38 11.14.21
you see lines of 20 people waiting
to see a house.’’
The last time U.S. housing saw
such rampant price growth was
in 2005, and the market correct-
ed itself, infamously, in 2008.
But the underlying reality today
is different. Back then, a gey-
ser of subprime adjustable-rate
mortgages sputtered out as bor-
rowers defaulted. (According to
Bloomberg News, 60 percent of
mortgages during the bubble
years were adjustable rate; fewer
than 0.1 percent of mortgages are
now.) The current boom is better
compared to a river, one fed by
streams that have long been visible
on the horizon: high demand, low
supply and a dysfunctional econ-
omy in which wages are stagnant
while restrictive zoning and poor
public policy have turned housing
into an artifi cially scarce commod-
ity. Historically low 30-year fi xed
mortgage interest rates, hovering
between 2.68 and 3.08 for the last
year, are narrowing the riverbed,
quickening the current.
After a decade of too little devel-
opment, the pandemic made the
low inventory lower. Construction
stopped. Sellers, afraid of inviting
the virus into their homes or reluc-
tant to move in uncertain times,
didn’t list, and inventory declined
by nearly a third from February 2020
to February 2021, falling to the low-
est level relative to demand since
the National Association of Realtors
began record-keeping almost 40
years ago. At one point in January
2021, the month the Ephraim Road
sale broke everyone’s brains, Austin
had just 311 homes listed for sale; in
a normal month, the number would
be 5,000. An estimated 65,000 start-
er homes were completed nation-
wide in 2020, less than a fi fth of the
number built annually in the late
1970s and early 1980s. A typical
home listed for sale on Zillow was
available for a median of 14 days in
December 2020, compared with 33
days the year before. Now it’s nine.
14
bidsListing price
$449,000Sold
$441,000Offers
$435,000 and $475,000An East Austin home under renovation by Douglass and her family.(^5) West Stassney Lane, South Austin
As the pandemic made the poor
poorer, meanwhile, it made the rich
richer. Homeowners, already more
than 40 times as wealthy as renters,
were more likely to keep their jobs,
profi t from the stock market and
have enough savings to take advan-
tage of low interest rates.
Then there’s the role played
by investors and speculators.
Large corporate and Wall Street
landlords, like Invitation Homes,
American Homes 4 Rent, Black-
Rock and Blackstone, are arguably
the most toxic players, driving up
rents in the select markets they
saturate, lobbying for corpo-
rate tax cuts and fi ghting tenant