Austin remains the hottest housing market in the nation, with the vast majority of its homes selling way above their list price, new data published by Redfin shows.
All told, 74% of homes in Austin during April sold for above list price, the study found. Moreover, the metro area saw the fastest price growth in all of the U.S. during that month.
The housing market in Austin has been red-hot since the start of the year as technology workers flock to the area, Redfin said. This year, 1,440 homes in Austin have sold for between $100,000 and $299,000 above their asking price, and 72 sold for more than $300,000 above what the sellers had listed it for, Redfin’s data shows.
At the same point last year, just two homes in Austin had sold for more than $300,000 above the asking price.
Austin-based Redfin real estate agent John Dawson told HousingWire that he recently sold one Austin home for $715,000, though the owner had priced it at just $565,000, he said.
“We received about a dozen offers, which is actually a low number by today’s standards,” he added. “The winning buyer also waived the appraisal and financing contingencies and dropped off cupcakes that matched the interior colors of the house, which was a nice touch because the seller is an artist and the home is unique and colorful.”
Redfin reported that the median home sale price in Austin is now $465,000, up 42.3% from the same period one year ago. Net inflow into Austin, which refers to the number of people arriving versus those that are leaving, doubled in the last year too, the study found.
Austin real estate industry insiders say there aren’t nearly enough homes to go around for all of the interested buyers. Jay Garrett, who is a loan officer at Supreme Lending’s McClellan Branch in Austin, told HousingWire he sees an anywhere between 10 and 40 offers on homes in the city, no matter where they are located. As such, he said most winning bids are all-cash offers, which are preferable to sellers as it means there’s no chance of the home appraising too low like there is for a buyer who needs financing.
“If a seller has those multiple offers they are looking first at cash offers and may even consider a lower cash offer because they don’t have to worry about the property appraising for that price,” Garrett explained. “If they get a higher offer that has financing, then when the appraisal comes back, the buyer will need to renegotiate the sales price to be closer to appraised value.”
One reason for Austin’s red hot housing market is that the city has become a popular destination for tech industry workers that can now work by remote. Many of those people are now able to relocate from areas such as Silicon Valley and San Francisco, and they choose Austin for its lifestyle, climate and affordability, and the fact that many tech firms have smaller campuses in the area. Those people often have very deep pockets after selling their very expensive California homes, and it means Austin locals struggle to compete with them on the few homes for sale there are.
Redfin’s study shows that those who’re moving to Austin from another part of the U.S. have an average budget of $855,000, versus an average budget of just $650,000 for locals.
Although Austin is clearly a red-hot seller’s market, Dawson advises homeowners looking to cash in not to get too carried away. He said they should still be realistic when pricing their homes if they decide to sell.
“Some of the ‘comps’ aren’t truly comps,” Dawson said, explaining that it’s not always smart to make comparisons with other sales in the area.
“Some are cases of an extremely motivated buyer who was willing to pay way over asking price to secure the home they wanted,” he said. “For instance, I sold a home last week for $635,000. But if I were to list the next door neighbor’s house, assuming it is identical, I’d list it for around $590,000 because that’s right around here most of the offers came in.”