Hello everybody, Q1 2021 market update here including a condensed video format version! Let’s jump right in!
Q1 ended with historical lows in inventory for Austin with prices spiking 11% and ONLY about 1800 homes on the market for sale! We are in uncharted territory regarding negotiations and competition as a result. Buyers are waiving every Buyer right to be competitive. Cash, appraisal waivers, massive down payments if financing, and so on. In multiple offers, it’s 20% over list to win on average and active listings are down 74% year-over-year.
Tier-1 homes (priced right, no major flaws and wow factor) sold within days with multiple offers and average of 15-20% over list price. In some cases, higher.
Tier-2 properties (mostly a Tier-1 but with one flaw such as needing cosmetic updates) averaged 1 week on the market 10-15% over list price.
Tier-3 (major issues or work) sat on the market 30 days and sold at list or within 10% of list price.
The above stats are all major shifts in Q4 of 2020 and into Q1 2021.
Q2 has been just as aggressive. Averaged across all price bands/sectors,market supply is at an unfathomable .4 months. This is an unprecedented low inventory/ high appreciating environment. For context, a 6-month supply (enough inventory to meet the current rate of demand 6 months out) is an equilibrium market. At 6 months we would have 15k-16k homes available…as mentioned above at .4 months, we’re at 1800 homes!
$0-$500k We are at .2 months or less supply, down from 1 month at eo Q4. Up 15% ytd on pricing.
$500k-$1M We’re at a 1 month supply. Down also from Q4 by 1 month. I’m projecting 15% for the year.
$1m-$2m We’re at a 3 month supply. I’m projecting 15%+ appreciation for the year.
$2m+ – Strongest luxury market I’ve ever seen in Austin with the even higher numbers of folks from coastal markets. Literally zero supply. Will be up 15-20% by eoy.
Significant factors in the market (3:05):
The significant factors leading to the current market environment:
Company relocations or expansions – In Q1,52 companies relocated or announced expansions into Austin bringing 8k jobs and only 20% of those were led by the big boys ie Amazon or Tesla.
Supply Chain Issues – Builders had massive materials shortages and lumber costs spiraled out of control in 2020. As a result, home builders produced 20-30% of capacity. This led to major new construction shortage adding even more pressure to the resale market. Builders are on 100-200 people waitlists.
Looking Ahead (7:50):
I see 2021 ending with 20% appreciation. Supply chain issues will not resolve till eoy. In-migration numbers will be lower but still at least 55k people. We are on pace to add 40k jobs. All this points to ending at a paltry 1 month supply, hence the 20% appreciation.
Core sectors up to $5M will be extremely active in central and coveted areas such as Westlake. Within city limits (city limits but not suburbs) it’ll remain robustly active with high demand up to $2M. In the suburbs, up to $1.2M will be very healthy which is a new paradigm as neighborhoods hitting $1M+ in suburbs was a new benchmark in Q4 2020 and Q1 2021.
I hope this provided valuable insight as our goal is to provide irreplaceable value, always! For more regular updates between each quarter, sign up on ouremail list via our website and follow us on ourFacebook,LinkedIn, andInstagram pages. As always, we’re happy to discuss what’s happening in your sector of town so don’t hesitate to reach out.
We’re innovative and strategic real estate agents and advisors with an entrepreneurial spirit, who are well-versed in the Austin realty scene and residential real estate. We understand that the life of an entrepreneur can be very busy, and when it’s time to buy a house or purchase an investment property, you don’t have the time oversee every step of the process. We’ve built a formula for simplifying real estate and investing by utilizing our in-depth and up-to-date knowledge of the Austin real estate market, our skills as real estate investors and advisors and our local connections. We have a growing portfolio of homes for sale to help match you with the perfect property.