AUSTIN (KXAN) — The Austin housing market is one of the hottest in the country, and according to a report from online real estate brokerage Redfin, homes are selling for the highest premium out of 47 metro areas it analyzed in the past month.
According to the report, homes are selling for 7% over asking price. An average Austin home listed at $400,000 sold for $428,000 from Feb. 14 to March 14. A year ago, homes in Austin were selling nearly 1% below asking price, the report says.
It’s the largest year-over-year gain in any metro area Redfin looked at.
“Nearly every offer my clients make faces competition, and most homes are going for more than 20% over asking price,” said Austin-area Redfin agent April Miller.
She said she recently helped a client with an offer for a three-bedroom, two-bathroom home listed at $515,000 and pulled out all the stops. The offer was for $100,000 over the asking price, and they waived appraisal and financing contingencies, yet still came in third out of 38 offers.
“Every single potential buyer offered more than the asking price, and four of the offers were $100,000 or more over,” she said.
Miller says she’s lost maybe one or two bids in her entire career. Now, she’s losing more than ever.
“To see on my dashboard that 56 offers had been written and lost all due to multiple offer situations is unheard of in my career,” Miller said.
That includes client Jennifer Gamon, who was passing through Austin in an RV with her family last fall.
“We very genuinely fell in love,” she said.
She and her husband decided this is where they wanted to raise their kids.
“Literally everywhere you go, everyone is so nice and wanting to help,” she said.
While the decision was quick, the process wasn’t — Gamon put in nearly a dozen different offers. All rejected.
“To the point of tears,” Gamon said.
The family moved from California.
Redfin said nearly three times more people from outside Austin looked to move to town than the year before based on site’s search results, and a lot of those people have a lot of buying power.
The average person looking to move to Austin has a $852,500 home-buying budget, Redfin’s report says, and that’s 32% more than current Austin residents looking to buy a home.
Gamon’s budget was a little less than that, and she wasn’t able to outbid others. She says she got lucky. They found a seller who had an urgent timeline.
“Everyday we literally wake up, look out our window and say, ‘How did this happen? How did we get so lucky?'” Gamon said.
That’s the kind of luck Jon Kniss is hoping to catch. He wants to go from renting to buying a home in his neighborhood and is leaving this note on neighbors’ doorsteps:
“Hope that somebody is going to want to make a quick and easy sale, or you know, the timeline that they need or the other conditions that they may need, we can meet that,” Kniss said.
He’s hoping to skip the competition altogether and settle into a home before his daughter starts school again in the fall.
“I have a few friends here, and I don’t want to start over and have to make new friends,” said Jon’s daughter, Alexa.
Miller isn’t surprised by the tactic. She says they’re hearing of some people knocking on doors and offering homeowners money for a building not even on the market.
“This morning, one of the listing agents showed a video of buyers who sent it to sellers. We’re seeing all kinds of out of the box things,” she said.
Gamon admitted while she was excited to finally close on a home, she was a bit nervous about anti-Californian hostility.
“We’re here to be helping members of society that we already think is beautiful; we don’t want to change anything,” she said.
But Gamon says so far, the southern hospitality has lived up to her first encounter with it, and she’s looking forward to growing her business here and hiring locally.
Who’s being left out?
So, who’s getting burned the most by this buying frenzy?
Miller says she thinks it’s first-time homebuyers and military veterans.
“I’ve seen a lot of mine, personally that have backed off and said, ‘We’re going to wait,’ because it’s just so difficult to compete,” she said.
Miller hopes more supply on the horizon will help get them into homes.
At the national level, Redfin says markets in San Jose, Seattle, San Francisco and Sacramento are all seeing homes go for well-over asking prices. San Jose is second behind Austin with a 5.5% premium, followed by Seattle (5.3%), San Francisco (5%) and Sacramento (2.7%) in the same timeframe.
On the other side of that, homes in Miami are selling for 4% below asking prices, Redfin says. New Orleans homes are selling for 2.5% below asking, followed by Pittsburgh (25), Orlando (1.7%) and Chicago (1.6%).
Outside investors buying home, driving up prices
In January, KXAN’s Nabil Remadna reported while mortgage rates are low, buyers need to be prepared to spend a lot of money.
He talked with Austin realtor Zac Barger, and Barger said the median home price at the time, $365,000, was up 19% year-over-year. He described the rise as “astronomical,” especially with the extremely low inventory in the market.
Barger said his clients have to offer $10,000 to $20,000 over asking price “just to have a shot.”
With large corporations setting up shop in Austin, including Google and Tesla, that will affect the market as well. Austin City Council member Greg Casar says he’d like to see land development rules change to allow more homes in the city.
“We need to change our land development rules, so there can be more houses inside the city, so that when growth pours in we aren’t pushing so many people out,” he said. “The current path has blocked younger folks out from their ability to buy a house in Austin.”
Austin-Round Rock home prices jump almost 24%
According to the Austin Board of Realtors, home prices in the Austin-Round Rock area jumped 23.9% in January. The board said 2,523 homes were sold in the area, and despite 2,878 new listings in January — an 11% decline from 2020 — active listings dropped 73.9% to only 1,369 properties across the region.
Housing inventory fell 1.3 months to a record-low 0.4 months of inventory as homes spent an average of 33 days on the market.