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Texas never had the big housing price run-up of the East and West Coasts. Even the biggest bubble believers have generally acknowledged that Texas was considerably less frothy than, say, Miami or Las Vegas. So it came as a surprise to me on Friday to see one respected market observer listing San Antonio and Austin among overvalued housing markets.
The analysis comes from John Burns Real Estate Consulting Inc. of Irvine, Calif. In a news release Apr. 19, the company said that according to its Market Risk Matrix, “several of the major housing markets in the country are at risk of being both oversupplied and overpriced. They are New York, Seattle, Orlando, San Antonio, Chicago and Austin.”
Overconstruction seems to be the big issue for both cities. In San Antonio, permit issuance over the past year has run at 75% of its record, which doesn’t sound like much except that the records in Texas are unusually high. In Austin, permits have been running at over 96% of the record.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.