For months on end, it's seemed as if there was no end in sight for the incredibly competitive Austin real estate market. In fact, just looking at the latest numbers it still appears that way. Last month, the greater Austin area saw an all-time high median sales price of $482,364; Simultaneously 4,369 homes were sold, a record number of home sales compared to any previous June numbers.
Yet, these numbers don't show the full picture. Real estate stats are always lagging indicators. In general, it usually takes at least 30 days for a home to go from hitting the market to sold. Thus, the sales data for June is based on homes that hit the market in May. In the past month, we have started to see an increase in listings. It's not crazy, but it is impactful. In the City of Austin, we saw 2,044 new residential listings in June compared to 1,724 in May.
An increase in supply is good news for prospective home buyers. This means more homes to choose from, and less competition. This subtle increase is exciting; yet we are still very far from a balanced market. You can still expect to see multiple offers. However, you may only be competing with a handful of other buyers compared to the double digit number of offers we frequently saw on homes over the past 6 months. As you might expect, the premium paid over ask price is simultaneously beginning to decrease.
All of these indicators show that pricing is starting to stabilize but that doesn't mean home prices are going down. Home prices are likely to continue to stay at these elevated levels. That being said, I do foresee a return to the normal cyclical pattern for real estate sales in the Austin metro area. Over the past year, there was no normal slow down for the winter. In fact, the median sales price in the MSA stayed the same or increased month after month. In the future, I see a return of spring being the peak selling season- when buyers can expect the most inventory and sellers can expect to sell for the highest price.
That being said, here are the latest Austin area market stats:
City of Austin:
Compared to June of 2020
Greater Austin Area (AKA Austin Round Rock MSA):
Compared to June of 2020
Curious to know what's happening in your specific neighborhood? Contact me with any questions you may have. I’d love to hear from you!
There are quite a few different ways to determine a property’s value. As a real estate broker, I most often determine a fair asking price or listing price based on the relevant comparable sales. Other entities such as the county tax assessor may also use the sales comparison approach to determine a given home’s value; yet, our valuations may be vastly different. That’s because the different types of valuations are ultimately defined by the entity evaluating the property’s worth.
Appraised value is a term used to describe the lender’s valuation of a given property. When you buy a home with a loan, the lender needs to determine what the value of the home is in order to limit their risk. The lender orders an appraisal of the subject property once a buyer is under-contract on a property, but before the closing date. The appraiser then compiles a report known as an appraisal. The report is most commonly performed using the sales comparison approach in which the appraiser identifies three to six similar properties that have sold recently in the area, and then makes adjustments to these properties in order to determine the subject property’s appraised value. Occasionally, the appraiser may use a different approach such as the cost approach or the income approach to determine the appraised value. The cost approach uses current construction costs combined with depreciation to determine the appraised value while the income approach uses rental revenue to determine the appraised value. The sales comparison approach is most-commonly used in residential real estate, and if you are purchasing a new home or refinancing an existing one, the end result of this analysis is a determination of appraised value. Ultimately, the appraised value is what the lender determines your home is worth.
The assessed value of a home is what a county tax assessor determines a home is worth for the purpose of levying property taxes. Oftentimes, I will have buyers looking at a home’s assessed value as an indication of a fair asking price. However, the assessed value is rarely the same as the market value. The assessed value is determined annually by the county and market value can change weekly. Additionally, the assessed value is usually determined from a computer. Looking at similar size homes on the same street only tells half the picture. Just because your neighbor’s home is worth $600K doesn’t mean yours is too. What if your neighbor’s home has solid gold toilets and italian marble while you're still rocking lime green linoleum? The county tax assessor likely has no idea that your home isn’t worth as much as your neighbor’s. Unless you say something and step up to protest your assessed value, the county will continue to value your home at the rate they think is correct. Texas is also a non-disclosure state which means that home sale values are not public information. They do rely on information gathered from real estate syndication sites like Zillow to determine the asking price for a home. They also know when a home is sold, they just don’t necessarily know the exact sales price. Thus, the assessed value is the county tax assessor’s best guess as to what your home is worth.
The market value of a property is what a buyer is willing to pay for a property and a seller is willing to sell a property for in an open market. The market value of a property is oftentimes quite different from the assessed value, and may even be vastly different from the appraised value for a given property. Recently, in the Austin real estate market we have seen widespread waiving of appraisal contingencies by prospective buyers. When a buyer does this, they are saying that even if the lender determines the appraised value is lower than the contracted sales price they will proceed with the sale and bring additional cash to the table in order to close at the contracted price. Thus, the market value is higher than the appraised value. Alternatively, you could have a home that appraised for a value that is higher than what buyers are willing to pay. The market value is simply what a buyer is willing to pay for a given property.
When you are trying to determine an appropriate asking price to list your home for sale for or trying to figure out how much money you should offer on a home you need to think about all of these values. However, the market value is ultimately the value that will be the most important.
Thinking about buying a Short Term Rental in the Austin Area? Here's Your Complete Breakdown on the Rules and Regulations for Operating a Vacation Rental in Central Texas
Austin and the surrounding areas are booming right now and more and more people are coming to visit each day to get a little piece of this amazing city. Perhaps you are one of these people and you decided you like Austin so much you want to buy a home here that you can use from time to time and then rent out while you're not here. That's a great plan, but in order to make your dream a reality, you need a thorough understanding of the rules and regulations regarding short term rentals (STRs). They vary immensely throughout central Texas, and the success or legality of your investment property rests on understanding these various rules.
No matter where you are looking to purchase, it's important to understand that STRs are generally classified as rentals less than 30 days. If you are planning to rent your home out monthly or for even longer durations there are far less municipal rules. If you are planning to use your property as a vacation rental, this post is for you!
Within the city limits of Austin, the regulations regarding short term rentals are pretty strict. They have a comprehensive permitting process and caps on the number of short term rentals allowed. In fact, in the City of Austin, it's almost impossible to get a permit to operate a short term rental for a single family home if it's not your primary residence.
However, a plethora of nearby Austin suburbs have no STR rules at all, and there are unincorporated areas that aren't subject to any municipal oversight! Dive into the list below to know what the regulations are like throughout central Texas.
To obtain a permit to operate a bed & breakfast or vacation rental, an applicant must go through the Conditional Use Permit (CUP) process and receive an approved permit.
The CUP process includes:
Interested in finding out more information about purchasing a home to use as a short term rental in the Austin area? Contact me for details
Happy 4th of July weekend! Need some fun and exciting ideas to celebrate this year in the ATX? We've rounded up a view great options to check out if you don't already have plans for this holiday weekend.
Live Fireworks and a Movie at Doc’s Drive in Theater:
With FIREWORKS before the movie, live music, as well as a wide variety of food and drinks, Doc's Drive in is a great option for anyone looking to have a good time! They will have two simultaneous showings on both the 3rd and the 4th. You can catch The Sandlot on Screen 1 or Independence Day on Screen 2.
July 3rd and 4th
Live Music 7-9PM
Live Fireworks Show 9pm
1540 Satterwhite Road
Buda, TX 78610
Get more information and buy your tickets HERE
4th of July Blues, Brews, & BBQ with The Larry Harris Band:
No cover, all ages are welcome, and dog friendly. Celebrate the 4th of July with live music, BBQ food, and some refreshing draft beers at Oakwood BBQ & Beer Garden.
July 4th from 11AM-8PM
307 E. Braker Lane
Austin, TX 78753
Get more information HERE.
HEB Austin Symphony July 4th Concert and Fireworks:
Enjoy spectacular fireworks and some live music from the Austin Symphony at this free event.
Sunday, July 4th at 8:00 pm
900 W Riverside Drive
Austin, TX 78704
More information HERE.
Red, White, and Boom 4th of July Festival:
Visit Typhoon Texas for wild water rides, live music, contests, fireworks, and a hot air balloon ride.
July 2nd, 3rd and 4th 10:30 am - 7:00 pm
18500 Texas 130 Service Road
Pflugerville, TX 78660
Purchase tickets HERE.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.