While Austin is still well below the national median sales price of $231,100, the sale of homes nationwide has dropped 5% while Austin's housing market continues to climb. The same article states that Austin home sales in the $900k to $1 million range were up an astonishing 70% and the sale of homes priced in excess of $1 million saw a jaw-dropping 60% increase.
The article also alludes to the influx of buyers from pricey markets out-of-state. The people driving around town with California tags still on their cars sure do have a guilty look on their faces, but who can blame them? Young families have been scattered to the four winds in search of more affordable housing, unfortunately, affordable for a Californian is quite pricey for the rest of us.
It doesn't take a genius to know that real estate has been a solid, stable and lucrative investment over the past few years as the stock market has fluctuated enough to make even the most patient investor woozy, but the dark side of this shiny coin comes from a story I caught the tail end of on ABC news.
The source of the story was data released by a realtytrac.com. Here's an excerpt from their press release:
RealtyTrac, the leading online marketplace for foreclosure properties, today released its August 2006 U.S. Foreclosure Market Report, which shows 115,292 properties nationwide entered some stage of foreclosure during the month, a 24 percent increase from the previous month and an increase of nearly 53 percent from August 2005. The report also shows a national foreclosure rate of one new foreclosure filing for every 1,003 U.S. households, the second highest monthly foreclosure rate reported year to date.For the rest of the data, you can check out the entire press release here.
So, I know that there are a lot of factors at work here, but this is just the set-up for my rant:
Greed has blinded us to risk. Banks have loaned money to people they shouldn't have. Ordinary people have leveraged all their assets to buy and flip houses just to have a taste of "the good life," thereby creating a bloated and unrealistic picture of the value of the American home, you know, the place where people actually live, raise families and create memories.
The people who didn't jump on the real estate bandwagon live miles and miles outside of town in cookie-cutter developments where their good incomes are no match for the rate of appreciation closer to town. Forced to sit in bumper-to-bumper traffic feeding into the places where they work from hither and yon, the unfortunates know that the price paid for a decently-sized house with a little bit of lawn is dear indeed and far greater than the sale price. Their communities have all begun to look alike. There's a Starbucks here and a McDonalds there. There's a Home Depot there and a Wal Mart here. These folks are the poster childs for the squeezing of the middle class. They've been squeezed right out of town.
As for those foreclusure rates, are they a harbinger of a return to normalcy, or are we too far gone? Don't get me wrong. America was built on brave, innovative and/or desperate people taking risks, but too many people taking the same risks reminds me of Deadwood. While some strike it rich, others go back to picking apples in Washington State... or even worse, end up cooling in the creek.