News Ticker

Austin Real Estate Market in a Bubble? Experts are saying NO!


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There’s been some buzz about Austin being in a “housing bubble” and poised for a crash, but we want to give you the facts. Is the Austin real estate market in a bubble? The economic experts say, “no,” and here’s why. Real estate bubbles are driven by speculation. Prices rise not because demand for housing is increasing, but because buyers believe prices will continue to rise in the near future, increasing the value of their investment and presenting the potential to “flip” properties quickly. That type of speculation is not what is Austin’s current housing demand.

POPULATION AND JOB GROWTH: KEYS TO A HEALTHY MARKET

In Austin today, housing demand is being driven by population growth. According to Austin City

Demographer Ryan Robinson, there are 110 people moving to the Austin area everyday and our

unemployment rate in August 2014 was 4.6 percent, which is 1.5 percent below the national average.

LENDING STANDARDS HAVE CHANGED

Due to the housing crash last decade, lending standards for homeowners are some of the most stringent

seen in recent years, so only those who can afford a home have access to the financing to buy it.

SO, IS AUSTIN OVERVALUED? NO!

Recent reports paint an incomplete picture of the Austin market. They use only ratios comparing income

to rents or home prices, leaving out the two key variables of job growth and population growth. Without

understanding how increased population and availability of jobs affects demand for real estate, a market

can’t be properly valued.

To read more of this article head over to Abor!

About Gregg Klar (386 Articles)
Austin creates an oasis of desirable communities that are touched by the beauty of it's presence. I'm one resident who considers myself fortunate to be a part of the Austin lifestyle. Combining a passion for my work with love for my community, I've earned my place among Austin's leading real estate professionals. I bring to every transaction a personal touch, innovative marketing techniques and in-depth knowledge of today's complex market to ensure your home sale or purchase is a success from start to finish. Put my team of experts to work for you today

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