AUSTIN REAL ESTATE MARKET REPORT

That Escalated Quickly!

Austin Metro Real Estate Update August 2022

 

Let’s review the Austin real estate housing market statistics for July, 2022. The number of homes sold was 2,273 which was down 34% compared to July, 2021. Homes sold on average for $302 per square foot, up 10% over last year but down from $316 per square foot in June. The average sales price increased 10% to $669,946 compared to $611,604 last July $695,871 but that was down from $695,871 in June and the median sales price increased 7% to $531,641 compared to $498,000 in June, 2021 but down from $555,000 in June.

                                                           

Whenever someone asks me “How’s the market” I first ask them if they want the Disney version or the Jerry Springer version. After that I ask them what they have heard about the real estate market in the last 30-60 days. Things have changed so quickly it’s important for me to know how up to date they are about what’s going on.

If you haven’t been keeping up the housing market looks suddenly different than it did a few months ago. Today there are fewer motivated buyers, less showings, fewer offers and more homes on the market.

How did this happen? Essentially many of the things we previously warned could cause a slowdown have not only happened but happened at the same time.

Before I get into it it’s important for you to know we are still working, we are still selling homes and we can help you navigate through this new market. But you will need a different plan. Contact us at 512-791-7473 or schedule a consultation to discuss your situation at KopaConsultation.com.

Let's get into what happened.

Interest Rates Shot Up So Fast

At the beginning of the year everyone anticipated interest rates rising. On average experts were predicting rates would be at 3.7% at the end of the year. As it turns out that was way too low as we saw interest rates shoot up from slightly over 5% to over 6% in one week back in June. Although mortgage rates have fallen sharply over the last 6 weeks, rates are still much higher than earlier this year. The reality is higher interest rates along with higher prices and higher property taxes have made homes less affordable.

The housing market really started to slow in April and hit the brakes in June when rates jumped to above 6%. Perhaps the real estate market could have withstood higher interest rates but how fast it happened was a shock to the entire market.

Why did interest rates go up? Long story short, interest rates typically rise when there is inflation. As I write this interest rates have returned back to the mid 5% range which is going in the right direction. We likely won’t see lower interest rates until we see inflation settle down.

Regardless of whether you are planning to buy or sell you should know it’s not likely we will ever see mortgage rates as low as they were in 2021. Mortgage rates close to 3% was an aberration. The sharp spike in interest rates this June was an overreaction, but you should know mortgage rates are closer to normal now than they were over the last 2 years.

Fear Of Recession And Group Think

Anyone who called me earlier in the year to ask if it was a good time to their house, I told them “Only if you want to sell your home for more than it’s worth.”

What I meant by that was part of the appreciation in home prices was due to buyers having FOMO (fear of missing out) and making emotional decisions and aggressive offers.

In our area we also have a large number of buyers who suffer from “Group Think” meaning they don’t make decisions on their own. When buyers aren’t able to make a decision without consulting with every family member and all their friends and co-workers it was easy to see how a negative feedback loop could occur.

Right now, a large number of buyers are holding off buying because their friends are telling them the market is going to crash. The 2008 housing crash was recent and burned into many people as a very real fear.

I’ve been to a couple real estate conventions in the last month. At both the people who are putting on the events that are from large brokerages are telling everyone prices aren’t going to come down. Based on the supply and demand statistics of the inventory of homes for sale and the number of homes going under contract that’s too optimistic and not giving you good advice. What’s really happening is prices already have nudged down a little and we may see prices go down a little more. That doesn’t mean things will be similar to 2008 and you should be making decisions based on accurate information meaning you should see things as they are and not allow “Group Think” to influence you to see things as worse than they are.

Tech Stock Crashes

One of the reasons real estate prices went up so fast was because we have so many tech workers moving to the area. Many receive a large amount of compensation from their company in stock. There has been tremendous volatility in the stock market this year. No doubt some buyers have been afraid of selling stock at the bottom of the market. That impacts real estate prices because buyers pull back from paying over asking price and in some cases not having the money for a down payment at all.

We have seen improvement in the stock market in the last month. Stock prices are still down for the year but have been on their way back up. We have to be careful not assuming they won’t go down again, but hopefully some stability, particularly with the tech stocks, will bring buyers back into the market.

Everyone On Vacation

Have you been on a plane lately? What a nightmare!

Earlier in the year I was telling our clients I didn’t know how things would turn out in the summer. Something I was concerned about was all the home buyers going on vacation. Many in our area travel overseas for an extended period of time and this is the first year in 2 years traveling was opened up for many countries.

It seemed like as soon as school let out for summer everyone went on vacation. Hopefully you went somewhere fun. I know I have enjoyed seeing all my friends post photos on Facebook and Instagram of their vacations this year.

Now that school is about to start, we may see more buyer activity. For our own listings we are already seeing an increase in showings. Only time will tell if buyers returning from summer vacations creates enough demand to move the needle or not.

What Does This Mean For Home Sellers?

The market slowing down means you need a different strategy. Everything from choosing the best of our 3 pricing strategies to making sure your home is positioned correctly in the market. You’re also more likely to negotiate. You will want an experienced real estate broker to help guide you in this new market, get you the best price and have the deal making skills to keep the sale together through a successful closing.

What Does This Mean For Home Buyers?

It will be tempting to try timing the market. Whether we are talking about the stock market or the real estate market it is almost impossible to time the market. The only thing I can tell you is by the time your aunt who hasn’t bought a home in 30 years tells you it’s time to buy it will be too late.

UFor both buyers and sellers my advice is if it makes sense for you to buy and that solves your problem you should buy and if it makes sense for you to sell and that solves your problem you should sell. The only way we can help you figure out if it makes sense and solves your problem is to contact us at 512-791-7473 or schedule a time to talk at KopaConcultation.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 KopaSeminar.com.

KopaSeminar.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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 Our Featured Listings

Mistakes Home Sellers Are Making Right Now

Austin Metro Real Estate Update July 2022


 

Let’s review the Austin real estate housing market statistics for June, 2022. The number of homes sold was down 25% compared to 2021. Homes sold on average for $316 per square foot, up 16% over last year. The average sales price increased 14% to $695,871 but that was down from $705,895 in May and the median sales price increased 12% to $555,000 compared to June, 2021 but down from $570,000 in May.

                                                           

There was a week back in mid-May where 6 home sellers called me and said some version of “It doesn’t matter who I hire to sell my house because there’s nothing to buy.” Because I could see the leading indicators, I explained things were about to get much harder. As it turns out 5 of the 6 houses haven’t sold and the other one was taken off the market. For the foreseeable future we are in a professional real estate market and who you hire does matter. Here are a few mistakes I am already seeing home sellers make when hiring a real estate broker.

Hiring A Part Time Agent

Would you ride a roller coaster that only runs 2 times a year? Of course not, you’re too smart for that. But when it comes to your largest financial asset many people hire an agent who only works part time. The average agent only sells 2 homes per year. That means the market conditions are drastically different from the last time they sold a home. For example, back in February you could underprice a home $100,000 and the market would correct the mistake. Today the velocity of showings isn’t enough to hide that mistake and you will sell for a lower price.

Frequently I get messages like this text from part time agents asking me to help them with their listings. If you are expecting me to miss out on reading a book to my daughter before she goes to sleep because I was helping the part time agent you hired that isn’t going to happen.

No Negotiating Experience

Most agents who have been in business the last 2 years have never had to negotiate. If I ask them about a counter, they are going to think I mean countertop not counter offer. Where I see this harming sellers right now is if you hire an agent with poor communication skills and someone who will only text and not talk on the phone you risk your sale going sideways. Inexperienced agents when faced with needing to negotiate also seem to be letting their ego get in the way of selling the house. Selling a home can be emotional and it is my job not to be emotional so I can help you get a great result. Regardless of the industry when someone lacks negotiating experience, they tend to get emotional and in real estate if your agent gets emotional that will cost you money.

Hired The Agent Who Bought The Listing

In any market one of the mistake sellers make is hiring the agent who “buys the listing.” Market research tells us you will like the agent that tells you your home will sell for the most money (even if it isn’t true). Agents know sellers are more likely to hire them if they give them a high price. This is called “buying the listing” and in today’s market if you list your home at an unrealistic price you will wind up selling for less in the end.

Hired The Agent Who Won't Tell You The Truth

In some respect this goes back to hiring a part time agent. What often happens with an inexperienced agent is they will bury their head in the sand and won’t communicate with you. They are afraid you are going to be angry with them so they avoid you to your own detriment.

Over the years I’ve found my clients appreciate more communication, even if it isn’t the news they want to hear. One of the great uses of Zoom in my business is I can share my screen when I give my clients updates about their home. This allows me to share market data and explain what we are seeing in a way that is easier to understand.

After getting off a Zoom call with one of our clients they sent me this message.

“Thank you so much Eric for taking the time to meet us via Zoom and update us on macro-economic conditions, local real estate trends and preparing us for potential long haul. We have not seen other realtors provide such insightful information and periodic updates as are doing, it is very helpful so once again thank you!”

Up until a few weeks ago it wasn’t necessary to update sellers because everything was selling in a few days. That isn’t true for every house anymore. Whenever you are ready to talk about your home and you want someone who will be with you even if it isn’t easy call/text me directly at 512-791-7473.

                                                          

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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Perspective And Real Estate

Austin Real Estate Update June 2022


 

Let’s review the Austin Metro real estate housing market statistics for May, 2022. The number of homes sold was 2,961 which was down 11% compared to 2021. Homes sold on average for $323 per square foot, up 21% over last year. The average sales price increased 17% to $705,895 and the median sales price increased 20% to $570,000.

                                                           

It’s hard to believe our baby is almost a year old. We also moved into our new house only a month before she was born. I was what they call a “motivated buyer.”

Most people I would have the perfect house, but that’s not true. Despite our house not being perfect (even I don’t get to buy a 100% perfect house) we love it and we are so glad we bought the home when we had the opportunity.

Whenever I tell someone I am buying or selling a house they tell me I’m lucky because I have an advantage due to owning a real estate company. Although that is true, my real advantage is I keep things in perspective. When it comes to perspective there’s nothing I am doing that you can’t do, too. As the market has started to change, I am noticing a dramatic lack of perspective from both buyers and sellers.

For sellers some tried to time the market and now say they are going to wait until they can get 10 offers on their home again. What sellers have to realize is what we have been through in the last 2 years will likely never happen again. That can be tough to hear if your friends and neighbors had a different experience selling a long, long time ago…like in April.

If you say you aren’t going to move until the market is so hot you will get 10 offers the question isn’t when can you put your home on the market. The question is what’s going to happen if you’re still in the same house in 20 years. Not making your life better if you can’t get 10 offers is a huge lack of perspective.

I’m seeing two mistakes buyers are making due to a lack of perspective. According to a recent Forbes survey 42% of buyers won’t apply for a mortgage if interest rates are over 4%. Those of us who have been around the block and have some perspective realize that means they may never buy a house. Interest rates have been artificially low for so long due to multiple crises it’s hard for someone who has only been paying attention to interest rates over the last couple years to understand that. In reality if we ever see interest rates as low as they were in 2021 it’s because the economy has crashed and the buyers probably don’t have a job anymore.

The second mistake I see buyers making is prioritizing pebbles over rocks. We’ve all probably seen a demonstration of someone filling a jar with rocks and pebbles. In the demonstration the big rocks have to go in the jar first. Otherwise, you fill up the jar with pebbles and the big rocks won’t fit. It’s a good lesson in focusing on the big things in your life first.

Because we are the hardest working real estate company in America, we see so many buyers at our Open Houses. I see their lack of perspective showing up every weekend. Buyers are more concerned about things like under-cabinet lighting, alarm systems and even things like water heaters and air conditioners they miss opportunities. To someone with no long-term perspective a water heater seems like life or death at the time but for those of us who have been around the block and have a long term outlook on life we realize none of that really matters in the long run.

This text message is from a client who sent it to me last week. I helped them buy a great home 15 years ago. The house wasn’t perfect when they bought it but over the years, they have made repairs, updates and upgrades. It’s a great house in an amazing area and they love it. Looking back on their decision 15 years ago they are grateful they had perspective and didn’t pass on the opportunity when the home was available for sale.

Even though it’s hard for a real estate broker to make a living if your clients own the home for 15 years, I’m happy for them. They are a great example of someone being happy with their home by keeping things in perspective. If you are able to keep things in perspective, too, you can be successful buying or selling real estate just like they are and I have been.

                                                          

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.

                                                           

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 KopaConsultation.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 KopaSeminar.com.

KopaSeminar.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.

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.

 

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.

                                                           

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.

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