If you’ve been keeping an eye on the Austin real estate market lately, you’ve surely heard that the ATX has become one of, if not the most, competitive markets for home buyers in 2021. You’ve probably heard about homes flying off the market at record speeds, selling for hundred of thousands of dollars over asking price, and new builders only being able to sign 1 or 2 contracts a month for homes that won’t even be completed until 2022. However, something you may not have heard about yet is the subtle shift in the Austin real estate market over the past two weeks. I’ve seen homes sell for asking price, homes that only had a few offers, and the return of due diligence periods.
This shift is subtle, and if you are not actively working in it everyday, you may not even notice it. But I feel it, and if it continues, it will have implications. You may be wondering why this may be. All of the signs point towards continued demand and thus higher prices. And, that is still true, but the market is behaving slightly differently. I hypothesize this subtle shift is due to a few different variables.
Many individuals looking to purchase in the Austin market are quite simply beginning to feel defeated. I have a few buyers who have been trying to buy a home for the past few months, and are still empty handed. They’ve offered well over asking price, waived their appraisal contingencies, and offered 5 digit earnest money deposits yet they still haven’t been able to get an accepted contract. After the 4th or 5th time of this, some buyers begin to feel like they simply cannot win in this ultra-competitive market. Some of these buyers decide to stop trying altogether, or opt to purchase in another city altogether. Others are still observing from afar, but are less motivated to make offers on available homes.
Sold Home Data is Starting to Show the Truth of the Market
In order to determine an appropriate asking price for a home, you need to look at the sold prices for comparable homes. Since the home sale cycle from list date to close date is usually around 30 days, sold stats are constantly lagging behind the market. Over the past few months, most homes have been appropriately listed at prices determined by the sold comparable homes. However, the majority of those homes went under-contract at a price far higher than the asking price. We are now beginning to see those homes close, and new listings are being priced using those sold stats.
For single-family homes listed in the Austin MLS, the median list price/sqft increased from $197/sqft in February to $213/sqft in March. As listing prices are increasing, I foresee this leveling out the difference between asking price and contract price. This is not to say that the majority of homes will not continue to sell for above asking price. I think that trend will continue, but I think we will see the difference between asking price and sold price decrease. Earlier this year we saw some homes selling for hundred of thousands of dollars over asking price; I foresee the ratio of list price to close price decreasing in the coming months.
Increase in Inventory
The February storms caused a serious strain on an already tight supply of inventory in the Austin market. Some homeowners that planned to list in February were forced to wait to list due to unexpected repairs as a result of storm damage. Others simply decided to wait to list, since the city was essentially shut own for an entire week. In February, we had 2,360 new single-family residential home listings in the Austin MLS. In March, we had 3,745 new single-family homes hit the market. Historically, we see the largest inventory increases in the Austin real estate market between March through July. So far, the number of new listings in 2021 has been lower than what we saw last year (even with the pandemic). However, it looks like the trend for increased listings in the spring to summer months will continue for 2021.
What This Subtle Shift Means for Austin Buyers and Sellers
This subtle shift should benefit those looking to purchase in the Austin market. Home prices likely will continue to be the highest they have ever been, BUT as sold comps catch up to the true market it will be easier for buyers to purchase homes. Appraisal waivers (essentially agreeing to purchase the home no matter what it appraises for and agreeing to bring the difference between the appraised value and the offer price in cash to closing) were almost mandatory over the past few months. This made it nearly impossible for someone without a ton of extra liquidity to compete in multiple offer situations. It was particularly detrimental to those buyers looking to purchase a home using a VA or FHA loan as these loan programs expressly prohibit the use of the Appraisal Waiver Addendum. Now that we are beginning to see the new market sales data, homes are more likely to appraise at or closer to offer prices. This has huge implications for any buyer using a loan to purchase a home.
For someone considering selling their home in Austin in the near future, you can still expect your home to sell for top dollar. In fact, you will likely get more for your home in the coming months than if you had listed your home for sale in the first quarter of 2021. However, you may not get all of the other offer terms that many home sellers received earlier this year. We saw home sellers receiving offers where the buyer incentivized the seller with a complimentary lease back. Sometimes, the buyer offered for the seller to stay in their home for an entire year for free after the buyers purchased the home. These will likely become more conservative or dissipate entirely. You also may see the re-emergence of typical seller expenses such as the title policy, and buyers may begin requesting a seller paid for home warranty again. All in all, these nominal expenses will not adversely affect your bottom line. You can expect to still sell your home for the highest price, but you may arrive there with fewer offers and more buyer preference in regards to offer terms.
If you have questions about the Austin real estate market, or need advice when contemplating your next move, contact me.
One great aspect of Austin is that it is home to two lakes. Lake Travis and Lake Austin are both technically dammed portions of the Colorado River. Lake Austin is a narrower meandering constant-level lake while Lake Travis is much larger and deeper, but it is subject to varying lake levels. Both lakes offer ample opportunities for recreation. If you are ready to enjoy the lake life in Austin, but not quite ready to plunge into buying a waterfront property, you may want to consider one of these communities which offer boat ramp access to residents. Purchasing a property in a community with lake access guarantees that you will be able to get out on the water with ease, and avoid the crowds at the public boat launches. There are numerous great communities in Austin which offer residents access to Lake Travis or Lake Austin. Here are some Austin communities with lake access you may want to consider.
lake Austin Communities
Apache Shores is located off RR 620 in the acclaimed Lake Travis Independent School District. The community offers a diverse array of property types, and residents enjoy access to a number of amenities including a community boat launch. There are also several boat docks available for day use as well as a large area with picnic tables and grills where you can relax after a long day on the lake. Other community amenities include a pool, tennis and basketball courts, childrenâs park with a playscape, and a disc-golf course.
Cuernavaca is located off Bee Cave Road between 360 and 71 in the exemplary Eanes ISD. Cuernavaca has a voluntary HOA. Membership in Cuernavacaâs Lake Hills Community Association grants members access to the community pool, private boat launch and a waterfront park.
Lake Point is located 12 miles from downtown Austin off Bee Cave Rd in Lake Travis ISD. Residents of Lake Pointe enjoy access to a waterfront park and day docks. Unfortunately, there are no motorized boat launches in Lake Pointe. Community amenities include pools, golf courses, and trails. Also enjoyable is the short journey to the Hill Country Galleria and all of the retail opportunities that entails.
Greenshores is located in the Austin ISD. Locals enjoy access to a private park on Lake Austin with a boat ramp.
Lake Travis Communities
Rough Hollow is located off 71 just west of Lakeway. Residents have access to an array of amenities, including the Yacht Club & Marina which offers complimentary paddleboards and kayaks, a fitness center, a water themed village, and 22 miles of hike and bike trails.
Tessera On Lake Travis
Tessera On Lake Travis is located in Lago Vista in the Lago Vista ISD. Amenities include a private boat launch, gorgeous pool, exquisite hiking and bike trails, and over a mile of shoreline.
Lago Vista POA
Lago Vista is located on the Northshore of Lake Travis. Residents enjoy access to boat ramps, lakefront parks, golfing, tennis courts and more all nearby. Residents also enjoy community exercise facilities, pickel ball courts, a small airport & much more.
Lakeshore Ranch is located in the Lago Vista ISD, sitting on the Lake Travis shoreline. Lakeshore Ranch has a private HOA waterfront park with a boat ramp. Residents enjoy easy access to the Balcones Canyonlands National Wildlife Refuge, prime shopping, nearby trails, zip-lining, and fantastic restaurants.
Located in the town of Spicewood, homes in Laguna Vista also feed to Lake Travis ISD. Residents love the private community boat ramp, swimming, fishing, and living an outdoors life.
Paleface Ranch is located west on Highway 71 in the Lake Travis ISD. Residents enjoy access to a community boat launch. This neighborhood is located on the Pedernales River arm of Lake Travis so it may go dry when we are experiencing extreme droughts.
Bee Creek Estates
Bee Creek Estates is located off of Highway 71 in the Lake Travis ISD. Only a short drive from the Hill Country Galleria. Locals enjoy the private park with a boat ramp for lake activities and nearby golf courses, and wineries.
Naumanns Camp is a small community located in Spicewood, on the northern side of the Pedernales River. Lot sizes ranging from 0.5-5 acres. Naumanns Camps feeds to Marble Falls ISD.
Paleface Homesteads is located just north of Pedernales River in the Marble Falls ISD. Locals enjoy golfing at Pedernales Golf Club, owned by Willie Nelson. You can also find comfort at Spicewoods Vineyards and Gaucho Winery.
It’s been over a year since our beautiful world shut down. We said goodbye to large weddings, parties, the nightlife, concerts, theaters, and so much more. Who’s ready to have fun again? I know I am! Let's take a look at some fun activities in Austin, TX to make you feel like you're living your best life again.
Barton Creek Greenbelt:
The Barton Creek Greenbelt is located in South Austin and stretches over 12 miles of land. The Barton Creek Greenbelt is known for its beautiful hiking trails, swimming spots, biking, rock climbing, and is an overall great way to spend a day in the outdoors. Read my full Insider's Guide to the Greenbelt here.
This interactive museum gives you a fun way to enjoy numerous exquisite works of art! Snap countless photos and make sure you post them on Instagram for all of your friends to see. This is a museum for all ages to enjoy. Bring your kids, bring a date, bring Bob from 2 houses down. You will enjoy the day and see many pieces that will open your mind to exploring places you never thought possible. Learn more here.
Relax while sipping delicious wine and having some laughs with your friends at the Austin Winery. Enjoy the many selections to choose from and have a snack while you sip. The friendly and knowledgeable staff make it that much more enjoyable. The Austin Winery is located in South Austin's St. Elmo district. Learn more here.
Feel like dipping your feet in the water? Head over to Rowing Dock where you can select from kayaks, canoes, and paddleboards to experience Ladybird Lake like a true Austinite. Located at 2418 Stratford Dr, Austin, TX 78746, the Rowing Dock is open daily from 9AM-8PM. What are you waiting for? Bring your friends, come alone, or load up the family and head over now! Learn more here.
Roam South Congress:
Enjoy the fun boutiques, eat at some delicious restaurants, view the street art, and enjoy what only Austin can bring you. Try on some crazy costumes at Lucy In Disguise With Diamonds, Have a yummy cone at Amy’s Ice Cream, stop in at Hotel San Jose for some amazing frosé, and don’t forget to snap a pic at the famous “I love you so much” mural at Jo’s Coffee. There's also an entire new section known as Music Lane which has some great restaurants and new shops to explore too!
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.