In Austin, no housing bubble

AUSTIN – There is no denying the sizzling state of the Austin area housing market. Home prices are rising across the region. Some sellers are getting multiple offers on their homes within just days of putting them on the market.

Buyers are engaged in bidding wars, forced to offer above sellers’ asking prices. This has some people asking: could a housing bubble be forming?

Experts say Austin’s housing market is simply responding to legitimate supply-and-demand issues, not to speculation, Wall Street mortgage bond-financing machinations, easy credit and other conditions that burst the housing bubble in many markets in the country a few years ago.

Rather, in Austin, prices are going up because of Economics 101: Demand is up due to job and population growth, and there simply isn’t enough housing to handle the influx of newcomers and current residents looking to buy, experts say.

The Austin area is seeing about 130 people a day moving to the region, said Mark Sprague, a housing market and financial industries analyst with Independence Title in Austin.

Sprague said in the Austin area this is no bubble, but rather genuine demand for shelter paired with a low inventory of desirable homes.

Experts say area prices are not spiking at nearly the rates that precipitated the 2008 housing and financial collapse.

In the Austin area, homeowners saw a 9 percent annual increase rate during the peak. By contrast, prices in Las Vegas peaked at 37 percent, in Phoenix at 38 percent and in Orlando at 33 percent.

More recently — in the 12 months that ended in March — home prices rose 7 percent in the Austin area, according to federal data. That increase came after four years of minimal changes locally, said Eldon Rude, a local housing expert who has been tracking the market for 27 years.

For the first five months of 2013, the median sales price for existing homes rose 10 percent — to $220,000 — over the same period in 2012, according to the Austin Board of Realtors.

Read more at the Austin American-Statesman.