Open Letter from Seth Koppel to Trulias Economist Jed Kolko who stated that Austin is the most overvalued real estate market in the country. Dear Jed, In regards to your recent post/article stating that Austin is the most overvalued real estate market in the country, I was hoping you could share some additional information on what exactly you mean by overvalued. I would assume it looks at current median incomes vs prices to determine affordability. It sounds like you also look at each particular citys normal range relative to other measures. Obviously I am biased as an Austin real estate broker, but I believe your analysis ignores other measures that I think should be considered fundamental to the health of a real estate market. For example, Job Growth and Expected Job Growth, and the Median Salary of the New Jobs Coming. Also, as you mentioned, some cities are almost always unaffordable, such as New York, San Francisco, etc. Well, how would your analysis pick up on a city that was a slow and quiet city for generations and is now becoming the hot new market and attracting companies and talent from around the world? (or for example, becoming a San Francisco Lite) Much like looking at a P/E ratio for a company with very high future expected earnings, it would look overvalued by an over-simplified analysis, yet continue to surprise to the upside every year as analysts say it is too expensive. As the opposite would hold for a market whose industry is dying may look undervalued by your analysis. My concern is that this leads buyers and sellers to make poor decisions. I appreciate your thoughts and would like to know more details in regards to the different inputs you used in your study. Thanks so much for your time, Seth
Posted on: Fri, 10 Oct 2014 00:48:50 +0000
Trending Topics
Recently Viewed Topics
© 2015