Bubble? What Bubble?

Housing bubble? Not here in Austin. Out-of-town investors continue to keep the home sales market humming right along. To an investor from California, $290,000 for a 40-year-old three-bedroom/one-bath house is a steal. Smaller houses in my neighborhood are being razed and replaced with two-story duplex-style “Metrohouses” like these. These sparse, modern designs aren’t for everyone, but at least they put some thought into it as opposed to just barfing up a big retarded box.

A cursory glance at sale prices reveals a steadily dwindling number of affordable homes. What would’ve bought you a house on a big lot five years ago would barely cover a modest condo today. Needless to say, wage growth hasn’t paralleled this jump.

Even without the much-maligned investors driving up prices, you’d still have everyone who fled their hometowns for so-called “Liberal Archipelago” cities like Austin, Portland, Seattle, Chapel Hill, etc., after the same limited supply. All of these potential buyers want centrally-located real estate in culturally-thriving communities. The demand for this property will only go up as rising energy costs make suburban living an increasingly unsustainable proposition.