People often ask me what I would do in their situation. We just bought a home 3 weeks ago. My wife found out a Realtor was selling his own home off market. It turns out it is the exact home we had been looking for. I’m a very analytical person, probably like many of you watching this video. Analytical people have a tendency to be indecisive. Because I recognize I can be too analytical I force myself to be more decisive. We had already decided this was the type of home we wanted to buy. Before this home became available, I had thought about what I hoped to buy a home for and the maximum I would pay. That allowed us to decide quickly to make an offer and get it accepted before it hit the market.
One of the challenges many buyers have, especially if they already own a home, is looking for the deal. They’re waiting to buy a home at the same price they could have bought it a year ago. They’ll tell me they don’t have to buy a house because they already have a home. If that’s your mentality you may never buy a home.
The market doesn’t have a memory. You don’t get to buy a home at 2020 prices just because you’ve been living here. In addition to having higher incomes one of the advantages people moving here have is they don’t have a memory of what could have been. They are looking at the home prices around here and compared to the tiny house they could buy in Cupertino our real estate prices seem like a steal.
When the Cowboys signed Dak Prescott to a huge contract extension I saw this quote from Jerry Jones. It reminded me of my mindset when buying our house.
For my family I had a number in mind what I wanted to pay and a maximum number I was willing to pay. In the end we paid a lot more than I was hoping to pay and a lot less than I would have paid. I could have let my ego get in the way, but I have learned it’s better to pay more to get what I want. Over the years I’ve learned the people who paid for what they want are happy. The people who tried to get a bargain wanted to sell again in a couple years.
The happy ending is we just closed 3 weeks ago and another home with the same floor plan but without some of the features we love sold for $110,000 more than we paid.
Now let’s talk about pricing your home for the “Snowball Effect.” The Austin real estate market is super-hot. However, because buyers are very emotional there is a psychological aspect to pricing your home to get the best price. Sometimes pricing higher makes sense and sometimes lower will get you the best results. We’d have to look at your specific situation and talk about what we have seen work with previous listings and decide what’s best for you.
Here’s an interesting history of a listing. I wasn’t involved with this sale but I tracked what happened. The home came on the market priced at $799,900 and didn’t get much action. Then the home was reduced down to $759,900 and still didn’t sell. The home was taken off the market on March 8 and put back on the market with a different Realtor on March 11 at a price of $650,000. They immediately got multiple offers and the home sold for $795,200.
When you price a home too high you may not get any action. Getting offers right away is what helps getting the Snowball Effect started. Buyers are waiting to see what other buyers are doing. If they see that nobody else wants the house they will wait. You’ll probably still sell your home for a good price but may not generate the type of offers necessary to see the price of your home go to the moon. If buyers see someone else wants the house, they are much more likely to pay way above market value for your home. It’s strange that nobody bought this house when the price was $759,900 but then bought it for $795,200 but that shows you how emotional the buyers are right now.
Now let’s look at the Austin MLS housing market real estate statistics covering April, 2021. As always try to remember these statistics are covering a large area. Always contact us to talk about what is happening in your specific neighborhood.
3,386 single family sales were reported in April which is up 30.1% from 2020 but still below the 3,565 sales in April, 2019. Think about how many more people are living here from 2 years ago and it really shows why we are in such an inventory crunch.
When you listen to the news or friends you think every home is going to sell. In April, 2021 there were 221 homes that were on the market and didn’t sell. That just goes to show you every home isn’t going to sell. One of these sellers already called us and we now have their home under contract for $100,000 over asking price.
The months of inventory is still floating around 2 weeks, well below the 4-6 months which is considered a balanced market. This low inventory means buyers have few homes to choose from and have to act fast and it’s the number 1 reason why prices have gone up.
The average list price is up to $521,415 which is 29.4% over 2020 and the average sales price is up $561,469, 41.1% over last year. 316 homes sold for $1 Million or more. The average price per square foot is up to $266, an increase of 31.2%. The average number of days on market is 18, that’s how long it takes on average from list date to being under contract.
When we look at the median statistics that means if we lined up all the sales, we would be picking out the one in the middle. This can be a better indication of the overall market because it isn’t influenced by a few high-priced sales.
The median list price is up 25.9% to $408,000 and the median sales price is up 40.1% to $450,000. The median sold price per square foot was $228. The median days on market is only 5 and a better indication of the speed of the market compared to the average number of days on market.
You can call me at 512-791-7473 if you have questions about the real estate market or you want our help buying or selling in the area.