Let’s get to the statistics for August, 2021. We are still seeing huge increases in the year over year statistics. The big story is the huge month over month increases in average and median sales prices has dipped for the first time this year.
As a reminder these statistics cover the entire Austin MLS area. If you’re interested in a particular area you may want to check out one of our other blogs and videos or contact me directly.
Let’s start by looking at the listing inventory numbers. In August there was a total of 3,969 sales which is down 9.6% from last year and slightly up from 3,846 sales in August, 2019. The number of new listings is up 15.3% to 4,873 and the number of pending sales is down 34.9% to 2,877.
The months of inventory ticked up to 1 month. That means if homes continue to sell at the current pace and no new homes were listed it would take 1 month before all the homes were sold. It’s considered a balanced market between buyers and sellers when the inventory is 4-6 months so this is still a strong market, but we are up from a low inventory of less than 2 weeks back in March.
Now let’s look at the average and median statistics. The average sales price was up 24% from last August but let’s look at this chart showing the month over month average price dropped from $589,237 in July to $566,159 in August. There was a slight dip in the average price between July and August in 2019 so it’s not necessarily a sign we are entering a long-term pullback in the market. Time will tell.
The average home sold for 3.3% over list price in August. That comes out to a sold price over $18,000 more than list price which is nothing to sneeze at but down from June when homes were selling at 8% over asking price. This is to be expected as list prices are going up we aren’t going to see as many homes selling for $200,000 over list price.
For sellers that doesn’t mean the market isn’t still great but when you are pricing your home you have to be careful about not pricing too low because you may not get as much action and buyers bidding up the price. Anecdotally this is what we have been seeing in the market where fewer buyers are asking me if they need to pay 20% over list price to get an offer accepted.
For buyers you should understand the market is still competitive but not as competitive as a couple months ago. For the great homes you will still have to come with a great offer. If you’re buying you have to be careful to be sure you have a great agent working for you and not just the agent who is giving you a rebate. I closed a sale on one of our listings this week where the buyers received a rebate of around $4,000 from their agent. What the buyers didn’t know is their offer was $34,000 more than the 2nd offer. Their agent never talked with me about the other offers we had for that listing and the seller had instructed me to reveal the other offer prices.
Buyers shouldn’t give up because this may be a small window of opportunity. However, with the market not as hot you really run the risk of overpaying if you don’t have an experienced agent who is going to represent your interests. In this case the buyers got a small rebate but paid way too much for the house.
The average number of days on the market has slightly increased to 13 days but that is whole month lower than last year. This is the amount of time from when a home is put on the market until it goes under contract. Typical sales with financing are taking another 30-40 days from contract until closing.
Now let’s look at the median statistics for August. As a reminder the median statistics mean if we lined up all the sales, the sale right in the middle is the median. Some people consider the median statistics a more accurate reflection of the trends in the market. The median sold price is up 34.2% from last year and down $12,500 from July. The median sold price to list price is 2% over list price, down from 6% over list price in June.
The median days on market is holding steady at only 6 days which is about where we have been all year. That shows you especially if it is a special home it will sell fast and buyers shouldn’t get overconfident and take too long to make an offer. The median was about a week lower than the average due to the average days on the market can be influenced easier by homes that have been on the market a very long time.
*Statistics courtesy of the Austin Board of Realtors and Independent Title.
Now let’s talk about some other important things I’ve come across this month.
Often when someone calls me to sell their home they are worried about another recent home sale nearby that sold for a low price and how that will impact the sales price of their home. Many Realtors will tell you it’s a disaster and you’ll have to now sell your home at a discount.
The truth is one sale doesn’t make a market, either a great sale or a disappointing sale. Here is a map of 3 home sales. The sellers for the home that sold for $810,000 hired a different agent. That was a disappointing sales price for me and the owners of the other 2 homes because we were going to sell the other 2 homes and they are the exact same floor plan as the home that sold for $810,000. We took a much more aggressive approach with our marketing and attracted buyers for both homes at our open houses where I could show them comparable sales and demonstrate that the $810,000 home sold too low and the homes we were selling were worth more than that. In the end we sold the other homes for $855,000 and $875,000 only a couple weeks after the $810,000 home sold. If there has been a recent sale with a disappointing sales price and you now think you need to wait to sell give us a call before you put your plans on hold.
Whenever you begin thinking about selling and putting together a make-ready plan the first thing you want to think about is the buyer profile for your home. Who they are, where they are coming from and most importantly what turns them on and turns them off.
I’ll be the first to say developing a buyer profile isn’t foolproof. The largest home I’ve ever sold was to a single man who wanted to host large poker parties. Sometimes you get lucky, but counting on luck isn’t a good strategy.
When I met with the sellers of 15508 Belfin Dr we discussed what we know about the likely buyers for their home. We also talked about the competition because I knew there were 2 other homes about to be listed on their street and those homes have superior floor plans.
Every home is different but for this home we knew the 2 most important things to buyers would be wanting a clean home and they would want a home to be bright. After living in the home with kids and dogs the carpet was understandably not in the best condition so that was replaced. The countertops were dark and not attractive so those were replaced.
Most homes can be sold as-is. There’s a difference between selling a home and selling a home for the most money. If needed we have contractors who work fast and are affordable. By paying attention to the buyer profile for their home the sellers of 15508 Belfin Dr sold their home for an extra $40,000 positive return on investment.
In comparison, the other 2 homes that were listed on the same street have not sold after being on the market for over 3 months each. Both of those owners did extensive improvements on their homes only after they had been on the market. Of course, we know there’s only 1 chance to make a great first impression so buyers have already passed over those homes and the owners are now “chasing the market” and competing with the new listings coming up for sale.
Whenever you are ready to talk about your real estate related plans call us at 512-791-7473.
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Posted by Eric Peterson on