Unlike so many industries, the Austin real estate market remained strong throughout the COVID-19 pandemic. Health concerns and stay-at-home orders led to fewer fewer sellers willing to list their properties or allow strangers to enter their homes during a pandemic, although the demand has remained fierce. Thanks to the rollout of vaccines and a decrease in the number of positive COVID cases, hopefully we will see more listings come on the market. In fact, according to a recently published survey of experts, Austin is predicted to be the nation’s hottest housing market in 2021.
Austin had long been regarded as one of the most dynamic real estate markets in the country. The pandemic slowed down the number of properties bought and sold in Austin because of the supply shortage. Austin Board of Realtors (ABOR) released a market report for the month of January, which showed in the Austin Metropolitan Statistical Area, home sales increased 19% since December. Across the Austin area, ABOR reports homes spent an average of 33 days on the market, which is 33 days less than the average in December.
New homes also continued to be built. As builders scrambled to keep up with demand, housing construction in Central Texas reached record levels in 2020. Builders have waiting lists for properties and many are initiating a bidding process to secure one of their homes. Some have waiting list of hundreds.
Looking ahead, Austin is poised to continue its momentum and have a record-breaking year in 2021.
Recently, a large panel of economists, investment strategists and real estate experts were asked for their predictions about the U.S. housing market. An overwhelming 84% of those surveyed said Austin values would out-perform the national average. Phoenix came in second with 69%, followed by Nashville (67%), Tampa (60%), and Denver (56%).
What’s Driving the Housing Growth in Austin?
There are a number of factors, among them the number of companies relocating to Austin and the jobs they are bringing, combined with the incredibly low interest rates and the increased demand for living space. Companies such as Apple, Samsung, Oracle and Tesla are expanding and hiring thousands. A surge of millennials buying their first homes will also drive a tremendous demand from buyers in the market. Not to mention, Austin’s prized culture is key to attracting more residents.
While some Austinites might disagree when the local housing market is referred to as “affordable,” experts assert that the area is vastly more affordable than expensive communities on the East and West coasts.
According to the report, expensive coastal cities are predicted to fall short of the national average — 82% of respondents said New York would see sub-par growth in 2021. San Francisco (77%) and Los Angeles (67%) round out the bottom of the 20-city list.
Forced to work from home during the pandemic, many people suddenly realized they had options when it came to where they can live and work. In doing their research, they found their dollar goes a lot further in the South, the climate is better, and Austin has a lot to offer, from the food scene to outdoor activities, and live music. These factors are going to continue to draw people to the Austin real estate market throughout 2021.
An increase in demand, means a decrease in supply. Individuals and families interested in buying in Austin will have to be proactive when it comes to successfully buying in such a highly competitive market. Most properties in Austin and the surrounding areas are selling within a couple of days, with 10-95 offers on a majority of them. Cash buyers usually win the bidding wars, but if financing is necessary, getting pre-approved for a mortgage and working with a trusted agent are a couple of tips shoppers can use to stay ahead of the competition. Also, Appraisal Waivers, buyers paying for title policies and surveys, shortening option periods and raising option fees are all necessary in order to attempt to win a bidding war.
For Sellers in the Austin Housing Market
As a homeowner, it’s a good time to sell as home values continue to appreciate as the inventory dwindles in the face of ever-growing demand. According to the 2020 Central Texas Housing Market Report, Median Sales Price was up 19% to $365,000 in the Austin Round Rock MSA. Within city limits, Austin saw a 19% rise to $455,000. In some areas of Austin, it’s not unusual for homes to sell 20-30% or more above asking price. Given the current supply-and-demand situation in the area, it’s hard to imagine home prices leveling off or dropping anytime soon.
Fewer homes on the market also means increased visibility for your property.
Whether you’re buying or selling a home in Austin, partnering with an experienced and trusted real estate team ensures your real estate transaction goes as smoothly as possible. Our agents are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, best locations, and interest rates. We can guide you through winning a successful bid in this highly competitive area. Feel free to contact us to learn more about how we can be your real estate advocate.