Is Austin's housing boom creating a bubble?

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by KRIS BETTS / KVUE News and photojournalist DATHAN HULL

Bio | Email | Follow: @KrisB_KVUE

kvue.com

Posted on May 21, 2013 at 10:22 PM

Updated Wednesday, May 22 at 5:19 PM

AUSTIN -- There’s no question that right now Austin is a seller’s market. Even with buyers spending tens of thousands of dollars over the asking price, new numbers released Tuesday show Austin home sales are up 32 percent compared to this time last year.

Additionally, homes sales here are the highest they’ve been for nearly a decade, and prices are up eight percent.

This rapid growth has some wondering whether the boom will become a bubble.

Austin real estate is so hot, national housing site Trulia put it on “bubble watch,” calling it the “number two most overvalued market in the country.”

The force behind this trend is job growth and supply and demand.

“What it says is that the Austin market has a very tight inventory,” said Cathy Coneway with the Austin Board of Realtors.

Too many people moving and not enough homes means buyers are making offers far over the asking price and still getting outbid.

“We're seeing things go on the market, and we could get six to 10 offers on the first day,” said Coneway.

“I've been a realtor for 18 years. I've worked in two states, and I’ve never seen anything like this,” said Theresa Bastian of KeepAustinWeirdHomes.com.

Houses are selling so fast some realtors like Bastian are putting personal letters in other homes in neighborhoods to appeal to other sellers.

It’s a personal touch to get an edge in such a competitive market because Bastian says “just making an offer on a house is not going to get you the house."

“There's no time to look at the house and then talk to your mortgage lender. Those days are done. Whether you're selling or buying, you need to be ready to do it, because if you take the time to think about it, the house is likely gone," she said.

But is this boom pushing us toward a housing bubble? The Austin Board of Realtors says “no.”

“Jobs are what drive the housing market. As long as jobs are coming in, we'll have a hot housing market,” said Coneway.

Coneway also says Austin is avoiding the "housing bubble" because people move here to buy homes for their families, not as investment properties.

The Austin Board of Realtors expects the market to continue to grow for the next several years.

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