A different kind of bubble?

[James H.]

AN EDUCATION BUBBLE?

Well, as I have shared a few times, I'm looking for a new primary residence. During my search I recently found a couple of homes within a block of the local major university, The University of Texas at Arlington, student body 30,000+.

Being a recent college grad (is 4 years recent?) from UT Austin (the Texas flagship university)and nearing completion of my master's degree at UT Arlington, those properties were/are particularly appealing to me. Over the last decade, UT Austin (obviously in Austin, not Arlington) has expanded a lot and RE around it has always been high, now unbeliebably high.

The properties around UT Arlington are far more affordable than those of its Austin counterparts. And the school is in a rapid expansion stage with several new buildings completed, new student housing, city-university partnerships and more stuff in the works. So it seems a no brainer to snag a nearby property if possible and if it makes sense.

But then I got to thinking. Universities across the nation have been expanding over the last decade. The recent recession has not appeared to have had much of a noticeable effect on that growth either. With all this expanding and with government budgets getting tighter and tuitions skyrocketing to infinity, I wonder if higher education is nearing a bubble peak. If that is that case, I wonder what effect that could have on RE values for properties near universities. Is now a time to re-evaluate whether or not proximity to a university justifies a premium?

What do you guys think? How does this compare to your local university situation?

Brian