While this shift seems to be seasonal, we are seeing other factors that indicate we are headed back to a more balanced real estate market.
The number of home sales for July is down 7.5% from June and down 9.5% from July of last year. This downward shift is something we see this time of year, typically due to school starting. Buyer demand is still strong however. Our year-to-date home sales for 2021 is up 11.5% compared to last year.
We continue to see a stabilization in home prices. The median home price in Austin right now is $480k which is up 37% from July of last year. Compared to last month, however, the shift was every so slight, from $482k to $480k. Historically, prices soften a bit in the Fall and Winter.
We are finally seeing a significant shift in the number of homes coming on the market - in fact, a 78% increase from June to July. More homes to choose from has lessened the buyer competition and helped to stabilize prices.
Even with the increase in listings, it is still a strong sellers market with less than one months of inventory. In other words, if we continue to sell homes at the same pace as we have been, it will take less than one month to sell everything currently on the market. A 6 month supply of homes is considered a balance ("normal") real estate market... which we actually haven't seen in the past 5 years.
If you or someone you know is in the market to buy or sell a home in Austin Texas, call me! I would love the opportunity to help.
Thanks again to David Tandy, CEO of Texas National Title for a great Economic Update highlighting the conditions, statistics, and projections of our Austin Real Estate Market. This is a follow up from a previous conversation I had with him last month that you can read about here: Are We Set For a Market Crash?
If Austin's population is on the rise, where are all of the workers? People don't want to work due to COVID and Unemployment Payments.
AUSTIN has the Top 3 healthiest job markets in the US.
Which Employers are Expanding or Relocating to Austin?
In the early 2000's, the US was building more homes than the population increase. This was scaled back during the recession and we were not building enough homes. This is not getting adjusted, but in Austin that variance is greater and we have had a 15 year shortfall. We are only now, this year, starting to build enough homes.
Core inflation has jumped to 4.5% where 2% is the goal. (Core Inflation does not include food or gas which is typically volatile). The Core Inflation jump has been caused by shortages of supply and supply chain issues which is temporary and should correct itself. If the Fed decides inflation is a big deal, we will start to see mortgage rate rise.
We are not expecting to see home prices drop. This is not a bubble that will burst because we don't have loans being made that people can't afford. Home prices should not exceed inflation so we should see a slow down. Austin is still considered affordable because personal income is high. However, that could change as income hasn't increased at the same rate as home prices.
07/09/2021 - I received a text message from a client concerned about the economy and how it could effect the sale of their home that we are putting on the market next week. Specifically, they are concerned about interest rates dropping, the market will shift in a decline and could crash or cause an extreme correction.
This concern is something I addressed in a recent post that you can read here: Is This a Bubble? but I thought it was worth exploring again.
I shared my clients concern with David Tandy, President of Texas National Title. He was on vacation, but I love that he took the time to respond so I could help my clients feel comfortable and confident in their decision to sell their home.
I’m on vacation so I can’t write much. Here are important points to highlight.
1) Low interest rates help offset the increase in home prices. Ultimately the Fed wants to keep rates low for many reasons which helps home buyers.
2) The economy is driven by having a healthy job market. And there has never been a hotter job market. Google “Austin chamber of commerce job report” and look at the most recent report. It shows there are almost 90,000 job postings per month. Far and away the highest it’s ever been. The economy is very hot and there are not enough employees with the needed skills.
3) There is no danger of a bubble bursting. Mortgages have high underwriting standards. Loans have not been made to people who cannot afford them. Many sales have been for cash and many people have had to put down large down payments. People do not walk away from mortgages when they have large amounts of equity.
4) Forbearance is not an issue. There are only about 2 million loans still in forbearance. And all of those have equity.
5) Inventory will remain an issue for the next 6 years at least. It will take at least that long for builders to catch up to our population growth.
6) Austin is in really good shape for jobs. Google, Apple, Tesla have yet to really start the hiring.
I’ll send more when I get back on the 14th
In addition to David's comments, Austin is currently ranked as the #3 Best City to Live in the US in 2020 and 2021 AND Austin has been named THE #1 CITY to Start a Business in 2020 for the third consecutive year! There is not a better place to be than Austin Texas!
If you or someone you know is in that market to buy or sell in the Austin area, I would love the opportunity to help!
NO! The reasons both local and national economists do not believe a crash is likely, is because:
There are no current economic indicators pointing to a crash anytime soon because of all the reason we aren't in a bubble.
I hate to say that it depends, but that's the answer... Inventory is low and buyer demand is high which is causing multiple offers on many homes. While we are seeing a slow down from the frenzy we experienced at that beginning of the year, demand is still outpacing supply so buyers should expect to compete with multiple offers. In the Austin market, every neighborhood and price point is behaving a little differently.
This market can seem difficult to navigate to the average consumer because it is fast paced and transactions are becoming increasingly complex. That is why it is so important to work with a REALTOR who understands the market and can help you find a home that fits your needs and your budget. If you are thinking of buying a home, I'd love to chat with you about your specific situation.
While multiple offers are still common, homes are receiving fewer offers than we've seen over the past few months. Additionally, we are seeing the number of new listings outpace the number of homes going under contract and surprisingly, mortgage applications are the lowest we've seen since February 2020. Lastly, according to a recent survey of local real estate agents, nearly 62% feel that the market is normalizing or cooling down.
Despite the "slow" down, what we are seeing is shift from an "Ultra Strong" Sellers Market to a "Strong" Sellers Market. Home prices are still going up and buyer demand is still strong, but we are seeing a stabilizing of the market. It is still a great time to buy and a great time to be a seller.
If you are curious about what is happening in your neighborhood or have been thinking about buying or selling real estate in the Austin area, call me! I'd love the opportunity to help you!
Curious about how much homes have appreciated in your zip code? Check out this Heat Map for the Median Sales Price Appreciation from March 2020 to March 2021.
And Oh, by the way, I'm never too busy for your referrals!
Contact Kevin Wieser – Membership Director
Telephone (714) 409-8126
FOR IMMEDIATE RELEASE
January 5, 2021 – Announcing the selection of Lori Wakefield, Keller Williams Realty, Austin Texas among America’s Top 100 Real Estate Agents® for 2020. Selection to America’s Top 100 Real Estate Agents® is by invitation only and is reserved to identify the nation’s most esteemed and skilled Real Estate Agents and Brokers with a history of routinely selling homes above market value.
Members are selected through a comprehensive multi-phase selection process involving proprietary algorithms using advanced data analytics to assess a broad array of criteria and data for each candidate, including (but not limited to) the Real Estate Professional's total yearly sales volume, notable above market value sales, luxury home sales, efficiency rating for closing sales, lifetime professional experience, client satisfaction ratings, and other notable recognitions, among many other proprietary factors. Based on these criteria, a measure/rating for each Real Estate Professional is established indicating their relative effectiveness in closing high-value sales above market value in comparison to other Real Estate Professionals in their region. Accordingly, the most efficient and effective Real Estate Professionals among the community are then identified for selection among America’s Top 100 Real Estate Agents®.
Only the Top 100 qualifying Real Estate Professionals in each region will receive this honor and be selected for membership among America’s Top 100 Real Estate Agents®. With these extremely high standards for selection, less than one percent (1%) of active Real Estate Professionals in the United States will receive this honor — truly the most exclusive and elite level of Real Estate Agents and Brokers in the community.
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If you would like more information about America’s Top 100 Real Estate Agents® or the selection process, please visit our website at www.Top100RealEstateAgents.com or contact Kevin Wieser – Membership Director at Membership@Top100RealEstateAgents.com.