It may no longer be the hottest real estate market, according to Zillow but Austin still made it on its Top 10 list. If you've been watching the Austin real estate market in the last few months or years, you have seen how much home values have increased. Maybe you've seen neighbors list their homes for a sales price multi-fold from what you paid. Maybe you've heard anecdotal stories from friends about the demand they got for their home and how quickly they went under contract. Maybe you have thought about selling and wonder if this market will keep up and if you should sell while it's hot.
1. What are market conditions for sellers?
Compared to 2021, January's median sales price went up by 30%. Depending on the county and zip code you are in, this might be even more. It's a pretty consistent story for 2021 and 2020.
Another important metric to look at is Months of Inventory. Months of inventory is the current supply of homes offered for sale relative to the number of homes being purchased. The result indicates the number of months it would take to sell all properties currently for sale at the average monthly sales pace. At 6 months of inventory you have a balanced housing market. When inventory levels exceeds 7 months, housing demand is low and prices are likely to fall. When the inventory levels fall below 6 months, this is a sellers market where sellers have more control of price and terms. As the below graph shows, Austin has been in a strong sellers market for the last few years with December 2021 going as low as 0.6 months.
This confirms that Austin is in a strong sellers market and has been for the last two years.
Statistics aside, this is what we have been seeing in the last few months from working with our clients: it's still very competitive for buyers with houses more often than not going over list price and appraisal value, sometimes within days. Buyers are writing strong offers, not only with the offer price but also other offer terms favorable to the seller.
2. Is demand sustainable?
To get a better sense of whether demand will keep up we need to understand where the current demand is coming from. At the beginning of 2022, the metro area population of Austin was 2,117,000 - this represents a 3.12% increase from 2020 and equals a growth of 183 people/day. Comparably lower cost of living along with business growth in Austin attracts young professionals from the East and West Coast and other parts of the country. Businesses draw more residents into the Greater Austin area, and new mixed-use developments are popping up across the city. The construction of One Uptown in the Domain area has just started, and other mixed-used developments are in planning like Velocity in South Austin and Northline in Leander.
According to the Austin Chamber, these are the biggest relocation announcements from the last few months:
- Tesla (expansion): 5,000 employees (Austin)
- Samsung Austin Semiconductor: 2,000 employees (Taylor)
- Amazon fulfillment center: 2,000 employees (San Marcos)
- Amazon digital product Dev. (expansion): 2,000 employees (Austin)
- CelLink: 2,000 employees (Georgetown)
- TikTok: 750 employees (Austin)
So there is an influx of people to Austin. Then add on more people working from home and looking for more space during the pandemic.
Will people continue to move to Austin? Will construction eventually catch up with the higher demand? And will increasing interest rates make buying less attractive or more difficult? With a historically high inflation rate and the Fed looking to taper asset purchasing, experts' predictions range from expecting mortgage interest rates of 3.4% to 4% .
3. What condition is your home in?
While the market as a whole is strong, there are property-specific factors that impact the right time to sell. For example, the type and condition of your property can dictate when the right time is to list. For example, a 3/2 first-time home buyer house might be more attractive as move-in-ready and there might be repairs or cosmetic updates that can drive up demand. Or a fixer-upper might be attractive for investors in an up-and-coming neighborhood and putting in money and time to do updates wouldn't actually yield a higher net (depending on condition). If your home needs some remodeling or staging we can help with a timeline and list the property only after it is in top form and ready to be viewed by potential buyers.
An experienced Realtor can analyze past activity in your neighborhood and advise on the best way forward to maximize returns.
4. What are your personal goals?
A big real estate decision should be part of life planning. Have you been considering moving out of the city to gain more space? Or maybe you're considering a condo instead of having a yard to maintain? Or it's an investment property and you're ready to liquidate some assets for other investment opportunities? Even if it's economically beneficial to sell, if this is your dream home for the next few years and fits your lifestyle and goals, it might be worthwhile waiting. Also keep in mind that when you sell, you'll also need to find a new place to live which might also be competitive depending on where and what you are looking for.
Still on the fence of whether to sell or not? Speak to your Realtor to discuss your individual goals and situation and answer the question "is now a good time to sell in Austin" for your personal circumstances. If selling is the right strategy for you, we'll be happy to discuss the selling process and put together a free comparative market analysis so you understand what sales price you can expect.
Use the below contact form to reach out to us and visit the seller's guide for more details on the selling steps.
