Real Estate Reflections: Market madness or a real estate rebound?

Last year wasn’t the best for Austin real estate, but if we look at how the market is moving since January 2024 to today, things are definitely looking up.  When I want to get a baseline on the market I like to look at sales price to list price ratios, days on market, and where median home prices are trending.  

As of April 1, 2024, those numbers are all moving in a positive direction.  Let's take a closer look.

It's taking homes less time to sell

As a starting point, homes are spending less time for sale on the market.  At the end of 2023 homes were taking 49 days to sell. Today that number has dropped to 24 days on market.  This is usually a pretty good leading indicator of market momentum. Of course, different property types will perform in different ways so don’t get too attached to these numbers.

Sellers are discounting their list price less & multiple offers are back

I also like to keep an eye on how far below or over list price homes are selling for.  This helps me prepare for negotiations and make pricing recommendations for my sellers.  The chart below is helpful.  Take a look at the blue line which indicates the closed price compared to the original price. In October and November of 2023 (typically a slower seasonal time for our market), sellers were discounting their original list price by 5%.  That number looks better in March 2024, with sellers coming off the original list price by 3%.  We expect to see some seasonal improvement in the Spring, but this still feels like a positive sign.

We are even seeing multiple offers again, but thankfully not at the bonkers pandemic levels.  Consider that since January 1, 2024, 1,093 homes have sold publicly in Austin.  Of those 17.29% (189 homes) sold in the first week and another 12.17% (133 homes) sold in the first five days when we expect most multiple offers to occur.  Most of these homes got anywhere from full price to 5% over the asking price.   

And I’m not just talking numbers; I’m talking actual experiences too.  Three of the homes we’ve listed for sale in 2024 received multiple offers.  On the buy side one of my clients lost out in a multiple offer situation because they hadn’t calibrated to this new normal and were not quite ready to be aggressive.   Be prepared to encounter multiple offers for nicely finished homes.

Prices aren’t too far off Austin’s peak

Next, let’s take a look at pricing.  The median price for a single-family home in Austin has climbed $100K just since the beginning of the year.  The median home price was $557,500 in January, and now it is $657,000.    

But how does that compare to the peak of the market we saw in April 2022?  We are still below peak pricing, but not by much.  As the market sits now, we are only $73K below peak pricing.  The chart below shows us the pricing trajectory.   If you look closely, it’s almost as if the real estate gods are smiling at us.

So where does that leave you?

The market is in recovery mode and picking up pace, but I wouldn’t get too comfortable just yet.  We are in an election year, and election years are wonky.

During every other election year over my 25+ year career, the Austin market has significantly  slowed down through the summer while everyone holds their breath and waits to see what happens with the election.  The market then usually blasts off after the election in November.  I think this presidential cycle is likely to be louder and have a greater concussive effect. 

Knowing this, is it a good or bad time to make a move? As we like to say, there’s no one-size-fits-all answer to real estate. These questions are deeply personal, but consider this.

 If you are buying a home in Austin:   If you are a buyer and the timing is right for you, do it.  Interest rates are still not great, and they may never be again.  (Remember 3% interest rates are NOT the historic norm.)  Plus, inventory is rising so you have more choices and better properties to choose from. 

On the other hand, in the spring season prices are seasonally 6 – 8% higher than other times of the year.  You might do better waiting until later in the year which goes back to my point about the election.  The late summer and early fall may be a good time to buy with lower prices and less competition, but the trade off is that home inventory is likely to retract during the election cycle.  Weigh your options carefully.

 If you are selling a home in Austin:    Timing matters.  Please sell before the summer, before everyone leaves town for vacation, and before everyone turns their eyes to the election.  If you are intent on selling, take advantage of that 6-8% seasonal price upswing and the greater demand while you can. 

Also, buyers don’t want a project.  Buyers want a pretty home that is updated, on-trend, and move-in ready.  The homes that meet those criteria are the ones that are selling quickly and for over asking price.  It is crucial to have your home prepared, staged, and ready to go.  If that’s too much to manage, then you’ll need to price your house accordingly.  Remember, if you need money to help cover the cost of getting your home ready to go on the market, we have a tool that can help without any initial out-of-pocket cost to you; just pay the money back out of our proceeds at closing. 

One last thing, our pre-inspection plan has paid our sellers dividends time and time again.  We highly recommend it, but you have to know how to carry that sword. Reach out if you want to know more.

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April 2024