2021 Q2 Market Update

September 25, 2021 – 5 Minute Read


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Hello everybody,

Q2 2021 market update here including a condensed video format version!  Let’s jump right in!

Q2 2021 ended with continued historical lows in inventory for Austin with prices jumping another 6% and ONLY about 2000 homes on the market for sale! We continued to be in uncharted territory regarding negotiations and competition as a result. Buyers had to waive most contingencies to be competitive. Cash, appraisal waivers, massive down payments if financing, and so on won the day. In multiple offers, 20% over list to win continued. Active listings are down 56% year-over-year. Worthy of note however, May and June saw first signs of prices stabilizing and the active listings down yoy of 56% is also an improvement compared to 78% at eo Q1.

  • 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 and 10% over list price.
  • Tier-3 (major issues or work) sat on the market 60 days and sold 5-10% below list price.


The start of Q3 is starting to see a shift to stabilization in our opinion. While current supply is still at an extreme low of .6 months, prices in May and June saw the lowest increases since August 2020. 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, the Austin market would have 15k-16k homes available…so at .6 months and 2,000 homes it’s incredibly low inventory. However the stabilization in May and June points to the last round of major price resets and in line with what we’ve been preaching most of the year (our version was eo 2020).

  • $0-$500k We are at .5 months supply, slightly up from Q1.
  • $500k-$1M We’re at a 2 month supply, also slightly up from Q1
  • $1m-$2m We’re at a 3 month supply. I’m projecting
  • $2m+ – Strongest luxury market I’ve ever seen in Austin with even higher numbers of folks from coastal markets. Literally zero supply.

For Sellers, we are past the frothiness and likely at the peak of maximizing premiums. However, with such low inventory it’s still a fantastic time to sell. Additionally, finding your replacement home locally will likely start being solvable. I strongly recommend selling now vs holding.

For Buyers, this means in the next month the intensity of terms will all favor sellers as well as above list will start easing in suburban sectors (they already are) but in central and higher-end areas less so. Additionally, premium over list on Tier 1 properties likely drop to 10-15% vs 15-20% over list.

Significant factors in the market:

The significant factors leading to the current market environment:

  • Company relocations or expansions – In Q2, 60 companies relocated or announced expansions into Austin bringing almost 6k jobs. NOTE – A very small percentage were the big players ie Apple, Tesla, Amazon
  • In-migration – We have averaged 55k people move to Austin, #1 in population growth for the last 8 years. 2021 is on pace for 65k, following 70K people moving here in 2021! Thats intense pressure on housing
  • Supply Chain Issues – Home builders produced 20-30% of capacity in 2020 due to major supply chain issues. Holding mostly the same in 2021, it’s finally showing some reprieve in the last 60 days.
  • Mortgage Applications – First signs of slowing down since Covid and paralleling what seems to be the first signs of price stabilization.

Looking Ahead:

We still see another 7%ish in appreciation In Q3 & Q4 given the dynamics above and 15-20% appreciation for 2021. Supply chain issues while improving likely don’t resolve till 2022. In-migration numbers while slightly lower will still bring at least 55k people this year. We are on pace to add 35k jobs. All this points to ending at a still very low 2-3 month supply by eoy.

Core sectors up to $5M will be extremely active in central and covered 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 $1M will remain healthy yet premiums over list will level off to lower percentages than closer-in .

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 our email list via our website and follow us on our Facebook, LinkedIn, and Instagram pages. As always, we’re happy to discuss what’s happening in your sector of town so don’t hesitate to reach out.