Thursday, February 23, 2006

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.

1 comment:

Michael said...

It's hard to have a bubble and rising prices when there are no homes for sale. There are so many neighborhoods in Austin that would generally have at least 10-15 homes for sale and now have 1 or 2 and some none for months on end. Check out Brykerwoods, Rosedale, Bartoncreek west. See the quick search at No Homes. If ones comes up, it sells in minutes with about 5 offers. What happended to living for $300 a month in 2/1 in hyde park?