How much homebuyers in Austin are overpaying

The pandemic inflated metro Austin housing prices by nearly 68% above the historic trend line, making the local market the most overpriced it's been in at least three decades, a new analysis finds.

The big picture: Now hovering over the Austin housing market is the dreaded B-word.

• As in, bubble.

Driving the news: The average sales price in the greater metro was $594,000 at the end of April — far above the $354,000 that historic trends would forecast it to be.

Yes, but: Shouldn't we toss history-based trends in the trash, given the profound disruption wrought by the pandemic and the technological novelty of remote work, which have pushed workers from both coasts to pour into Central Texas?

• Chances are if you managed to land a home in Austin in the last two years, you're relieved, historic trends be damned.

What they're saying: Maybe there has been a paradigm shift, Ken Johnson, report co-author and a Florida Atlantic University professor specializing in real estate economics, told Axios. But "it's very likely also that you've overshot the goal in Austin."

• The inelastic nature of housing supply is to blame, he said: "You can't change supply in very short periods of time. All these people are rushing in and Austin can't build fast enough."

By the numbers: The average share of monthly income going to principal and interest for a typical loan on an average-price home in greater Austin is now 42%.

• "That can't be sustained," Johnson said. "It should be more like 28%."

• He pointed out that high housing costs mean giving up other things — family outings, private schools, buying a car.

The crystal ball: "Will Austin have a housing crash? The answer is probably not," Johnson told Axios.

• But someday, "prices in Austin, Texas will be below that trend line."

The bottom line: "People buying houses right now are greatly exposed."

• "If we're not at the peak of the current housing cycle, we're awfully close," he said. "Recent buyers in many of these cities may have to endure stagnant or falling home values while the market settles — and that's not what they want to hear if they had planned to resell anytime soon."