65 Offers for 1 Home | Austin February 2022 Market Update

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.

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 2023, 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.