The first 6 months of 2021 have introduced incredible growth in the Austin housing market. Throughout Round Rock all the way to Austin, the area sees an 8.6% sales increase yearly. In 2021, in just 6 months, sales increased by 16.5%. Sales prices increased 55.7%, meaning more houses are being sold and at a higher cost. There are also fewer homes to sell as the market has been skyrocketing. There simply aren’t enough houses to go around.
This boom in the housing market has become the new normal for Austin over the past six months. While the increase in revenue is great for the economy, locals fear if this trend continues that Austinites will no longer be able to afford to stay. For those concerned they may be losing their chance to purchase a home in Austin, there is good news. The market is stabilizing.
Austin Housing Market Stabilizing
That’s right, there are indications that the housing market is beginning to stabilize. Feel free to breathe a sigh of relief. After months of soaring prices, sales, and applications, things are starting to simmer down in the central Austin area. Check out the housing market statistics from last year.
Austin Housing Market Statistics
As you can see, there are steep increases throughout January heading into July. However, by the end of July, we see significant stabilization, particularly in median sales price. If these trends continue, the possibility of returning to a steady market is conceivable again. Let’s break down the key indications that point to a stable housing market.
Indicators
So, how do we know the housing market is really headed for a balance? By using data collected from the average sales price of homes for sale in Austin and the number of units sold, we are able to determine there is a definite decrease in key factors. These indicators tell us we are headed in the direction of stabilization based on similar situations and critical turning points in the market highlighted below.
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Drop in offers on homes
The amount of offers on any given unit has dropped since the beginning of 2021. This shows interest is waning and may decrease even more in the coming months, especially heading into fall. As people return to the office and spend less time staring at the same four walls, it’s indicative that they will spend less time browsing the housing market.
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Social media buzz
Local realtors are turning to social media to attract new buyers once again. During the height of the housing market boom, there was no need to solicit buyers on social media, so there was a steep drop in posts. That’s beginning to change. When realtors turn to social media such as Facebook and Instagram, that means they haven’t gotten the offers they were expecting and are trying to fish for potential buyers elsewhere.
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Reduction in prices
You heard right, in some instances prices are dropping slightly. This indicates not enough buyers were willing to pay close to the asking price, causing the sellers and agents to agree to drop the listing price. However, it’s good to note that the drop in price is minimal and is likely to rise again in the future. Let’s be honest, Austin is always hot, especially in Summer. That isn’t likely to change even after a market boom.
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Buyers taking a break
Buyers are exhausted. They’re hitting their limit searching for property. There has been a decrease in searches for homes for sale in Austin due to this fatigue. With less interest in searching for homes, there are fewer offers, applications, and inquiries. While this might not stay consistent, it is an indicator that buyers are not focusing so much on property investment and might be taking time to do other things or rest.
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A decline in mortgage applications
Fewer people are even applying to for mortgages at this point, meaning a decrease in potential buyers. A decrease from a scorching hot market doesn’t mean there aren’t still buyers, it just means a listing won’t be snatched up the second it’s posted. This is good news for both buyers and sellers as it provides more wiggle room for negotiation.
What is Causing the Market Plateau?
Simply put, after a boom, the dust settles. During the 2020 pandemic, people found themselves trapped at home with expendable income. It became clear that being confined to their houses made people want their homes to be comfortable places to live and work. Thus, buyers started looking for more spacious homes in idyllic locations. Naturally, they turned to Austin.
Additionally, with new work from home movements, remote workers suddenly needed more space at home. Without the need to commute people were able to more further out into large homes, causing a major boom in the suburbs around town.
Now that the vaccine has rolled out and people are returning to work, school, and entertainment venues, there is far less time to spend roaming the housing market on Zillow. People are able to spend time with the people they love, enjoy their favorite pastimes, and even travel in some instances.
While the market in ATX will always be healthy, without all the extra time to spend searching for their dream home people are starting to return to normal. With this shift, the housing market is returning to normal as well. It seems unbelievable after the last 6 months, but the data doesn’t lie. It looks like we’re headed for smoother sailing and enjoyable investing once again.
Housing Market Statistics
Statistically, June is the hottest month for buying and selling houses. July will taper off as people go on vacation and August mirrors more of the same. In 2020, vacations didn’t happen and it completely threw off the timing of the market. The market was hot and it stayed that way for an extended period of time, which means the inventory was lower but the demand remained high.
The City of Austin alone experienced a 15.2% increase in June while active listings dropped by 46.8% setting a record. For such a small area this type of fluctuation is an indicator an area is a hot spot. In the first half of the year, the City of Austin home sales increased by 21.6%, and the median price increased 30.9%.
In Travis County, we saw new listings increase by 20% in June but active listings decreased by 50% making the market the hottest it’s been in many years. Year over year the home sales increased 19.1% and the median price rose 32.5%.
Comparable to Williamson County (the Austin metro area) new listings increased 25.5% in June while active listings were down 61.6%. In the first 6 months of 2021, home sales increased 11.4% year over year and the median price increased 42.1%.
When we look at the statistics we can see exactly how the housing market ended up in such an incredible boom. Thankfully, by looking at the same data, we can see that as people return to normal we can expect a healthy stable market to resurface.
To take a deeper dive into the housing market stats, check out our Austin Housing Market Statistics Dashboard.
What to do if You’re a Buyer
If you’re a buyer, congratulations! You’ve probably been through your fair share of disappointments in this frantic market. Now, instead of constantly trying to strike while the irons are hot, you can enjoy buying property again. Over the next few months, listings should last a bit longer and give you more time to explore the world of real estate.
While Austin area real estate has always been a hot commodity, there is some hope that opportunity will increase and the hustle and bustle will cool off. A healthy market is a good thing since it means you know your investment will gain interest as time goes on. Don’t be afraid of the market increasing, because it likely will. It’s still a good thing, it’s just a little easier when it’s slower.
If you are feeling burned by the heat of the market, allow Smart Austin Realty to assist you. We take special care to analyze the data, keep a close eye on the market, and keep you stress-free. We do all the heavy lifting for you so you can sit back and relax. We offer our clients the support they need and the skill to match them with their dream location. Contact us using the form at the bottom of the page and let us make your home buying process a breeze!
What to do if You’re a Seller
Also, congratulations! You’re still in the middle of the hottest market ever! It’s true. While we might see a plateau, we’re not seeing much of a decrease in median pricing. The demand for property in this area is still up 50% since last year, so you absolutely have a home people will love in a location they desperately want.
You may see a dip in offers or notice your property is on the market a little longer, but don’t panic. As the market continues to level off, that doesn’t mean interest in a sought-after location decreases. Austin has always been a sought-after location and nothing about that is due to change.
Fill out the form below to find out what your home is worth.
Unprecedented Times
Though the phrase “Unprecedented times” has been used a lot within the last couple of years, it applies more than ever when it comes to the housing market. There is no crystal ball that can tell us exactly what’s going to happen next, but thankfully as more data comes in, we can begin to trust that the market is returning to a stable state.
The effects of the pandemic were unexpected when it came to buying and selling real estate. Thankfully, we all stayed Texas strong and finished a great quarter together. While the market in Austin might always be pretty hot, it will be nice to not be scorching for a little while. Take advantage of this opportunity and contact Smart Austin Realty!
Need Help Buying or Selling?
Whether you’re looking to buy or sell, we’ve got the agents that know and love Austin just as much as you do! When it comes to real estate agents you can depend on, our firm has the knowledge and the skill to get you exactly what you’re looking for. Don’t wait! Contact us today using the form below!
