Alex Friedman is a 31-year-old content creator and serial entrepreneur. She founded three startups, sold one, and was most recently an entrepreneur-in-residence at the TechStars (startup accelerator) music program before deciding to take a break after the death of a close friend of hers.
Friedman grew up in Southern California and moved to Austin, Texas about five years ago, so she joined the wave of complaints about Californians moving in, she joked. Friedman said she’s been thinking about buying a home for the past few years, and in hindsight, she should have bought during the pandemic, when mortgage rates were 2 to 3 percent and prices hadn’t skyrocketed. At the time, she hadn’t been in Austin long, and doing it all by herself in a new city during a pandemic was daunting to say the least.
Friedman called from a boat in Kakortok, Greenland, to tell me that the houses she had seen during the pandemic were almost dilapidated, but there were still people lining up outside to see them, offering all the cash. , or even wave checks. Friedman explained that things have slowed down, but she still sees homes that need a lot of work selling for more than $800,000 and $900,000, which is much higher than the average price in Austin.
“That’s when I realized it wasn’t worth the money,” Friedman said, adding that she and her partner live in a luxury 1,700-square-foot complex near downtown. There are two bedrooms, two bedrooms and one bedroom. Half bath townhome $3,500 per month. “It’s bigger and better than anything I’ve ever bought.”
While Austin home prices are down about 10% from their peak, home prices have risen more than 40% since the pandemic hit in March 2020, while mortgage rates have risen at the same time more than doubled Together, their affordability has deteriorated since the pandemic lows.Still, as far as Friedman is concerned, she can afford to buy a home in Austin, where the average price It was $557,292, but she didn’t think it made sense. Her income is not the problem, the problem is her income. Last year, Friedman said, she made more than $300,000 (gives a ballpark figure, since she prefers not to be specific).
“I could afford a house, and the problem was, I just did the numbers and realized it wasn’t the right thing to do for her,” she said.
Friedman explained that her income has grown significantly over the past few years. As an entrepreneur, sometimes she makes a lot of money, and other times she doesn’t make a lot of money, or not at all. But while Friedman’s income has increased, she doesn’t think buying a home is worth it, at least for now. One, any home that fits her criteria (in terms of location and size/type of home) would require a mortgage with monthly payments much higher than what she currently pays in rent. Let’s say she’s taking on a $650k mortgage (a house worth over $800k, the lowest she’s ever seen), with a 30-year fixed rate of 7.5% and Friedman’s monthly payments Will be $4,475 (not including taxes and insurance). That’s nearly $1,000 more than what she pays now for a luxury townhouse with all the amenities.
“The house I want, a house that really meets all of these criteria, is out of my price range right now,” Friedman said. It’s safe, and I don’t need to fix anything.”
She knows she could buy a fixer home or house that simply doesn’t meet her standards, but she’d rather spend the money on travel, or save enough to retire early. Let’s face it, she has no trouble paying her rent. Friedman isn’t the only high-income earner opting to rent rather than buy: Take this $275,000-a-year couple who rent in San Antonio, Texas, because it allows them to live in their preferred home. community, or in the case of the founder, who earns more than $200,000 a year, they rent in New York City in San Antonio, Texas, because she couldn’t afford a house in her ideal location. The question is, will the old adage “renting is effectively wasting your money, buying is an investment” hold true for much longer, especially for higher earners with higher standards?
“I don’t feel like I’m going to buy a house unless the perfect house comes my way, or it’s a deal, like I can get something so great for such a good price that I can’t say no,” Free “Because I really like the idea of that flexibility, I love the idea of renting to make my life easier,” Deman said.
When Friedman was younger, she thought she would own a house with a picket fence, but it doesn’t seem to make much sense to her now. Since she is renting, there are no responsibilities, or better said, far fewer responsibilities than owning her own home. Friedman doesn’t have to worry about property insurance or property taxes, which are higher in Texas than most states. Still, she wanted to stay in Austin. She even attributes much of her upbringing to city life, especially because of its ever-growing tech scene.
“For me, it makes sense to be flexible, to have someone who can fix my sink whenever I need it, to be able to travel, to be able to organize my life the way I want it without too many tying responsibilities like a permanent home,” Friedman said.
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