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Of all the data points that illustrate how hot the Austin area’s housing market is right now, this one is possibly the most telling – and impressive.
From January 1 to May 23, more than 1,500 homes in the Austin area were sold for at least $ 100,000 above their asking price, according to a new report from online real estate company Redfin.
In the same period in 2020, only 22 households reached this threshold.
“The staggering increase in the number of homes sold, hundreds of thousands of dollars above list prices, is symbolic of the hot Austin housing market, which saw the highest price increase in the country in April,” said Redfin.
More:Austin businessman Nate Paul loses 9 properties through foreclosures
Redfins numbers show that from Jan 1st to May 23rd:
• 72 homes in the Austin area sold for $ 300,000 or more above asking price, compared with just two homes in the same period last year.
• 1,440 homes in the Austin area sold for $ 100,000 to $ 299,999 above asking price, compared with just 20 in the same period in 2020.
• In April, nearly 74% of homes sold above asking price, with the typical home selling for $ 35,000 above asking price.
Redfin’s report covers the Austin area, which stretches from Georgetown to San Marcos and includes counties of Travis, Hays, Williamson, Bastrop, and Caldwell
More:As Austin property prices skyrocket, real estate experts fear no bubble
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As remarkable as these numbers seem, they may not come as a total shock to people trying to buy or sell a home in central Texas.
Prices in the five-district area have been rising – often sharply – for at least a decade amid strong demand due to the region’s population and employment growth and a tight supply of housing, local market experts say.
Part of that demand comes from the influx of wealthy buyers willing and able to pay the high prices in Austin’s coveted central neighborhoods, which drives prices up even further, experts say.
Affordability remains a concern of city guides and a number of longtime Austinites who worry about being excluded from the market if they haven’t already moved out.
“A big reason Austin has seen so much house price growth is because it’s one of the country’s most popular migration destinations,” said Daryl Fairweather, Redfin Chief Economist. “Almost 40% of the people looking for homes in Austin in April came from outside the subway area. A combination of low mortgage rates and remote work motivates people in expensive coastal cities to look for destinations like Austin that are more affordable and warmer, while still offering the urban amenities that are expected in their neighborhood. ”
Fairweather said Austin home prices were up 42% year over year, “well outperforming income growth for longtime residents.”
And unfortunately, prices seem likely to escalate further for some potential buyers struggling to navigate the fast-paced, highly competitive marketplace.
“While it can’t take forever and there are signs that things may calm down, I expect house prices in Austin will continue to rise every year for the foreseeable future,” said Fairweather. “Probably not at the pace they were at, but they won’t let up any time soon.”
Leading growth nation
The Austin housing market is an example of how the coronavirus pandemic has sparked heavy demand for housing that has impacted prices and competition, Redfin said.
“In part because of the sheer number of homes so far sold above asking price, Austin had the highest price growth in the country in April,” the Redfins report said. However, it found that year-over-year price growth is a little exaggerated as pandemic lockdowns slowed home buying and selling in April 2020.
Redfin said just over 4,500 homes on the subway sold between $ 25,000 and $ 99,999 above asking price, up from about 350 homes last year.
Margin is lower on homes sold for less than $ 25,000 above asking price, with 2,810 Austin homes sold above that threshold so far this year, up from 2,748 last year, Redfin said.
Redfin ‘s numbers are based on data from the Austin Area Multiple Listing Service, the Austin Board of Realtors’ database of homes for sale across the area.
The board’s most recent monthly report said central Texas home sales rose 37.2% in April from the previous April.
Half of the homes sold for more than $ 460,000 and half for less in April – the highest average price ever recorded for the Austin area, the board said.
More:Just outside Austin, Kyle is transforming from a small town into a boom town
Within the Austin city limits, sales have increased 51.4% since April 2020. The low supply of housing caused the average house price in the city to rise 31.7% from April 2020 to $ 550,562, the Austin Board of Realtors said.
John Dawson, a Redfin agent in Austin, said he recently listed a client’s home for $ 565,000 – and sold it for $ 715,000.
“We received about a dozen offers, which is actually a small number by today’s standards,” said Dawson. “The winner also waived estimate and funding quotas and gave out cupcakes that matched the interior colors of the house, which was a nice touch because the seller is an artist and the house is unique and colorful.”
Find balance again?
Fairweather, the Redfin economist, said she expected mortgage rates to rise a bit this year as they tend to rise as the economy improves.
“This could change the affordability calculation of property or rent for some people, which would help reduce some of the demand in the sales market,” Fairweather said. “It’s not going to stop house prices, but it will hopefully bring some competition relief to buyers.”
Another expert, Austin-based real estate advisor Charles Heimsath, said the shortage of land, labor and materials combined with “excessive regulation” made it difficult to deliver new housing “affordable and on time”.
Although home builders built a record number of new homes in the area last year, supply is still lagging behind demand, said Heimsath, who has followed the market in central Texas for several decades.
“This in turn pushes buyers to buy the existing inventory, which then drives up the price of the existing homes,” Heimsath said.
Heimsath said Monday, however, that a number of factors could help bring the local housing market back into balance between supply and demand.
“As the economy improves and the threat of COVID-19 subsides, more people will consider putting their homes up for sale,” Heimsath said. “But that alone will not solve the supply problem.
“The beauty of a relatively unconstrained economy is that strong demand ultimately leads to an increase in supply,” said Heimsath. “As our building materials supply chain increases capacity, material shortages will decrease, new house deliveries will increase, and eventually (maybe next year) we will regain balance.”
“Double happiness”
Elizabeth St. John, who lives in central Texas, has the perspective of being both a buyer and a seller in the current market.
St. John – who works in high-tech for Cisco Systems and is also a career coach and meditation teacher – said she decided in December to list her 2,300-square-foot home in Southwest Austin’s Circle C neighborhood where she lived for 10 Years for $ 449,000.
When she and her real estate agent launched it in January, they had raised the asking price to $ 499,000 – an increase of $ 50,000 in just one month.
After more than 30 bids, the house eventually sold to an Austin couple for about $ 720,000, St. John said – about $ 220,000 above list price.
St. John moved to a property in Dripping Springs in November. Located on a hill near Camp Lucy, their small renovated farmhouse is 5 acres, surrounded by nature including live oak and cypress trees, a fox family, a peach garden and expansive meadow views.
St. John said she paid the $ 700,000 for the single-story property in Dripping Springs, which is approximately 1,100 square feet with two bedrooms and two bathrooms. The price was less than 1% off the list, and she said it was only competing with a couple of other offers.
St. John said Dripping Springs is close enough that she can take the 45-minute drive to Austin to visit friends or go out for dinner, yoga, or shopping.
Although the house in Dripping Springs “was too much for my budget,” said St. John, she never thought she would sell her Circle C home for the money, “so it was a total win in that regard.
“I was twice as lucky,” she said, noting that she had bought in Dripping Springs “before the market went crazy” and was able to sell her Circle C house for more than she imagined, “so I was up luck on both sides. “
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