The latest "Bubble Watch" report from real estate website Trulia reveals homes are increasingly overvalued in the Austin market. In fact, according to Trulia's data released earlier this month, homes in the Austin metro area are the most overvalued in the country.
Austin home prices were overvalued by 19 percent in 2014 Q3, reports Trulia. That's a sharp increase from the previous report, which stated that local home prices were overvalued by 13 percent in Q2.
Austin currently tops the list of metro areas where home prices are most overvalued, jumping to the the No.1 sport from the No. 5 in Q2.
California metro areas dominate Trulia's latest report, but the two Texas cities in the top 10, Austin and Houston (No. 8) "are the only metros out of the 100 largest that look more overvalued today than in 2006," notes Trulia. That's because "Texas markets avoided the worst of the housing bubble during the past decade. Recently, they’ve had double-digit home-price increases," the site explains.
Although certain areas like Austin and Riverside-San Bernardino, California have witnessed "big price jumps" in recent months, overvalued markets in general have not seen larger price increases. So, Trulia concludes that "bubbles should not be our top housing worry today." Instead, the site points to "weak construction" and "subpar young-adult employment" as red flags.