Austin, San Antonio tie for No. 1 most overvalued housing market

DECEMBER 19, 2013 - A for sale sign hangs in the front yard of a home in the 1900 block of Eve Street in Austin, Texas, on Thursday, December, 19, 2013. (RODOLFO GONZALEZ / AMERICAN-STATESMAN)

DECEMBER 19, 2013 – A for sale sign hangs in the front yard of a home in the 1900 block of Eve Street in Austin, Texas, on Thursday, December, 19, 2013. (RODOLFO GONZALEZ / AMERICAN-STATESMAN)

Is your house really worth what you’re paying for it?

According to a new Forbes list, if you’re living in Austin or San Antonio, it definitely isn’t. The site compiled a list of the most overvalued and undervalued housing markets in the United States, and the neighboring Central Texas cities tied for the No. 1 spot.

Homes in both Austin and San Antonio are overvalued by 19 percent, the most of any housing market in the country, Forbes reports. To give you a little perspective, homes in San Francisco, a city notorious for its unreasonable housing prices, are overvalued by 14 percent.

What causes an overvalued housing market? Essentially, Austin’s housing prices grew a little faster than the local economy. While gross metro product grew 18 percent in Austin from 2011-2014, house appreciation overshot the growth and rose 41 percent, leaving the current median price at $278,000.

While an overvalued housing market isn’t necessarily good news, it does indicate something positive about the cities in which it’s located: growth — particularly in the job market.

“I think the underlying factors are, once again, the good jobs and where those companies are going to set up shop. People will follow that,” analyst Marc Gilbert told Forbes. Texas has rapidly been “gaining manufacturing and tech jobs as companies have sought lower-cost places to do business,” and Austin and San Antonio, which continue to add “jobs and population” are proof of that.

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