How California Exported Its Worst Problem to Texas

On an otherwise sleepy Saturday morning, cars were parked bumper to bumper along a suburban street. Couples formed a line around the block, nervously sipping coffee and double-checking paperwork. They were there to see a charming but decidedly modest house—early-’90s suburban, vinyl shutters, holly bushes—that had just come on the market. Twenty-four hours later, the home had sold for 20 percent above the asking price and $100,000 more than it had sold for in 2006 at the height of a so-called housing bubble.

That’s a story we’re used to hearing about the frenzied housing markets of coastal suburbs such as Orange County and Long Island. But this house wasn’t far from where I grew up in Lexington, Kentucky—a midsize city where local boosters are given to about affordability. It’s a scene that’s playing out in more and more cities across the country, especially in regions once accustomed to