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Another “over-valued” report


I have watched and written about this for a long time.  In this market cycle, see Housing Bubble (January 2014) and Case-Shiller and Market Bubbles (November 2014).  It’s already time to comment again because the Austin Business Journal posted an alert on the subject today:

Austin home prices most overvalued in the country, key ratings agency says

As I have pointed out before, there is a difference between home prices being bid up to unrealistic levels through sheer speculation, and the way Central Texas home values are being driven by real supply and demand forces, supported by strong employment and population growth and buying power provided by a still very conservative mortgage lending industry.

Austin’s demographer still estimates that the region is gaining 110 net new Austinites per day.  Even with that growth, though, the Austin Business Journal also published this today:

Austin unemployment rate drops to second-lowest level of 2014

Notice the chart in that article, showing that the direction and slope of the unemployment rate trends in the US, Texas, and Austin are essentially the same, but the level of unemployment in Texas is lower than the national average, and the Austin unemployment rate is well below both.

One last point that I also made recently (see More on Austin-area home prices and affordability):  Even with the increase in home values that we have seen, Austin’s Housing Affordability Index remains about the same as the national average.

So, yes, home values are up, but are homes here overvalued?  Ask yourself:  Compared to what?

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

Discussion

3 thoughts on “Another “over-valued” report

  1. Amen brother, amen!

    MS

    Posted by Mark Sprague | December 19, 2014, 3:58 PM

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  1. Pingback: Affordability Pressures in Austin | Bill Morris on Austin Real Estate - December 15, 2015

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