re: Austin & Houston Ranked Most Overvalued Housing Markets in U.S.

quote:

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Take the case of Texas. Unlike most of the country, the Lone Star State did not experience a dramatic drop in housing prices during the economic downturn and housing crash. The state’s unemployment rate was lower, its economic growth stronger, and as the rest of the nation was still stuck in the doldrums, Texas began to grow. Texas did not experience a flood of investors snapping up distressed properties and pushing up prices–there weren’t super-undervalued properties available to buy. Its price escalation has come largely from the demand that accompanies a strong economy. It’s just been a bit faster than underlying fundamentals.

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Bubbles are typically created by artificially manipulating supply and demand. That's not what is happening in Texas. It's more natural, so it is less likely to be a bubble situation than other areas.

it's also odd that the determination of under/overvalued homes was limited to just looking at economic growth to price growth over that span. Without looking at some sort of economy:housing price ratio, how can they be sure that 3 year period wasn't an adjustment to the normal for those cities? Housing was pretty damn cheap in Houston back in 2010-2011.