Austin RE market craze - is that a bubble?

Question

Hello BP! We moved in Austin one year ago and was shocked how big SFH demand is! Almost every house has multiple offers, Even not that pretty ones :) so the question is: how long will that craze continue ( in your opinion)? Is it even possible to fund the cash flow rental property? Is that a bubble and when is it going to burst?

Please share your opinions 😊

Dan Burstain · Answer

We didn't burst during the oil crisis.  We didn't burst during the dot com bust.  We didn't burst during the housing crisis.  We will be fine.  Prices are climbing as we speak.  We are about to be the 10th largest city in the nation expected to double in size in the next 15-20 years.  Now Tesla is coming to Austin and the jobs keep coming.  Time to get in is now.  We have 40 years of data that shows people should invest in Austin sooner than later.

Jordan Moorhead · Answer

@Anastasia Papyan this is the case in most major markets in the US. Austin has a high demand, very diversified employment and people just plain old want to live here. I would say if anything Austin is the most protected market in the country, especially if companies like Tesla keep moving in!

Michael Mullins · Answer

As long as we have a high demand for jobs in the Austin area, housing will be crazy high.

Danny Webber · Answer

I do not think our pricing will go down anytime soon. We have been really insulated from the outside world in regard to RE.

There are still deals out there for sure.

Ronald Rohde · Answer

its not a bubble for a lot of the same metrics that TX wont burst either. I'm bullish on TX for a pretty long time, even if the state votes for Biden, state offices and government will continue to be pro business.

Aaron Gordy · Answer

Best advice is to buy as much as you can. The city has been booming for a very long time. Check out the census data over the decades. Its spectacular. There are many reasons why folks move to the metro but the most important reason is that Austin is a job creating machine with open arms to entrepreneurs and also giving fat tax rebates to the big companies like Tesla. There is and has been for a long time, a real sense of opportunities here in Austin.

Rob Lee · Answer

Austin is the most expensive city in Texas. Five years ago homes were twice as much as those here in the North Dallas suburbs. Have you considered investing in DFW?

Bryan Noth · Answer

@Anastasia Papyan as @Danny Webber, @Dan Burstain, and @Michael Mullins have said, I do not think Austin is a RE bubble waiting to burst.  Employment is well diversified in the Austin MSA which makes is remarkably resistant to external economic factors.  Home values have appreciated steadily and if you compare those alongside other growth factors such as population growth, job growth, median income growth, etc the trending increase in home prices is actually quite stable.  Certain areas have seen more rapid price escalation, typically from forced appreciation via rehabs in the area, incoming developments and market compression.  But on the whole, it is has been a terrific area to invest in for many people.  The appreciation play is never certain, but it is not a gamble on hope, it is based on extensive statistical analysis of future expansion developments and years of data tracking solid growth.

Bruce Lynn · Answer

More demand than supply keeps pricing going up.  As long as people want to live in Austin the party keeps going.

Tough to move the capital, but it has happened before.   I think tough to move UT, but we'll have to see how students learning online this Fall.  Loosing 50,000 students to online learning could hurt.

Austin RE market craze - is that a bubble?

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