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<keyword id="24068881" type="General" weightage="100" keywordseo="Equity-investments-in-Indian-real-estate" source="keywords">Equity investments in Indian real estate</keyword> may rise 49% to $11 billion this calendar year amid strong demand for properties, according to CII and CBRE. In the 2023 calendar year, the equity investments in real estate stood at $7.4 billion. Industry body CII and real estate consultant CBRE on Wednesday released a joint report titled 'Leading the Charge: Crafting the Skylines of Tomorrow' at the annual CII Realty 2024 conclave. Equity capital inflows touched $8.9 billion between January and September, registering a 46% year-on-year growth. "Overall equity investments in 2024 in the real estate sector are set to hit a new record surpassing $10 billion for the first time," the report said. With a resurgence in investment inflows in built-up office assets and a strong acquisition pipeline for land in the residential sector, the overall equity investments in 2024 would be in the $10-11 billion range. During January-September, institutional and collective vehicle investors accounted for nearly 40% of the overall investments. Developer companies led the total capital inflows with more than 41% share in this period. Domestic investors (predominantly developers) invested nearly USD 6 billion during the first nine months of the calendar year, dominating the overall capital inflows with an almost 65% share. In comparison, foreign investors contributed about $3.1 billion during the same timeframe. Notably, North American and Singaporean investors were the significant contributors, representing about 85% of all foreign capital inflows. Anshuman Magazine, Chairman &amp; CEO, India, South-East Asia, Middle East &amp; Africa, CBRE, said, "Projection for 2024 equity investments between $10-11 billion, highest-ever, underscores continued investor interest in the growing <keyword id="23870227" type="General" weightage="20" keywordseo="real-estate-market-in-India" source="keywords">real estate market in India</keyword>." With SEBI's SM-REIT framework, he said, smaller but high-quality assets in Tier-II markets would also present new avenues for strategic capital deployment. "We believe this regulatory support will add much-needed transparency, enabling a more diversified investment base and encouraging institutional participation across these markets," Magazine said. Going ahead, he said this growing diversification will not only solidify India's real estate sector but also pave the way for future growth across emerging asset classes.

Equity investments in Indian real estate may rise 49% to record $11 billion this year, says CII-CBRE report

<ul class="summary-list"><li>More than $1 trillion worth of property lies in Hurricane Milton's path, Moody's estimated.</li><li>More than 235,000 commercial properties could be exposed to dangerous winds, per Mood's. </li></ul>Hurricane Milton <a target="_blank" class="" href="https://www.businessinsider.com/hurricane-milton-landfall-florida-housing-market-insurance-fema-2024-10">made landfall</a> in Florida on Wednesday as a Category 3 hurricane, and analysts estimate that $1.1 trillion worth of commercial property is set to be exposed to dangerous hurricane winds.According to an <a target="_blank" class="" href="https://www.moodys.com/web/en/us/about/insights/data-stories/hurricane-milton-tracker.html">estimate by Moody's Analytics</a> on Tuesday, more than 235,000 commercial real estate properties in Florida — worth $1.1 trillion —have a greater than 50% chance of being exposed to wind speeds of at least 50 miles per hour.This is the speed at which some property damage is likely, the Moody's report said.According to the report, the properties include 44,122 industrial spaces, 78,916 retail properties, 42,387 office buildings, 64,857 apartment buildings, and 5,056 hotels.According to an analysis note by Jefferies, Milton's estimated financial damage in Florida could reach $175 billion."While too early to make insured loss estimates, a major hurricane impact in one of Florida's most heavily populated regions could result in mid-double-digit billion dollar loss," Jefferies equity analysts said in a note."A 1-in-100 year event is estimated by some to result in $175bn in losses for landfall in the Tampa region, and $70bn in losses in the Ft Myers region," the note added.The monster storm <a target="_blank" href="https://www.businessinsider.com/hurricane-milton-timeline-see-storm-evolution-from-space-satellite-imagery-2024-10">morphed rapidly into a Category 5 hurricane</a> over two days. But it was downgraded to Category 3 when it made landfall in Florida's Sarasota County on Wednesday.The National Hurricane Center has warned that the storm could trigger flooding and storm surges as high as 15 feet along the coast.Milton comes just days after Hurricane Helene ravaged Florida and other southeastern states, leaving more than <a target="_blank" class="" href="https://apnews.com/article/hurricane-helene-death-toll-asheville-north-carolina-34d1226bb31f79dfb2ff6827e40587fc">200 people dead</a>.In a report on September 30, Moody's Analytics projected the damage from Helene to be between <a target="_blank" class="" href="https://www.businessinsider.com/analysts-estimate-up-to-34-billion-damage-from-hurricane-helene-2024-10">$20 billion and $34 billion.</a>

Hurricane Milton is headed right into $1.1 trillion worth of commercial real estate properties: Moody's

<ul class="summary-list"><li>Kerri Gibson quit her tech job in 2017 and started her real estate investment journey.</li><li>Alongside her partner Philippe, she now has six short-term rental properties.</li></ul>This as-told-to essay is based on a transcribed conversation with Kerri Gibson, 48, based in Orford, Quebec, about her short-term rental business, Chalets Hygge. The following has been edited for length and clarity.I'm a <a target="_blank" class="" href="https://www.businessinsider.com/accountant-shortage-sexy-taxes-business-school-pwc-kpmg-2024-8">CPA</a> by training and spent roughly two decades working primarily in tax and accounting technology.It was a high-paced, high-stress career, and in 2017, when I was on the brink of <a target="_blank" class="" href="https://www.businessinsider.com/burnout-work-boss-left-office-on-stretcher-2024-4">burnout</a>, I decided to resign.During my time off, my partner and I decided to buy a house in our neighborhood and flip it. We'd previously renovated our home and really enjoyed it, and we talked about doing it again.While renovating it, we found we had a knack for architecture and design. A friend advised me to keep the house because it was in an area zoned for <a target="_blank" class="" href="https://www.businessinsider.com/quit-job-real-estate-investing-house-hacking-heloc-2024-7">short-term rentals</a>.We started <a target="_blank" class="" href="https://www.businessinsider.com/renting-airbnb-not-passive-wont-do-it-again-2024-7">renting out the house on Airbnb</a>. We became passionate about buying and renovating properties and turned this investment into a full-time venture for both of us.As owners and operators of our short-term rental business, we put a lot of work into creating a good experience for our guests. Some people consider <a target="_blank" class="" href="https://www.businessinsider.com/beginner-friendly-real-estate-investing-strategy-buy-condos-rookie-investors-2024-9">getting into real estate</a> as a source of passive income, but I wouldn't say it's passive at all.<h2 id="1228fda7-fac2-493d-8d2b-254b9024e6a4">I transitioned into full-time real estate first. My partner joined me years later.</h2>We closed on our first <a target="_blank" class="" href="https://www.businessinsider.com/how-to-profit-from-short-term-rentals-during-airbnb-downturns-2024-7">short-term rental property</a> in December 2017. The price was 129,000 Canadian dollars. We used savings to make a 20% downpayment and secured the rest with a mortgage.We paid for renovations, which took 11 months, out of pocket, too. It was really torn up, so cost us around CA75,000. This included a contractor who taught me a lot about things like laying tile and grouting. My partner, Philippe, also helped on evenings and weekends when he wasn't working.I was so <a target="_blank" class="" href="https://www.businessinsider.com/quit-amazon-manager-burned-out-from-employees-2024-10">burned out</a> from my old job. I found working with my hands on the house very fulfilling.In June 2018, we bought a second house for <a target="_blank" class="" href="https://www.businessinsider.com/buy-short-term-rental-property-investing-strategy-markets-good-investment-2023-12">short-term rental opportunities</a> while renovating the first one. I was nervous, but Philippe convinced me, saying the price was good and it was low-risk because we could always resell it. It was in much better shape than the first one, so it was ready for renting in two months.It cost around CA188,000. We used savings to make a 20% down payment and mortgaged the rest. We did the renovations ourselves and paid for the furniture out of pocket.Philippe and I decided I'd pursue the <a target="_blank" class="" href="https://www.businessinsider.com/daniel-daggers-selling-london-super-prime-real-estate-netflix-2024-8">real estate</a> full-time, and we'd live off his income until he joined me.<div type="image" title="Gibson with her partner, Philippe." height="1126" width="772" msid="114251054" hostid="261" sizebytes="60124"></div>Philippe took a job in Vancouver, so we moved away in May 2018. We also turned the property we were living in into a short-term rental. By March 2019, we had three rental properties generating income, but we were investing all the money coming back into renovations.That March, we bought a third property for CA129,500 with a 20% downpayment and mortgage. It took nine months to renovate, and I worked with a contractor because it needed a lot of work.We moved back to Quebec in August 2019 and bought another condo in Montreal. We funded the downpayment through an equity release in the form of a mortgage on our personal home turned short-term rental.In October 2019, we bought another house. It was CA220,000 with a 20% downpayment, which we financed using income from the other rental properties and personal savings.Then, in July 2020, we purchased a neighboring property. However, because our bank had a limit on the number of short-term rental properties you could take out personal loans for, we <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/personal-loans/how-to-borrow-money">borrowed money</a> from family to pay the full price of CA277,000 for it.We paid them back after selling our condo in Montreal and still have mortgages on five out of six short-term rentals. We now live in another house we bought and renovated in Orford.<h2 id="7622e5ee-c1f1-429d-854b-e89e5af4b219">We've been trying to rely less on third-party booking platforms like Airbnb</h2>We lived on Philippe's salary until 2020. For the first couple of years renting out properties, we ran at a loss due to the cost of getting started and reinvesting money back into buying properties. Upfront expenses of investment properties are significant. But the time it takes to be cash flowing is shrinking now we have formula that helps us execute faster.I was able to build income and wealth for our future, while Philippe's salary more than covered our daily expenses. He left his job in the legal software space in February 2020, and his severance package covered our living expenses for a while.When the COVID-19 pandemic hit, it disrupted our business, and we had to flip all our properties into monthly rentals to comply with government regulations. After COVID, the market exploded because everyone wanted to get away.Guests loved us and were referring their friends, and we were featured in some <a target="_blank" href="https://www.tvanouvelles.ca/2020/08/19/reservez-deja-votre-chalet-pour-noel">media</a> <a target="_blank" href="https://www.ledevoir.com/plaisirs/voyage/584434/quoi-faire-au-quebec-chalets-branches-routes-et-cartes-postales-a-explorer">outlets</a>.At that point, I realized that if we could keep occupancy up, we could live off of our six properties.I focused on our direct booking strategy. Third-party online travel agencies like Airbnb and Expedia hold too many cards — they decide whether you're on page one or page 25 of their website and how to handle complaints. I worked hard to build our social media presence and website. I pay for a property management software called Lodgify, which allows me to see every reservation across the different OTAs and our website and what days are open on our calendar.In 2019, I'd say all of our bookings were coming from OTAs like Airbnb, but in 2023, my calculations suggest that out of the CA340,000 we made in revenue, roughly 70% came from direct bookings.<h2 id="f9c05698-69b4-496a-8745-68df540a817e">Having a hospitality business is a full-time job, not a 'passive' income stream.</h2><a target="_blank" class="" href="https://www.businessinsider.com/housing-market-ice-age-homebuyers-mortgage-rates-spring-real-estate-2024-10">Real estate</a> has historically been thought of as <a target="_blank" class="" href="https://www.businessinsider.com/how-to-make-rental-property-truly-passive-investment-2024-8">passive income</a>, running short-term rentals is not passive.Providing the necessary level of hospitality is more of a full-time job. We're owner-operators who put a lot of work into the guest experience.We're available seven days a week. I work 50 hours a week doing marketing, bookkeeping, and maintenance. We also have an operations manager who handles day-to-day cleaning and inventory. Depending on the season, there'll also be two to three part-time cleaners.We love what we do and find it so fulfilling, so the good far outweighs the stress.The <a target="_blank" class="" href="https://www.businessinsider.com/how-hospitality-industry-capitalizing-solo-female-travelers-2022-12">hospitality industry</a> is flexible, and I do think there are ways people can do this in addition to another job, but I worry about the quality of service provided.You hear horror stories about people arriving at properties that aren't clean or where things are broken, and it has a negative impact on the industry.Side-hustling with short-term rentals needs to be done in a way that honors the industry.Even those who say they work four hours a day from a beach on their real estate business will have had to put a lot of work into their support and team structure to be successful.Do you have a real estate story you want to share with Business Insider? Email <a target="_blank" href="mailto:ccheong@businessinsider.com">ccheong@businessinsider.com</a>

I have 6 short-term rental properties. People think real estate is passive income, but I disagree.

New Delhi [India], May 23 (ANI): Once notorious for oversupply and all-round market disarray, Delhi-NCR's real estate sector is witnessing a reversal of winds as the unsold inventory in the region has declined by a massive 57 per cent in the last five years, the latest report by real estate consultant Anarock Group observed. The report added the unsold real stock in the national capital region declined from approx. 2 lakh units at Q1 2018-end to approx. 86,420 units by Q1 2024-end. In the same period, the main southern cities saw their unsold stock decline from approx. 1.96 lakh units in Q1 2018 to over 1.76 lakh units in Q1 2024. Gurgaon holds the highest stock with approximately 33,326 units, marking a 37 per cent decrease. Greater Noida follows with about 18,668 units, having reduced its stock by 70 per cent. Ghaziabad's inventory declined dramatically by 70 per cent to around 11,011 units. Noida saw a 71 per cent decrease, with approximately 7,451 unsold units remaining. Combined, Delhi, Faridabad, and Bhiwadi have about 15,964 unsold units, a 31 per cent reduction since 2018, as per the report. It further observes the top Southern markets Bengaluru, Hyderabad, and Chennai saw their collective unsold stock shrink by 11 per cent in this period. MMR and Pune in the West saw their cumulative unsold stock reduced by 8 per cent. In the East, Kolkata saw its unsold inventory decline by an impressive 41 per cent in the period. Citing the reason behind the low decline of unsold inventory, the real estate consultant added that there have been massive new property launches in Hyderabad, most notably over the last two years. The city saw its housing stock almost quadrupled in the last 5 years. Bengaluru saw unsold inventory decline by 50 per cent in this period. In the West, MMR and Pune saw unsold stock decline by 8 per cent in the last five years - from approx. 3.13 lakh units in Q1 2018 to approx. 2.90 lakh units in Q1 2024, the report added.

Unsold real estate properties decline in Delhi-NCR by 57%; Rate slower in Bengaluru, Hyderabad, Chennai

The <keyword id="19903456" type="General" weightage="20" keywordseo="Income-Tax-department" source="keywords">Income Tax department</keyword> on Wednesday said 'substantial <keyword id="20138064" type="General" weightage="100" keywordseo="tax-savings" source="keywords">tax savings</keyword>' are expected for a vast majority of taxpayers due to reduction in the <keyword id="22526761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long term capital gains</keyword> <keyword id="45031" type="General" weightage="20" keywordseo="tax" source="Orion">tax</keyword> (LTCG) rate in the <keyword id="19895040" type="General" weightage="20" keywordseo="real-estate" source="keywords">real estate</keyword> sector. The Budget has reduced tax rates on capital gains earned from sale of house properties held for long term, but has removed the <keyword id="22142879" type="General" weightage="20" keywordseo="indexation-benefit" source="keywords">indexation benefit</keyword> available to taxpayers. The LTCG has been reduced from 20 per cent with indexation benefit to 12.5 per cent without indexation for the real estate sector. The indexation benefit allowed taxpayers to compute gains arising out of sale of <keyword id="801267" type="General" weightage="20" keywordseo="capital-assets" source="Orion">capital assets</keyword> after adjusting inflation. In a post on X, the income tax department said the nominal real estate returns are generally in the region of 12-16 per cent per annum, much higher than inflation. "The indexation for inflation is in the region of 4-5 per cent, depending on the period of holding. Therefore, substantial tax savings are expected to a vast majority of such taxpayers," it said. Giving a comparison of benefits based on the holding period of the real estate property, the I-T department said the new <keyword id="22422932" type="General" weightage="20" keywordseo="tax-rate" source="keywords">tax rate</keyword> without indexation is beneficial in most cases. For property held for five years, the new regime is beneficial when property has appreciated 1.7 times or more, while for a property held for 10 years, it is beneficial when the value has increased 2.4 times or more. For a property purchased in 2009-10, if value has increased to 4.9 times or more, it is beneficial, it said. "From the above examples, it is clear that only where returns are low (less than about 9-11 per cent per annum) that the earlier tax rate is beneficial, but such low returns in real estate are unrealistic and rare," the I-T department said. As per the changes brought in the 2024-25 Budget, the government has retained the indexation benefit for taxpayers on properties bought or inherited before 2001. The changes in the tax rate have been made effective from July 23, 2024.

Majority of taxpayers to have substantial tax savings due to reduction of long term capital gains on real estate: IT Dept

Acouple of years into the COVID-19 pandemic, a California state flag appeared on a front porch near my parents' home in suburban Austin. The whole thing felt a little too on the nose, as if one household was trying to sum up all of the city's recent changes — the tidal wave of coastal dwellers, the skyrocketing home values, the maddening traffic — with a single banner.The flag is gone now, and so is the gold rush. Home prices and asking rents in Austin are down significantly from a year ago. Local Zillow listings are littered with price cuts. Real-estate agents who once doubled as bouncers at crowded open houses are now hiring ice-cream trucks to lure prospective buyers into properties.The sudden shift in Austin's real-estate market can be read in two ways. Look at it through one lens, and it's a cautionary tale in which FOMO-filled buyers irrationally bid up home prices, setting the stage for an inevitable bust. Look at it another way, though, and it's a success story of a growing city: Real-estate developers saw all those millennials and out-of-towners clamoring for a piece of Austin and answered the call, building tens of thousands of new homes in just a few years. The construction boom, combined with spiking mortgage rates, kept prices from spiraling further out of control. In other words, Econ 101 happened.This isn't a bust in the traditional sense — pretty much anyone who owned a home in Austin before 2020 is substantially richer today than they were a few years ago. But as other pandemic Zoomtowns continue to see increases in prices and rents, Austin stands alone in its change of fortune. The reversal has meant short-term pain for homebuyers who bought near the peak, <a target="_blank" href="https://www.businessinsider.com/home-sellers-summer-disappointment-mortgage-rates-house-prices-real-estate-2024-5">disappointed sellers</a> who now expect smaller windfalls, and homebuilders who are eager to offload their inventory. But letting some air out of the bubble will turn out to be a great thing for Austin in the long run. The slowdown, experts told me, is a sign of a healthy market, an example of how cities can dodge a true housing crisis by allowing developers to do what they do best: build, build, build.Housing in Austin has been through so many extreme distortions that nobody really knows what "normal" even means anymore. Long before offices shuttered and remote workers started pining for more space, Austin residents were sounding the alarm on the city's rising costs. New construction practically ground to a halt after the financial crisis in 2008, but as the economy recovered, the city's population exploded. No <a target="_blank" href="https://www.businessinsider.com/2020-census-fastest-growing-and-shrinking-metro-areas-2021-8">major metropolitan area in the US grew faster</a> between 2010 and 2020 than Austin, where the number of residents surged by 33% over the decade. Real-estate developers ramped up construction to meet the demand, but they couldn't get enough shovels in the ground to keep prices in check. The median cost of a house in the Austin metro area grew by 63% during that time, Zillow found, reaching $323,000 at the cusp of the COVID-19 crisis.Then the real boom began. To well-paid workers unmoored from their desks during the pandemic, Austin <a target="_blank" href="https://www.businessinsider.com/moved-from-san-francisco-to-texas-for-work-life-balance-2023-8">looked like paradise</a>: lower taxes, cheaper homes, and a thriving business ecosystem. Big-name tech firms like Oracle, Facebook, and Google endorsed the city, as did "<a target="_blank" href="https://www.businessinsider.com/manosphere-widening-ideological-gap-between-young-men-women-gender-genz-2024-2">manosphere</a>" figureheads such as <a target="_blank" href="https://www.businessinsider.com/elon-musk-austin-joe-rogan-biggest-boom-town-50-years-2021-2">Elon Musk</a> and <a target="_blank" href="https://www.businessinsider.com/celebrities-moved-to-texas-from-california-new-york-reasons-why-2024-8">Joe Rogan</a>, who urged others to follow in their footsteps. Austin was once again the <a target="_blank" href="https://www.austinchamber.com/blog/05-09-2023-migration">fastest-growing large metro</a> from 2020 to 2022, according to the Census Bureau, surging in population by 5.3%, or more than 120,000 people.As people flocked to the city, home prices exploded. I don't need to tell you that Austin got really expensive really fast, but the raw numbers are still stunning: The typical home price rose by nearly 56% in just a couple of years, Zillow found, surpassing $500,000 by the start of 2023. Homebuyers <a target="_blank" href="https://www.businessinsider.com/moving-to-austin-buy-a-home-texas-tech-jobs-2023-10">got swept up in bidding wars</a>, reasoning that even if the price ended up being steep, it would only climb higher if they waited. Things got so crazy that one large-scale builder started accepting bids for homes on its website, sight unseen. "That never happens," Keith Hughes, an Austin-based executive at the housing-research firm Zonda, told me. "It was that kind of frothy."I'd already moved out of Texas by that point, but I worried from afar that my hometown would meet the same fate as San Francisco, the poster child of the <a target="_blank" href="https://www.businessinsider.com/economic-inequality-housing-shortage-causes-2023-1">housing shortage and all its associated woes</a>. I feared that Austin would become known as a playground for the rich, a city where displacement and mind-boggling home prices marred the natural beauty that once made it such a draw. In my hand-wringing, though, I'd overlooked one crucial detail: Texas is better at building homes than almost anywhere else in the country.Austin-area builders immediately raced to meet the new demand, securing permits for about <a target="_blank" href="https://fred.stlouisfed.org/series/AUST448BP1FH">2,600 new single-family homes</a> in April 2021 alone, a 45% jump from the same month in 2019. All told, plans for more than 130,000 new housing units of all kinds were approved from 2020 through 2022. Once the paperwork goes through, it can take anywhere from a few months to a couple of years for homes to hit the market, so for a while, it didn't feel like any relief was on the way. That couldn't have been further from the truth.Consider the following trend: In the spring of 2022, more than 3,000 new listings were hitting the market each month, <a target="_blank" href="https://www.parcllabs.com/">Parcl Labs</a>, a real-estate-analytics company, found. By the following spring, the figure had surpassed 5,000. All told, Austin's housing stock has ballooned by more than 76,000 units since 2020, an 8.34% increase that includes single-family homes, condos, and townhomes. That's to say nothing of the <a target="_blank" href="https://www.businessinsider.com/rent-decline-fall-apartment-housing-market-landlords-tenant-lease-construction-2023-3">roughly 40,000 new rental apartments</a> that also opened their doors during that time. Now compare Austin's building blitz with San Francisco, which has added a measly 14,000 homes over the same period and grew its housing stock by less than 1%."It's pretty amazing when you think about it," Jason Lewris, a cofounder of Parcl Labs, told me. Considering the size of the Austin market, moving the stock of homes by nearly 10% is a colossal feat. "These are huge housing markets," Lewris added. "Austin wasn't small in 2019."Thousands of new homes weren't the only things pumping the brakes on Austin's runaway market. Mortgage rates reached record lows during the thick of the pandemic in 2021, making it easy for homebuyers to stretch their budgets by borrowing a lot of money for cheap. Then in spring 2022, the Federal Reserve started hiking interest rates to bring down inflation, and mortgage rates leaped. In October 2023, the rate for a typical home loan hit a 20-year high, making the prospect of <a target="_blank" href="https://www.businessinsider.com/housing-market-mistake-buyers-sellers-mortgage-rates-time-to-buy-2024-3">buying</a> — <a target="_blank" href="https://www.businessinsider.com/denmark-mortgage-rates-lock-in-effect-home-buying-selling-easier-2024-5">or selling, for that matter</a> — a lot less appealing. More expensive loans forced buyers to consider the possibility of paying several hundred dollars more each month for the same home, and many decided to play the waiting game instead. The result is homes are sitting on the market longer. These days, "there's no sense of urgency," Doreen Sidney, a local real-estate agent, told me. "There's no rush. The home that you saw two weeks ago, it'll still be there."The job market cooled as companies pulled back on hiring or laid off workers in the face of higher borrowing rates. Migration to Austin also slowed considerably. Between July 2022 and July 2023, more people moved out of the city's main county than moved in for the first time in two decades. Some departed for the suburbs or cheaper Texas locales like San Antonio — 20% of new San Antonians in 2022 had <a target="_blank" href="https://www.bizjournals.com/austin/news/2023/09/14/austin-sanantonio-migration-data-2023.html">moved from Austin</a>. Others, including some tech workers from places such as California, decided Austin wasn't all it was cracked up to be and moved on. "Austin is where ambition goes to die," one disappointed founder and angel investor <a target="_blank" href="https://www.businessinsider.com/tech-workers-moved-to-austin-regrets-2023-8">told Business Insider</a> last year.There was no shortage of ambition among Austin's homebuilders, however. Their efforts may have been focused on chasing all the profit that comes with a crush of demand, but they ended up doing what hopeful buyers had been praying for — bringing down home prices. The typical home price in Austin was down almost 4% in July compared with the same month in 2023, according to the Freddie Mac House Price Index, while prices across the US were up more than 4%. On the one hand, a single-digit drop like Austin's "is not a huge number," Sean Kelly-Rand, a Boston lender who works with home developers, told me, adding: "On the other hand, that's massive." Overall, Austin home prices are down more than 14% from the peak in 2022, according to Freddie Mac, and more than 18% according to Zillow.Homeowners and -builders don't like to see price drops — they want to watch their wealth balloon and reap the rewards of a market that's running red hot. But just like a collapse in prices is bad news for everyone, an unsustainable run-up in home values is also unhealthy. Companies don't want to move to a place where workers can't afford to live. Wannabe sellers might choose to stay in homes they've outgrown if they can't find anything else within their budget. Add up <a target="_blank" href="https://www.businessinsider.com/san-francisco-doom-loop-fix-american-city-housing-transit-2023-7">all these problems and you get San Francisco</a>. A crash in home prices would've also been bad news for Austin, sure, but that's not what's going on here. The vast majority of homeowners in Austin are still wealthier than they were before all this craziness, and local homebuilders made plenty of hay while the sun was shining. For that reason, Austin's slowdown isn't a doom signal — it's a dazzling success."It's nice to see the positive developments in Austin," Orphe Divounguy, a senior economist at Zillow, told me. "Austin should be a model for the rest of the country in terms of allowing builders to meet demand."Austin's long-standing advantages were on full display during the building boom: Sun Belt cities in the lower half of the US have traditionally been more permissive of growth, which enabled developers to mobilize when they saw the first signs of Austin's unprecedented spike in home values. And most of the new construction was concentrated in the suburbs, where there was plenty of space to build outward. Not all cities have the luxury of ample space, but they do have the power to cut red tape and make it easier to build more types of housing. When developers can get projects approved more quickly, they're more responsive to buyer demand, which prevents prices from getting out of hand. Relaxing the zoning laws, which tell builders what they can and can't build, allows developers to get creative and add multiple housing units to lots that might have traditionally allowed only single-family homes.Nobody watching the Austin market should be having flashbacks to the Great Recession. The market's cooling is less a disturbing sign of cratering demand and more a hopeful hint that the city can adapt to people's desire to call it home."I think Austin is going to be fine in the medium to long run," Jenny Schuetz, a housing-policy expert at the Brookings Institution, told me. "The fundamentals of Austin's economy are great, and it's going to continue to grow with jobs and population over time." In fact, easing the housing crunch will probably add to Austin's allure, which has always been at least partly predicated on being cheaper than the big cities on the coasts. The next challenge will be to avoid forfeiting this success — homebuilding is prone to cycles of booms and busts, and developers are already pulling back on new construction as they try to get their already-built units off their books. Home prices in Austin may be down year over year today, but it's not like there's a glut of empty homes like there was around the country in 2008. If building in Austin dries up, prices may very well resume their rise.Kelly-Rand, the Boston lender, thought about making inroads in Austin a few years ago when the building renaissance was in full swing. But ultimately, he decided not to — buyers' behavior was too frenzied for his taste, and prices seemed likely to come down when all those homes on the horizon actually got built. Nevertheless, Kelly-Rand told me he's still a believer in the Texas capital."Long term, I think Austin will be in an even better position," Kelly-Rand told me. "I think the right thing is happening in that developers are meeting demand."<a target="_blank" rel="" href="https://www.businessinsider.com/author/james-rodriguez">James Rodriguez</a> is a senior reporter on Business Insider's Discourse team.

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