Is all of Austin and area, one big overinflated housing bubble? (Houston: real estate market, condos)

[Tiger Beer]

Is all of Austin and area, one big overinflated housing bubble? If not, are there somewhat desireable areas nearby Austin that aren't?

[centralaustinite]

Short answer: NO, none of Austin is part of a "big overinflated housing bubble."

Thanks to tougher rules for HELOCs and punishing property tax, Texas as a whole did not experience the rapid rise in prices or their subsequent fall. Dallas for example is one of the best performers in the Case-Shiller RE price index (Austin is not part of the index).

Also the tech bust of 2001 had an impact here that only ended as the national bubble peaked around 2006-07.

The Austin market has been essentially flat over the past year which is a tremendous achievement in contrast to Florida, Nevada, California, etc. In comparison with the rest of the nation, there has been no real estate bubble in Austin. Expect prices to remain the same, small declines in some areas, small increases in other areas. The Austin market is a series of very local markets which can vary widely.

good luck!

[HappyTexan]

What tougher rules for HELOCS ? Texas has always had tough rules on home loans. We only got HELOCS in 97 and even then you cannot take out more than 80% equity for loans.

What tougher rules did Texas make ?

[TexasHorseLady]

Originally Posted by HappyTexan

What tougher rules for HELOCS ? Texas has always had tough rules on home loans. We only got HELOCS in 97 and even then you cannot take out more than 80% equity for loans.

What tougher rules did Texas make ?

I think the poster may have meant that Texas has tougher rules on HELOCS than other places that experienced overinflated housing bubbles. We never did that - we just had slow, steady gains over time.

[lpc123]

Originally Posted by bpollard

Austin homes are overpriced, study says - Austin Business Journal:

Tenth place for a major metro area is not exactly frightening, but it is a bit troubling.

[makeyes]

Within 1-2 years local economists have predicted Austin will experience a housing shortge and that will drive up demand and prices.

[centralaustinite]

Happy Texan, you have it right, Texas has always been very tough on HELOCs, as you noted Texans did not even have that option until 1997. Many other states had very loose requirements for lines of credit and that contributed to the current problem, ie people bought homes at peak bubble prices and then immediately took out lines of credit against the loans, then when the value of the property dropped, they were seriously underwater (owed much more than the property was worth). This happened all over California, look at the Irvine Housing Bubble blog, if you want more info.

FWIW, I have seen several people (maybe even Austin-Steve) attack the Austin Business Journal article as mistaken with some convincing evidence. In any case, don't let one article sway a major decision like a housing purchase.

[FalconheadWest]

Originally Posted by bpollard

Austin homes are overpriced, study says - Austin Business Journal:

If you read the entire study, it talks about how they use price reductions as the gauge for being overpriced, which is the most ridiculous thing in the world. Markets who have lost a lot of value are pricing their homes lower and not doing many price reductions as they already chased the market down, and many of the sellers in Austin, Dallas, Houston have reduced their prices just to sell them and take advantage of the $6500 move-up credit. If they can sell their homes for less than what they want but buy a house with a much lower interest rate and pocket $6500, it's a win-win.

Austin is not overpriced... though some sellers individually area.

[mark311]

Originally Posted by Tiger Beer

Is all of Austin and area, one big overinflated housing bubble? If not, are there somewhat desireable areas nearby Austin that aren't?

Sure, you can get some good size homes in safe neighborhoods for under $200,000 in a lot of the suburbs that surround the city of Austin. As long as there are buyers willing to pay the current prices, then it's not overpriced in my opinion.

[orbius]

I think its a misnomer that just because property prices in Austin arent sky high that there cant be a bubble. Houston in the 80's had a massive property bubble burst and house prices were relatively low there compared to the rest of the country.
Theres some really rotten property and subdivisions in Austin that were hastily thrown up to cash in on the 'boom'. Not to mention a massive glut of downtown condos with more coming online in the middle of the worst real estate market in decades.
Combine that with sky high property tax bills and a not very rosy employment picture and its my opinion that the worst is yet to come for Austin.