📈Prices Are Up 5-10% In Austin!💰

 

You might be shocked to hear real estate prices in our area are up 5-10% since the beginning of December. Almost everyone who is calling me right now thinks their home is worth $50,000-$100,000 LESS than what it would sell for today. Today, someone asked me what has caused prices to go up. There are many factors and I thought I would share what I told her with you.

  1. Record low inventory of homes for sale. Many potential sellers decided to hold off on selling last year. We have a dramatic inventory shortage of homes for sale.
  2. Few new homes available. In many neighborhoods you couldn’t buy a new home if you wanted to build. They are completely sold out of lots.
  3. Tesla, Oracle and Apple building coming to life. The surge of buyers coincided with the announcements of Tesla building their plant, Oracle moving to Austin and the Apple building on Parmer coming to life.
  4. Local buyers not pausing in December. Although our market isn’t as seasonal as you might expect we often see buyers taking a pause in December and then jumping back in the market in late January. We never saw a pause in buyer activity in December.
  5. Out of area buyers. Take a look at the phone calls I received one afternoon in December. Call after call after call from out of area buyers.
  6. Historically low interest rates. Mortgage rates look like auto loan rates for the first time in my career. Buyers have more buying power which allows them to increase their budget and pay a higher price for a house.
  7. Investors. My phone is ringing off the hook from investors looking to buy…many paying cash.
  8. Buyers with $300, $400, $500k household incomes. In my opinion this is the game changer for our market. These buyers have the extra income and money in the bank to pay over appraised value for homes which has contributed to prices appreciating so rapidly.

What Do I Think Will Happen?

We won’t see this type of appreciation forever. As sellers see the prices when the current homes we have under contract are reported they will become more motivated. Just in the last 24 hours I have made appointments with 3 sellers who called me. We have at least 10 sellers we who are ready to go on the market once they get their vaccine. What that means is I know additional inventory is coming for the resale market. In addition, eventually the builders will release more lots.

We may see the market cool off a little as more supply hits the market. None of this means the market is going to crash. In the words of Ted Jones, an economist who tracks the Austin real estate market, “I’m not worried about a price bubble in Austin.”

I’m not worried either, but what all this does mean is the market is hotter than I have ever seen it and it’s a great time to take advantage of this opportunity.

What About Buyers?

Buyers have to realize you’re not going to be able to buy a home at a November price. The market is different and it will cost more to buy the same home you could have bought last year. If you’re buying a home, you’ll need to be careful but also understand any offer you make will need to be more aggressive. It will be important for you to have great representation to help you make the best decision for yourself.

Not sure what to do? Let’s talk about it. If you are thinking about buying or selling, contact me directly at 512-791-7473  and we will come up with the best strategy for you.

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