Excellent read on why Austin is NOT in a housing bubble (Pflugerville: real estate market, 2014)

[Komeht]

Several articles recently have stated that Austin's housing is "over-valued" implying that Austin real-estate is in a speculative bubble. While I agree that housing prices are steep (far too steep in my opinion) it has nothing to do with a speculative bubble. Our housing prices are not over-valued, they're appropriately valued due to lack of sufficient supply - this blog post sums things up nicely:

Austin is Not in a Housing Bubble. Sorry Trulia. Sorry Fitch. - urbanSCALE.com

Long story short - if you are waiting for the air to come out of the Austin real estate market to purchase you may be waiting in vain. Until one of two things happen, the supply is substantially increased or the demand is dramatically lessened, we will likely see prices continue to rise.

[austin-steve]

Thanks for the link. It is a well thought out argument that the author put a lot of time into.

[verybadgnome]

He is right, especially with #3. There is an X factor here and it is called quality of life. Actually not much different than in accounting where they have the intangible asset called goodwill.

[HappyTexan]

Either Austin is in a bubble or Austin is on their way to becoming one of the more affluent cities to live in.

I think the latter because you have the type of business to support the high prices.

I see Austin in comparison to SF, Portland, Seattle, etc. and not Compton.

[austin-steve]

This article does a better job than ABJ of gathering different perspectives as well.

New report: Texas home prices overvalued,

[zakas80]

Thanks for posting the links guys!

[ScoPro]

So, it's bon voyage to the few remaining petite bourgeoisie & proletariat.... and don't let the elite gates of Austin hit their collective behinds on the way out?

[Komeht]

Originally Posted by ScoPro

So, it's bon voyage to the few remaining petite bourgeoisie & proletariat.... and don't let the elite gates of Austin hit their collective behinds on the way out?

Looking that way, until we can realize that we must alter the equation by dramatically upping the supply and choice of housing types to meet the demand.

[Aquitaine]

and don't let the elite gates of Austin hit their collective behinds on the way out?

While I don't think this eliminates your concern, I think it helps to have some idea of what the real 'elite gates' in the USA look like - coastal cities where $500k will get you a studio or a 1BR apartment. Sure the pay is higher but it ain't that much higher.

San Diego, San Francisco, New York, even Hoboken, Los Angeles - Seattle and Portland are often compared to Austin and are both more expensive, though still not as bad compared to some.

I'd also have a look at how far out of city center you have to go before you find anything really affordable. In Austin that's Pflugerville, Manchaca, or Buda. That's still very accessible. In NYC it used to be Park Slope, and then Windsor Terrace, and now it's pretty much 1 hour from Times Square on the subway before you're looking at anything I'd call affordable.

[ScoPro]

Maybe I should've put a winkie emoticon in my post.

Seriously, this is the free (somewhat) market at work.