It's going up quite a bit (asking prices are up 6.2% y/y [1]), but it's still well within reach for most people in the tech industry.

The average house price is currently $213,600 [1]. It's considerably cheaper if you're willing to live in Pfluegerville or Round Rock and commute. Houses out East (where I live) are still fairly cheap and have a reasonable commute to downtown. People seem to miss that commuting East-West generally hits less traffic in Austin than commuting North-South…

If you have to live downtown or in one of the hot neighborhoods, you're obviously going to pay more for the privilege. If you're willing to be a little further out or live in a less desirable neighborhood, the housing prices in Austin are still pretty reasonable.

[1]: http://www.zillow.com/local-info/TX-Austin-home-value/r_1022...

Within the still-walkable neighborhoods (Clarksville, Adams-Hemphill, Rosedale, etc.), yes. $500K will be around a 1500-1700 sf SFR, and you will need to put in some elbow grease after closing day. Bay Area and San Jose are used to houses of that size, but many families in Texas look for 2500+ sf. Around that range, price tags start around $800K for a turnkey SFR move-in, and go up rapidly from there. Condos in the walkable downtown area are around $600K for a family-livable 1400-1600 sf.

Police coverage in these areas is strictly just who is on duty for those neighborhoods; you are not going to find lots of families of police living in these pricey neighborhoods, so the demand from residents to hire a lot more beat officers for the higher densities (and the increasing crime that the influx of population is bringing) will be pretty intense in the near future. Fire departments have not been really upgraded to suitably manage high-rise fires. Austin did significantly improve its central area sewage "backbone" capacity with a massive upgrade to a very large downtown pipe, but no new treatment plants are coming online soon. New fresh water plants and sources are especially scarce looking out over the 20-30 year time horizon.

All of this is to say if you think the about-2.75% property tax (and no Proposition 13) at these kinds of prices gives you sticker shock even after accounting for no state income tax, be sure to plan for even more property taxes in the 20-30 year time horizon. There is plenty of infrastructure spending to come that was deferred and will be demanded by residents in the higher-density future. You do not have to report your sales/purchase price in Texas (but naturally you still report sales price to the IRS), so property tax assessment and challenge becomes a blood sport here for some people; as property prices for SFRs start commonly hitting $1M+ in a few years, expect that to intensify. A lot of the NIMBY'ism pointed out in this thread that afflicts SF is even stronger in these Austin neighborhoods, who have very active neighborhood associations regularly lobbying city council members. In short, there are a lot of very good reasons Austin residential real estate in the central neighborhoods will explode in prices in the current boom.

If you are childless and in a $90K and up bracket, and especially if you are a professional couple with each earning that, then these numbers can possibly be finessed in your personal finance (if you ignore saving for various goals). It's a very comfortable lifestyle, but kind of "fake it 'til you make it"; it gets pretty challenging with children in the picture.