Austin Real Estate Housing Market Update March 2021
When people ask me if they should sell their home I say “Only if you want to sell it for more than it’s worth.”
The best way I have found to describe what’s happening in the Austin real estate market is to compare the value of your home to an ice cream sundae. Think about your home’s value being 3 scoops of ice cream. That’s what it should be worth.
However, because we are seeing the number of active listings being down 78% from a year ago buyers are more and more desperate. We are seeing buyers lose out on 6,7,10 homes and getting to a point of desperation they throw a ton of extra money at the next offer. This desperation is like the whipped cream and cherry on top of the ice cream sundae.
We’re seeing homes that we have sold not get much interest and then 1 buyer gets desperate and makes an offer $50,000 - $150,000 over asking price. We didn’t even have another offer but they are so worried about losing another home in a bidding war they lose the ability to accurately value what a home is worth.
What does this mean for you? if you want to sell your house today instead of just getting 3 scoops of ice cream, you’ll also get the desperation whipped cream and cherry on top. How long this will continue is hard to say. Because it’s based on the low inventory when we start to see more and more homes come on the market this summer you might not see quite as much desperation.
It’s important to know I’m not saying we are in a bubble and I’m not saying the Austin real estate market is about to crash. I’m not saying later in the year you might get less than 3 scoops of ice cream. Based on the large down payments buyers are making I don’t expect we will see foreclosures and desperate sellers which is what you would expect to need to have a crash.
To gauge the financial stability of an area I take a look at the down payments. In areas where buyers are using lower down payments, we may see more owners struggle financially. However, this chart is data from one neighborhood in the area for the home sales in March. Out of 15 home sales, 5 were cash and of the sales involving financing the lowest down payment was $154,000. At least in that neighborhood and that month the buyers were financially well qualified and not likely to become desperate sellers.
What I am saying is we start to see an uptick in the inventory that will translate to you getting less whipped cream and you might not get that cherry on top. Most people wouldn’t describe that as a “crash” but it does mean you might not put as much money in your pocket
If you want to sell while the buyers are still desperate and you can still get that whipped cream price call me today at 512-791-7473 to discuss your situation and get a better idea of your home’s value.