Quote:
Originally Posted by GoldenBoot
“Distorting?” I don’t know if I would go out on a limb and say that investors “distort ‘true’ housing demands.” If you really think about it, all home owners are investors in their property; even if it is their homestead. Nobody buys a home out of necessity.
...Also, there’s something that people seem to be forgetting here when discussing the number of proposed and under construction units in this market…the delivery times. Timing is everything, and most of the units in said projects will be delivered over a several year period, i.e., between mid-2007 and the end of 2010 (for the projects already on the table). That being the case, demand should still outweigh supply. On the other hand, I would agree that if every project was planned to deliver their units within the same 6-9 month period, I’d agree that there may be an over-supply situation.
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Sorry, Goldenboot, but I disagree. Distorting is EXACTLY what investors do to a market, particularly when there's a large number of them. And when I speak of investors, I'm not talking about homeowners who move into their units for the purpose of "living". But rather I'm referring to those who buy multiple units for the simple sake of raking in quick profits on resales. The local papers here in DC have been reporting on this for the past year as to how developers and local economists paid little attention to the affects that investors were having on the housing demand. And now that there's no profit left to be made, the investors have fled leaving behind empty overpriced condos in sparsely populated developments that few "true homeowners" can afford.
I don't know what's going to happen in Downtown Austin. I applaud all of the construction and am elated that FINALLY the city is pulling people into the core of the city to make it a 24/7 environment. But unless we start seeing more job creation in the downtown sector (i.e., several corporate headquarters into downtown), then what I expect to see is a sharp rise in demand followed by a sharp decline.
Regarding your comment about the timing of the projects, I totally agree with you there. But keep in mind that while everyone is timing the developments in downtown, there's rapid development of condos going up all over the city. It will be interesting to see how condo developments in places like The Domain, Mueller, that Airport Blvd. development, and all the other projects scattered throughout Austin will impact demand downtown, particularly as downtown because even less affordable than it currently is.
it will also be interesting to see what influence the proposed mortgage regulations will have.
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