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 www.AustinHomeListings.com. 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?