What We Are Seeing In The Market - February 2021

Posted by Eric Peterson on Tuesday, March 16th, 2021 at 5:41pm.

 

I’m going to review some of the important housing statistics for the Austin real estate market for February 2021. 

Before I get into the stats there are a couple things I want to talk about. Because real estate prices have been appreciating rapidly when I talk with sellers some will often make statements starting with “The market is so hot that XYXZ.”

"The market is so hot I can sell off market."

"The market is so hot presentation doesn’t matter."

"The market is so hot the Broker I hire doesn’t matter."

It’s as if there has been some government executive order that says you can only sell your home for $600,000 no matter what you do.

In reality, we are seeing sellers sell off market telling me they sold for $50,000 above the comps without realizing similar homes are selling on the market for $150,000 over the comps.

In reality, we are seeing sellers miss out on selling to the type of buyer who will pay the highest price by not doing any market preparation. Of course, you can sell your home in any condition but there’s a difference between selling for a low price and doing it the right way.

In reality, I have a home selling for $130,000 over another home with the same floor plan in the same neighborhood because my clients hired me and the other seller hired a real estate agent with limited experience.

Now let’s take a look at the most recent Austin housing market statistics covering February, 2021.

Remember, real estate prices are based on supply and demand. The total number of sales was down 13.7% in February but the pending sales are down 56.9%. When a home sells in February that means the home was actually listed in December or January. The lower number of March pendings isn’t due to lower demand but simply because less homes are for sale. The months of inventory is down to about 2 weeks. That means if we continue selling at the same pace and no additional homes are listed, we will run out of homes for sale in 2 weeks. This is an alarmingly low number.

Because of those numbers I expect the sales price numbers when they are reported for March to be even higher than we are seeing in February. I also expect when homeowners who have been on the fence about selling see these prices it will nudge them into putting their home on the market. If you have been considering selling contact us today to get a more thorough evaluation about your situation.

Looking at the sales prices we see the average sold price go up 27.6% in February and we’re only $5 away from the average price in the Austin area being $500,000!

On average homes are selling for 4.8% OVER asking price and homes are selling in half the time they did in February, 2020.

Median statistics can often be a better gauge of the overall market because they won’t be influenced as easily by a handful of multi-million-dollar home sales. The median sold pride was still up 23.8% and the median days on market is only 5 days. That means homes are selling almost as soon as they come on the market.

Let’s talk about the questions everyone is asking me…” Are we in a bubble?” “Is this like 2008 all over again?”

My answer is I don’t believe we are in a bubble. I think what’s going on is Austin has become a world-class city. It used to be if you told someone where you lived you would say “Austin, Texas” but now all you have to say is “I’m from Austin.”

The other biggest difference is the people who are moving here, even first-time homebuyers, have household incomes of $300,000-$500,000. Real estate is become unaffordable for many people who have lived here for 20 years but it is affordable for the people moving here.

To answer the question about this being like 2008. It’s not like 2008. In 2008 as long as you could fog a mirror you could get a loan. It’s much more difficult to get a mortgage today.

When you look at the inventory of existing homes for sale there’s no comparison to 2008. By 2007 we were at 9.6 months of inventory and by the end of 2020 we were at 2.1 months, and currently in Austin we are at only 2 weeks of inventory. In addition, the equity people have in their homes today is so great that we will see very few foreclosures and very few people who are desperate to sell.

I hope you find this information helpful. Whenever you are ready to talk about buying or selling in the Austin area including Cedar Park, Round Rock, Leander, Georgetown, Pflugerville, Buda, Kyle and Liberty Hill contact me at 512-791-7473 .

 

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