Why The Market Is Like A Microwaved Frozen Burrito

Lance Lambert, real estate editor at Fortune Magazine, called Austin the most interesting real estate market in America.

Prices went up like a rocket and came back to earth, but still up 43% since March 2020. Some people can’t get over missing out on timing the market. The truth is few people did because even those who sold at the top had to buy in the same market at the top.

If I told you in March 2020 your home would be worth 43% more in 3 years you would have been over the moon happy about that. If you’ve allowed yourself to get stuck because you missed out on the peak perhaps a change in perspective to thinking about how much better off you are than 3 years ago will help you get unstuck. Otherwise using 2021 and early 2022 as your baseline will cause you to be very unhappy.

As we have returned to a more “normal” real estate market some of the normal market dynamics have returned. If you’re like me and you grew up a latch key kid you’ve eaten your share of frozen burritos. With a microwaved frozen burrito you know the first bite will burn your mouth and the very next bite is still ice cold. When someone asks me “How’s the market?” it’s like a frozen burrito and I have to know what area and even what type of house they are asking about. There are homes I sold last year that would sell for 30% less this year and other homes that would sell for almost the same price.

Because of this frozen burrito real estate market that’s why you can’t use any of these statistics to accurately value the price of your home or a home you want to buy. There is no national real estate market and you can’t rely on your friend from the east coast to give you advice about our market, you’ll need to have someone who can give you insights into what’s happening in our local market. Whenever you are ready, we should have a conversation about your specific situation.

You will want to avoid listening to any of the doomsayers out there trying to scare you with misleading information into thinking the market is going to crash. People are cherry picking statistics to make things sound worse than they are. For example, I saw someone with a large following on Twitter using statistics from south Austin to extrapolate the entire real estate market. There are zip codes in south Austin that attracted a high volume of flippers and small builders who got caught in the downturn. In those pockets the real estate market will be very difficult. Fortunately, our area hasn’t seen that type of activity so the inventory of homes is not nearly that elevated.

What’s The Difference Between Median And Average?

When real estate statistics are given we are using either average or median prices, etc.

With average sales all the sale prices are added up and divided by the number of sales.

With median prices we are lining up all the sales and plucking out the middle sale. To give you a better understanding if I had a nickel, dime and a quarter the median would be the dime.

Many economists believe median is a better gauge when comparing statistics because it lessens the impact of any one individual sale that is an outlier.

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.