How The Austin Real Estate Market Got So Hot

Many have reached out to us over the past few weeks with questions about the current state of the real estate market.  Having been blessed to serve well over 1,000 families over the past 15 years, even we have seen nothing like what we are experiencing right now.  

Across the five-county MSA, home sales dollar volume jumped 15.9% to $1,207,218,785, while pending sales fell 15.5% to 2,573 in February. At the same time, new listings decreased 24.8% to 2,565, and active listings dropped 74.1% to 1,310 listings. Homes spent an average of 31 days on market, 32 fewer days than in February 2020.

There was an article in the NY Times recently that was very well written and that points out that the market is a product of the pandemic AND the years leading up to it.  What is happening is caused not only by historically low interest rates and a desire for more space during the pandemic but by other factors as well. 

1. People don't want a lot of strangers inside their homes during the pandemic.

2. Older adults are not transitioning into assisted living or nursing homes due to potential safety issues.

3. Move-up buyers are hesitant to commit to a "forever home" when it's unclear what remote work will look like in the future, and this isn't freeing up their starter home.

4. With such low inventory, would-be sellers get nervous about being able to find a home and decide not to sell.

5. Homes that typically come on the market, either through a foreclosure or forced sale, did not because of government forbearance laws.

6. New home builders haven't built enough homes to keep up with the demand over the past 10 years.  After the housing crash, many construction workers moved to other industries.

7. Recent immigration policies restricted labor supply in the construction industry, and government tariffs pushed up the price of building supplies.

8. Homeowners have kept their starter homes as investment properties thanks to low interest rates instead of selling them.

9. Airbnb and other companies have allowed owners to make revenue off investment properties.

10. Austin has a healthy local economy, has experienced exponential growth over the past decade, and continues to be a top destination for those seeking to relocate.

We have multiple stories of clients we met with last year to begin the process of preparing their home for sale that have seen their recommended list price increase anywhere from 50K to $250K in a matter of months.  Having a home to sell right now is like scratching off a winning lottery ticket and the prize has been averaging what’s the equivalent of 2 to 5 years of an average year’s salary.  if you are considering selling your home or know someone that is, have them reach out to us directly so that we can share some of our proactive approaches and strategies we are taking to ensure our clients have a winning plan that they can execute on to take advantage of this amazing selling window, while also having a winning plan for what happens after you sell.  We look forward to giving you the advice that you need to make a well-informed decision.