AUSTIN REAL ESTATE MARKET REPORT

Is The Market Cooling Off?

Austin Real Estate Update May 2022

 

A few months ago, I talked about how when people asked me if it’s a good time to sell I would respond with “Only if you want to sell your home for a lot more than it’s worth!” The visual we used was an ice cream sundae with whipped cream and the whipped cream represented the extra amount you could get due to so few homes being on the market.

You know you can count on me to tell you what’s really going on in the market today. We are still in an incredible seller’s market but we are starting to see signs that the market is shifting and going from Super-Hot to only Hot. Home sellers are typically 3-6 months behind the market. If you are planning to sell a home it’s important you pay attention to what’s really going on and not just focus on recent sales prices of homes that went under contract when interest rates were still 3%.

Here are some of my thoughts about what a shifting market will mean…

Different Sellers Will Have Different Experiences

I expect the homes that are in high demand will remain that way. Other sellers with the types of homes I previously wrote about who typically sold at a discount and could have sold at the top of the market when the inventory of homes was lower may now see lower prices.

For example, there is a home I sold back in March that was originally listed for $790,000 and sold for $830,000. This home is on the 9th worst lot in the zip c ode. I keep track because I have already sold the #2,4,7 and 8th worst lots. At the time it sold for a great price because there was nothing else to buy in the neighborhood. Today there are 3 nicer homes on much better lots for sale for only $800,000. If we put the home we sold on the market today I expect it would sell for less than $800,000. When people ask me if we are in a bubble I always ask what that means. This is an interesting situation because for that specific seller if they had held off listing the market would have felt very much like a bubble had popped.

Pay Attention To The Active Listings And Days On Market

What we are seeing is the active number of listings has increased compared to earlier in the year. This is a chart of the active listings in Cedar Park. You can see the 7-Day average as of May 6th was 67. It’s not surprising to see the 7-Day increase at this time of the year, there is a rhythm to the market, however as I write this on May 9th there are now 79 active listings. That’s a big difference compared to February 18th when there were only 16 active listings.

Earlier in the year homes could be priced at whatever sellers wanted and a home would sell. Sellers could take the attitude that there was nothing else to buy. That has changed and sellers will have to take a different approach in this market. As a seller you have to understand that psychologically because you may have a different experience than a friend who put their home on the market in February.

Interest Rates And Fewer Buyers

Earlier in the year there was a mad rush for buyers to get under contract before interest rates went up. Some experts were predicting that would cause fewer buyers later in the year. That appears to be what is happening and we are now experiencing a double whammy of fewer buyers than earlier in the year combined with mortgage rates in the mid 5% range which is much higher than experts were predicting rates would increase.

The reality is there are fewer buyers who can qualify for your home compared to 2 months ago. I have been very careful not to tell anyone to hold off putting your home on the market because this was a possibility. What I had been telling everyone is if you want 10 offers for your home you need to be on the market when there will be 10 buyers for your home. That may not be the case.

All this may not be news you want to hear. There may even be sellers that won’t hire me because I want to give you the information you need to be successful and not just tell you what you want to hear. Regardless of market conditions I believe we give you the best chance of success. Whenever you are ready to talk about your plans call/text 512-791-7473or if it is more convenient you can schedule a time with our online calendar at KopaSeller.com.

                                                          

If you're planning to sell in 2022, now is the best time to attend our Free Home Selling Workshops. If you want to attend a workshop, get in touch with us and we will notify you when they are scheduled. As always you can check KopaWorkshop.com to see dates and times of our in-person and online Free Home Selling Workshops. For years home sellers have told me they benefited from attending our events. Sign up at KopaWorkshop.com.

KopaWorkshop.com

                                                          

The information on this page may have changed since we first published it. We give great real estate advice, but this page (and the rest of our site) is for informational use only and is no substitute for actual real estate, legal and financial advice. If you’d like to establish a Broker-client relationship, reach out to us and we’ll tell you how we can make it official. Sending us an email or reading this page alone doesn’t mean we represent you.

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How to lose $100,000 When selling your Austin Home

Austin Real Estate Update April 2022


How would you feel if you lost $100,000 when selling your home? In this article we will talk about that and the most recent real estate housing market data for Austin, Texas.

I’m Eric Peterson owner of Kopa Real Estate. Let’s review the real estate housing market statistics for March, 2022 for the City of Austin, Texas and the 5 County Austin Metro Area.

For the City of Austin the number of homes sold was down 4.5% compared to last year. Homes sold on average for $402 per square foot, up 14% over last year. The average sales price increased 8.7% to $867,225 and the median price was up 18% to $690,000.

 

For the 5 County Austin Metro Area the number of homes sold was down 11.2% compared to last year. Homes sold on average for $306 per square foot, up 24% over last year. The average sales price increased 18% to $669,815 and the median price was up 25% to $544,000.

Now let’s talk about this chart of 4 recent condo sales in the same development and how one seller lost out on up to $100,000 by selling off market. We were recommended to a couple in their neighborhood Facebook group to help sell their condo. Together we put a plan in place to get them the highest possible price. We were able to attract 10 offers for their condo and it sold for a record price of $540,000. Two other similar condos were listed by other agents and sold for only $500,000 and $480,000.

Then there was a 4th condo sale that was just reported at the end of March. This condo was never really advertised publicly for sale. It was only entered in the MLS once it went under contract. Something else that was interesting is the listing agent was also listed as the buyer’s agent when the sales data was reported.

 

When you’re selling your home you shouldn’t settle for just a base hit, you should be trying for the grand slam. In this type of market you really have to be careful about selling your home off market because you will probably leave a significant amount of money on the table. Before you sell off market contact us to see how our marketing plan is getting grand slam prices for our clients and what we can do for you. Whenever you are ready call or text me directly at 512-791-7473 or if it is more convenient you can schedule a consultation at KopaSeller.com.

                                                          

If you're planning to sell in 2022, now is the best time to attend our Free Home Selling Workshops. If you want to attend a workshop, get in touch with us and we will notify you when they are scheduled. As always you can check KopaWorkshop.com to see dates and times of our in-person and online Free Home Selling Workshops. For years home sellers have told me they benefited from attending our events. Sign up at KopaWorkshop.com.

KopaWorkshop.com

                                                          

The information on this page may have changed since we first published it. We give great real estate advice, but this page (and the rest of our site) is for informational use only and is no substitute for actual real estate, legal and financial advice. If you’d like to establish a Broker-client relationship, reach out to us and we’ll tell you how we can make it official. Sending us an email or reading this page alone doesn’t mean we represent you.

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Are Home Prices Continuing To Rise? - Austin Real Estate Update March 2022


 

Many analysts projected home price appreciation would slow dramatically in the fall of 2021 and then continue to soften throughout 2022. So far, that hasn’t happened. The major price indices are all revealing ongoing double-digit price appreciation. Here’s a look at their reports on year-over-year price appreciation for December:

To show that they’re not seeing signs of softening, here’s a graph that gives the progression of all three indices for each month of 2021.

As the graph above reveals, last year, home price appreciation accelerated dramatically from January to July according to all three indices. Then, it began to decelerate in August when prices appreciated at a slower pace, but it didn’t decline. Many thought that would be the beginning of a rapid slowdown in the level of home price appreciation, but as the data shows, that wasn’t the case. Instead, prices began to level off for a few months before two of the three indices saw appreciation re-accelerate again in December.

To clarify, deceleration is not the same depreciation. Acceleration means prices rise at a greater year-over-year pace than the previous month. Deceleration means home values continue to rise but at a slower pace of year-over-year appreciation. Depreciation means prices drop below current values. No one is forecasting that to happen.

In fact, the FHFA revealed that price appreciation accelerated in December in six of the nine regions it tracks. Case Shiller showed that appreciation accelerated in 15 of the 20 metros they report on. As Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

"After some signs of slowing home price growth...monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel."

What Does This Mean For You?

Whether you’re a first-time purchaser or someone looking to sell your current house and buy a home that better fits your needs, waiting to decide what to do will cost you in two ways:

  1. Mortgage rates are forecast to rise this year.
  2. Home prices should continue to appreciate at double-digit levels for some time.

If you wait, rising mortgage rates and high home price appreciation will have a dramatic impact on your monthly mortgage payment.

Bottom Line

Maybe the best thing to do is listen to the advice of Len Kiefer, Deputy Chief Economist at Freddie Mac:

“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”

                                                          

Nobody Can Afford A House Anymore

Too Many People Are Buying Them

There’s no doubt it’s a tough market for homebuyers. But it’s not impossible. After all, there are people buying houses every day. The buyers who have a good strategy are successful. We just helped 2 more couples sell their homes, negotiate a leaseback so they could stay in their home and get offers accepted on their next home. That means I know it can be done and we can do it for you, too!

On the other hand, I see many buyers at our open houses every weekend that are frustrated by the market. In many cases their frustration is self-inflicted, either by having the wrong mindset or working with a real estate agent that isn’t giving them a chance to win. Time and time again we are able to get the buyers we are working with under contract while other buyers struggle. If you are in the beginning process of buying a home here are a few things you should look for in a Realtor to help you win in today’s real estate market.

  • A Realtor who can give you “big picture” advice. You may have heard local buyers have a lower budget than relocation buyers. That is true but that doesn’t tell you the whole story. In my experience the local buyers are trying to buy a home like it’s 2019. When there is a home for sale in their desired neighborhood, they will tell me about a friend who bought a home in 2019 for significantly less money. They have a memory of what could have been. I always have to explain that I can’t find the keys to my magic real estate time machine to take us back to 2019.

The market doesn’t have a memory and neither do relocation buyers. Unlike local buyers, the relocation buyers are comparing a home to what they could have bought in California or New York. The relocation buyers are thinking about what the home will be worth in 2029 not what it was worth 3 years ago.

I have clients who just purchased a new home. It took over a year to build. I remember somewhere towards the end of 2020 we were sitting on their driveway talking about their long-term plans. If we were only thinking about the short term they never would have decided to move forward with the new home. Instead, we sat on their driveway talking about what I thought was going to happen over the next 10 years. Building a home right now with all the supply chain issues is not for the faint of heart. There were many times they could have thrown in the towel and given up. I encouraged them to stick with it because I was thinking about the big picture. It’s a good thing they did because if they passed on that opportunity they couldn’t build a home in that same neighborhood for another 2 years.

In the end they said they appreciated my emotional support and sometimes I think that is a good way to think about what I do for our clients.

  • A Realtor who understands the trajectory of the market. What you probably don’t understand is the average Realtor only sells 2-3 homes per year. They aren’t out in the market every day and they aren’t studying current real estate pricing

The market is up about 8% since the beginning of the year. Many homes are under contract significantly over asking price. If you are working with a Realtor who is only showing you sales data from the past 3 months you are going to lose offer after offer.

Where this also comes into play is when you are considering homes that aren’t perfect and I hate to tell you this but that is 100% of the homes for sale. No home is perfect, not even my own home.

At an open house last weekend I saw a Realtor doing a Facetime tour with a buyer. The Realtor was pointing out things like an area of touch up paint that will cost $75 and that there are no under cabinet lights. The next time a home like that comes on the market it will cost an extra $10,000. You can buy a whole lot of touch up paint and lights for a lot less than $10,000. You need a Realtor who can keep you focused on the trajectory of the market and how that compares to minor defects in a property.

  • A Realtor who understands the contract and what will be appealing to sellers. I’ve presented over 2,000 offers to sellers. That gives me a good idea of what gets sellers excited about an offer and what turns them off. The other benefit of listing homes is I see what Realtors are doing right now with offers and not what worked 2 years ago.

Over 50% of the offers we receive have no chance of being accepted. Sometimes this is simply offer paperwork that isn’t complete and sometimes the terms are not competitive compared to what other buyers are offering in the market today.

The majority of Realtors when sending an offer don’t bother to reach out to the listing agent to find out what is important to the sellers. This is lazy and this is a huge mistake because you miss out on the opportunity to tailor your offer towards what is important to the seller rather than only including terms the Realtor always includes in an offer. Each seller is different so there is no one size fits all offer that will be accepted every time.

  • A Realtor who can explain the contract to you so you can make decisions based on your own risk tolerance. I will often hear other Realtors say they need to protect “their buyers.” This is a mistake. Last weekend a Realtor told me he needed to protect his client by including a contingency in the offer. That contingency was a deal breaker for the sellers. After the sellers accepted another offer the buyer himself contacted me to find out why his offer wasn’t accepted. It turned out if he knew that contingency was going to get his offer rejected, he said he wouldn’t have needed that contingency. Woulda, coulda, shoulda! It’s too bad they aren’t going to get another chance with that home.

You are going to have a higher or lower risk tolerance than I do. This may sound strange but it’s not my job to protect you. It’s my job to explain everything to you and let you decide how aggressive you want to be. From my experience buyers who thoroughly understand the contract decide to make more aggressive offers that have a better chance of being accepted.

                                                          

If you’re thinking of selling your house this year, now is the optimal time to list it. Let’s connect to discuss how you can put your house on the market today. When you are ready please contact us by phone/text at 512-791-7473 or if you like you can choose from our availability at KopaSeller.com.

                                                          

If you're planning to sell in 2022, now is the best time to attend our Free Home Selling Workshops. If you want to attend a workshop, get in touch with us and we will notify you when they are scheduled. As always you can check KopaWorkshop.com to see dates and times of our in-person and online Free Home Selling Workshops. For years home sellers have told me they benefited from attending our events. Sign up at KopaWorkshop.com.

KopaWorkshop.com

                                                          

The information on this page may have changed since we first published it. We give great real estate advice, but this page (and the rest of our site) is for informational use only and is no substitute for actual real estate, legal and financial advice. If you’d like to establish a Broker-client relationship, reach out to us and we’ll tell you how we can make it official. Sending us an email or reading this page alone doesn’t mean we represent you.

Have a Question?

Contact Us Now!

Provide a valid email address.
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65 Offers | Austin Real Estate Update February 2022


 

65 offers for 1 home! In this Austin housing market update we’re going to talk about how to get 65 offers on your home, the most recent real estate statistics for Austin, Texas, rising interest rates and what all this means for you as a buyer or seller of real estate in the Austin area.

First, let’s review the statistics for the January, 2022 Austin real estate housing market.

The number of homes sold in January, 2022 was 2,116 which was down 11.83% from 2,400 sales in January, 2021.

The average sold price in January, 2022 was $578,554 which was up 25.84% from $459,760 in January, 2021.

The average sold price per square foot in January, 2022 for Austin was $292.83 which was up 26.3% from $231.72 in January, 2021.

The median sold price in January, 2022 for Austin was $250.15 which was up 30.97% from January, 2021.

Homes went under contract in 10 days which was up 3 days from last year but still a super-fast moving market and we remain in a strong seller’s market.

It’s hard to imagine the housing market accelerating because it was already red hot but that’s what’s happening. Would you believe there were 65 offers on a home in the area in January? This home was listed for $750,000 and it’s hard to imagine there are 65 buyers for a home priced at $750,000 in the area.

It’s interesting to look at the breakdown in offers for a home with this much activity.

The highest priced sale in January, 2021 was $717,000. This year there were 7 sales over that price.

In 2021 there were 46 sales under $500,000. This year there were only 24 sales under $500,000.

                                                          

It’s hard to imagine the housing market accelerating because it was already red hot but that’s what’s happening. Would you believe there were 65 offers on a home in the area in January? This home was listed for $750,000 and it’s hard to imagine there are 65 buyers for a home priced at $750,000 in the area.

It’s interesting to look at the breakdown in offers for a home with this much activity.

Out of 65 Offers

  • 5 offers: $750K-799K
  • 22 offers: $800-850K
  • 23 offers: $851K-899K
  • 10 offers: $900K-950K
  • 5 offers: 951K and up

Let’s talk about how you get 65 offers for your home. The most important thing is you list a home that should have been listed for $925,000 for $750,000. That’s right, this home was significantly underpriced. Maybe that was a mistake or maybe it was a great strategy because in the end they got a good result although it sure wasted a lot of time for a lot of buyers and agents.

Next you want to have something special about the home. This home is a large single-story home with 4 bedrooms on an over quarter acre lot facing a preferred direction for many of the buyers in our area along with a 3-car garage and zoned for great schools.

This is the type of home that would qualify for what I call aspirational pricing. This is where there are so many attractive features of a home it will sell for higher than each individual feature added together would indicate. There is somewhat of a multiplier factor that happens because it’s hard for a buyer to find another home with all the same features. It might be easy to find a home with 2 of the features, but not all of these.

Next, many real estate brokers will tell you they always get offers accepted. Every…Single…Time! Of course, unless they are 1 for 1 they aren’t telling you the truth. The truth is I’ve had hundreds of offers not accepted. We had clients that made an offer for this home. Although the offer for our clients was very competitive, sadly it was not accepted for this home. In this market you have to have the memory of a baseball pitcher who just gave up a home run and get back in the game. We had to dust ourselves off, learn from what happened and we got our clients under contract the next week on an even better home for them.

Now let’s look at interest rates. Expectations for this year were rates would increase to 3.7% by the end of the year. This morning I received an interest rate update that rates are already at 4%.

Ivy Zelman, a respected housing industry analyst who was ahead of the curve for the 2008 housing crash says the acceleration in the market is due to buyers that were on the fence having FOMO about interest rates going up more than they have. Ms. Zelman says this fence sitting flurry of activity usually lasts 3 months and then we could see a significant slowdown in the market. She also believes we are overbuilding and once the supply chain issues are resolved there will be a backlog of new homes coming on the market.

In a recent interview Ms. Zelman said this backlog will be like “Winter Is Coming.” We will have to wait and see. Of course, interest rates increasing will affect payments, but that doesn’t mean prices will come down. It may just slow the rate of increase or cause a little inventory to build.

None of that would be a disaster but for home sellers who are sitting on the fence it might mean you will be selling later in the year with more competition and buyers who are less motivated.

To gauge buyer demand, the leading indicator we want to watch is the weekly purchase loan application. Not the overall activity that also takes into account refinance activity, only purchase loans. If we see a significant drop in mortgage applications that may be the canary in the coal mine that tells us the real estate market will be softer later this year. Our recommendation for anyone planning to sell in the next 3-4 months is you should contact us today so we have you on our radar in case we recommend to our sellers to get on the market earlier than initially planned.

We will have to wait and see. Of course, interest rates increasing will affect payments, but that doesn’t mean prices will come down. It may just slow the rate of increase or cause a little inventory to build.

None of that would be a disaster but for home sellers who are sitting on the fence it might mean you will be selling later in the year with more competition and buyers who are less motivated.

To gauge buyer, demand the leading indicator we want to watch is the weekly purchase loan application. Not the overall activity that also takes into account refinance activity, only purchase loans. If we see a significant drop in mortgage applications that may be the canary in the coal mine that tells us the real estate market will be softer later this year. Our recommendation for anyone planning to sell in the next 3-4 months is you should contact us today, so we have you on our radar in case we recommend to our sellers to get on the market earlier than initially planned.

Bottom Line

If you’re thinking of selling your house this year, now is the optimal time to list it. Let’s connect to discuss how you can put your house on the market today. When you are ready please contact us by phone/text at 512-791-7473 or if you like you can choose from our availability at KopaSeller.com.

 

                                                          

If you're planning to sell in 2022, now is the best time to attend our Free Home Selling Workshops. If you want to attend a workshop, get in touch with us and we will notify you when they are scheduled. As always you can check KopaWorkshop.com to see dates and times of our in-person and online Free Home Selling Workshops. For years home sellers have told me they benefited from attending our events. Sign up at KopaWorkshop.com.

KopaWorkshop.com

                                                          

The information on this page may have changed since we first published it. We give great real estate advice, but this page (and the rest of our site) is for informational use only and is no substitute for actual real estate, legal and financial advice. If you’d like to establish a Broker-client relationship, reach out to us and we’ll tell you how we can make it official. Sending us an email or reading this page alone doesn’t mean we represent you.

Have a Question?

Contact Us Now!

Provide a valid email address.
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