Austin in a housing bubble?

[cBach]

Yes it is. There are many investors here, driving up prices. There will be a price correction to drive these investors out of the market, but it won't happen for a couple of years I predict.

[787]

There's too much open land to justify a bubble. Run a search for empty lots in the hill country, and Lakeway/Lago Vista lights up with hundreds of residential lots for $3000-$30,000 range. Pretty cheap actually. What's hard to come by is acreage east of 35 for some reason. People just aren't willing to give up fertile farmland in this town for some reason.

[buffettjr]

Originally Posted by llkltk

Areas in SW Austin have gone from 260K to 320K in less than three years! That's nuts!

Inflation is like 3-4% per year, so you're only talking 3-4% increases per year over inflation. That's not so nuts in a city with a rapidly rising population and with gentrifying areas.

[Trainwreck20]

..and some of those areas that are going from 260k to 320k were at 280K a year or two before that.....

[buffettjr]

Originally Posted by EzPeterson

True. That's where the "double digit growth isn't sustainable" comes in. A year or two of rapid increase is just that - when it becomes a speculative investment banking on double digit growth, that's when "bubbles" appear.

Yes that rate of growth each year isn't sustainable, but that doesn't mean all the growth before it will suddenly collapse and houses will halve in value. They would simply even out in price unless something else has happened such as the population has halved or lending standards have drastically changed to halve the population who can qualify for a loan.

[CptnRn]

Originally Posted by scm53

Directly tied to our job growth - people moving here faster than the housing supply grows. Econ 101.

No one in Austin should have any interest in being like the most undervalued city.

I agree. Local economists have been predicting this for the last 3 years, it's not like this should be any surprise to anyone who has been paying attention.

Angelou predicts double-digit growth rates in real estate properties for the next three to four years

Angelos Angelou 2012-2013 Economic Forcast

Worst Housing Markets For The Next Five Years

2011-2012 Economic Forcast for Austin Metro Area

Apartment building lagging behind demand...