alt Hacker NewsI would expect the development of Austin to continue until market equilibrium and then pause. Decreasing margin does not mean equilibrium. Obviously austin is not at equilibrium because we still have price data on developer activity and that would be near zero if developers couldn’t make returns given risk etc.
I guess I don’t see where we disagree?
I mean... that is pretty much what we're seeing:
Austin new housing starts (approx per month):
2019: 1416
2020: 1504
2021: 1495
2022: 2083
2023: 1415
2024: 916
2025: 900
2026: 481
The problem here is that the market obviously does not have perfect information, limited mechanisms to coordinate, and significant lead time. It seems pretty much baked in at this point that many of the projects currently underway will complete into a negative market and (assuming Austin remains somewhat desirable) a whole lot of developers will be wiped out. This will stop development until prices rise again, probably back to a level where housing is quite expensive again relative to local wages.