other factors as well—in San Francisco, where the value of $100 sits at $82.63, residents are nearly 18% poorer than their higher incomes suggest. But with higher incomes than the U.S. average, they may find themselves more flush with cash when moving to a cheaper city like Austin.

Many out-of-towners have used that extra change to make housing offers much higher than the asking price, Redfin chief economist Daryl Fairweather told Fox7 Austin.

"All those migrants are bringing with them high-paying jobs who are used to much more expensive housing and they’re willing to pull out all the stops to win these homes and move to Austin," Fairweather said.

But Austin is catching up to those traditional hotspots: the area was predicted to be the most expensive metro outside of the Golden State by the end of 2021.

In just two years, Stanch said she's seen some signs.

"I feel like I look around certain areas of Austin (and) they do feel more similar to downtown Brooklyn," Stanch said. "Some businesses I see might tend to cater to folks who have a little more income."

So why not move to, say, Florence, Alabama, where money is almost 20% more valuable?

Watson said the difference comes down to the value of amenities—something the study can't track.

"Part of the value in New York City is all the amenities that you're near, the value of Broadway, the value of being able to get food delivered to your door," Watson said. "So that may be reflected in people's willingness to pay higher prices... there's a lot of really great reasons why people may want to be in Austin from an identity perspective that you can't get in other parts of Texas."

In Austin, tech salaries rose 5% from 2020-2021 as big-name corporations like Oracle and Tesla—alongside Tesla's billionaire owner Elon Musk—flocked to the nation's new "boomtown." With an ever-increasing job market, eclectic culture and reputation as one of the world's best cities for move-ins, Austin's appeal might still offset its price.

But for Stanch and many others, there may still come a time when price wins over location.

"If I was to the point where homebuying was more important than being near friends and family, then I would move to get the home," Stanch said. "I think that's kind of part of my plan."


A Web3 meetup was held this week at Cosmic Coffee + Beer Garden. (Andrea Guzman/Austonia)

A theory that’s been swirling around lately is that the web as we know it is on its way out and something called Web3 will take over.

Keep Reading Show less

Startup Otter Network launched new tools in its product suite, Otter Director 2.0 and Teleport. (Otter Network)

In the summer of 2020, Nick Tangborn got up close and personal at concerts. As CEO of Otter Network, a local video production tech startup, he and his team live-streamed video at ACL Live at 3TEN showcasing soul band Tomar & the FCs, rock 'n' roll band Western Youth and indie band Moving Panoramas, among others.

Keep Reading Show less