January 2021 Austin Market Update: What’s Happening Out There?

Posted Jan 10, 2021
I hope you’re doing well and that you had a wonderful holiday season with friends and family! We certainly did, but there was one big change this year: There was absolutely no seasonal market slowdown.

Newsletter Highlights:

  • Home sellers are behaving normally and haven’t yet started listing their homes yet.
  • Home buyers are behaving differently and didn’t sit out over the holidays. New home buyers are entering the market much earlier than normal.
  • This has caused a severe inventory shortage and rapid price appreciation.
  • We expect appreciation to moderate this spring/summer, but prices will not go down.
Historically, like clockwork, the market has started slowing down in July and has consistently slowed down through the end of the year. Buyers start to “wake up” and enter the market in Feb/Mar, and our busy season runs until July, when it starts all over again.
line graph for austin real estate pending properties by month in 2021
This year, buyers didn’t behave (and aren’t behaving) normally. They stayed in the market and kept buying houses. As agents, we’ve heard recent stories of 90+ offers on relatively “regular” houses that historically would have taken a few weeks to sell or have had a few offers at best. These anecdotes are interesting (and somewhat frightening), but we don’t generally make decisions based on anecdotal evidence.
Earlier this week, we sent a survey to the 4000 highest producing agents in Austin and asked “What do you expect when you make offers in different price ranges?” The full set of results are segmented and can be found here. The short of it is that agent expectations are consistent with the market data. Agents expect a LOT of offers in every price range and they expect properties to always go over list, with varying degrees in varying price ranges.

What is happening in the Austin real estate market, and more importantly, what do we think will happen?

Inventory is historically low, but it’s very important to put inventory in perspective. Real estate inventory is a function of supply (units on the market) and demand (number of sales per month or number of pendings.) Low inventory can be caused by increased demand or decrease in supply. When we look at the most recent reliable market statistics, we see that supply did not decrease in any meaningful way. YTD in November showed only a ~2% drop in new listings. However, demand is up in a huge way.
Buyers stayed in the market over the holidays and new buyers have entered the market much earlier than normal. Sellers, however, are behaving as they always have – they simply haven’t listed yet.
line graph for total number of real estate listings and new real estate listings by month in 2021
Sellers historically hit the market in March and new sellers enter the market through July. Buyers are early to the party and the sellers haven’t yet brought food/drinks!

What will happen in the Austin real estate market in 2021?

While we don’t have a crystal ball, it makes sense that the insane feeding frenzy at the empty buffet table will likely not continue at its current pace. Pricing will likely not decrease, but the incredibly high appreciation we’re currently seeing will likely be short lived. We will likely see the same level of new listings hit the market in 2021 that we did in 2020. There certainly is new/more buyer demand now, but the seasonal increase in inventory will relieve the environment in a meaningful way. While we don’t predict that multiple offers will go away, we do think that it will return to the 2020 levels of 5+ offers per listing, rather than 25+.

What should I do if I’m a buyer or a seller in Austin, Texas?

If you’re a seller:

Put the property on the market at your own pace and on your own terms. If you’re ready now, go ahead and list now. If you need some time, take some time. We don’t expect pricing to change (except to go up), so time is on your side.

If you’re a buyer:

Hang in there! It certainly makes sense to make offers now, if you understand that the list price is a suggestion, and you’ll need to offer over list. Remember, we don’t expect pricing to decrease in the spring – only that prices won’t appreciate at this extreme pace. On our side, we’re monitoring the market extremely closely and we will be able to notify you if/when there’s a market shift (and we need to offer less over list to win deals.)
We knew that there would be challenges in the real estate market post-COVID. We did not expect that the challenges would be from a heated market. We are absolutely here for any support you might need, so please don’t hesitate to reach out!!!

1600+ Client reviews!

Lesley M.

Craig is truly great at what he does. We first worked with him as our buyer’s agent when moving to the Austin area. This time around, we chose him to be our listing agent when we we relocating away from the area and we are glad we did. Craig was always available for followup regarding processes and questions we had-from listing all the way to closing day. He always made sure to keep us up to date with any information we needed. Craig has a great understanding of the market and is straightforward & honest, which we valued. I couldn’t sing his praises more.

Jody Price

Ann Nye is wonderful to work with. We started with reviewing the many homes Ann found on-line for us. She spent all day taking us to properties and then ended up with us looking at new builds. She stuck with us from the start of negotiations to the end with the final walk through. Her extra set of eyes was great cuz she caught things we missed. All this was done during COVID times and with us being from out of state she was very gracious! I highly recommend Ann Nye!

Srihari Padmanabhan

Tyson Hombroek from Bramlett residential did a fantastic job and I had a great home buying experience. He understood my requirements and set up searches and gave me unbiased feedback on the properties , like how fiduciary does. He also understood that time is of the essence when it comes to finding property information such as surveys, plat map etc from the seller agent and writing offers. He met with me two times and even though I am purchasing the property from out of state I felt very comfortable about the area by leaning on his expertise. Overall very professional and nice to work with.

Chad Ryder

As a first time homebuyer, Lauren Yoder was the perfect agent to work with. She was always available to jump on a call and answer any questions I had about the process. Even though I was buying in a tough market, I never felt pressured to make offers I didn’t feel comfortable with. Lauren’s curated searches made it incredibly easy to find great properties, and her knowledge of things to look for, and avoid, in a house was incredibly helpful. Once under contract, Lauren helped make the closing process as stress-free as possible. She was always on top of the communication between myself and any party that needed to be involved. I am very grateful that Lauren was recommended to me, and I will definitely look to work with her in the future if I ever need to buy or sell in the area!

Cynthia Sumner

Where do I start?! I asked family for a recommendation and he couldn’t have hit the mark any better. Vicki Duran was responsive and on point from the first inquiry. I am one of those who likes to be conscientious of most things. So I reached out to her months before we were scheduled to fly in. She kept in touch during the waiting period and was ready to hit the “road” when we got into town. She had preowned and new builds ready, but in the climate of timing when we wanted to see homes… preowned were dropping and being picked up before you had a chance to view. So we went after new builds, she tirelessly called sales offices and showed us different communities. Vicki was taking notes somewhere because after the first community shown she knew what we wanted and didn’t want and didn’t waste time with the nots. We headed back “home” and two days later we were sending our earnest money to her. She did all the leg work for us. Every in person and zoom meeting she was there. She did the walk through with us and helped pick out areas that needed to be fixed. Vicki just knows the job, what we as new buyers should look for and what is expected of our new home. She is amazing. She was there from start to keys. I’m so grateful for all the time she spent on us. My hubby does NOT like change and she was good with him, gave him the space he needed while giving me the attention I needed. She can definitely read a room and is not afraid to speak up and advocate for her clients.

Bob and Laura Petix

We worked with agent Kristin Wellborn. This was our fifth house bought/sold over the past 28 years and Kristin is by far the best realtor we have ever worked with (not even close). In this case, we were buyers. Kristin possesses incredible knowledge about the Austin area. We resided in another state (1,400 miles away) and had to purchase our house without being able to visit in person. We completely relied on her understanding of the various towns and neighborhoods. She sent us many, many videos and frank assessments about the myriad properties for sale that she visited on our behalf. Kristin respected our wishes concerning the purchase process (no bidding wars!) and in the end negotiated a great deal on our behalf, below both list and the lender-appraised value. Our offer to the seller was based on well-researched comparables and was immediately accepted. (BTW: we were not “high-end” buyers; our purchase price was about average for Austin. Rest assured: Kristin will work tirelessly on your behalf regardless of your price level.) She kept in constant contact with us, seven days a week. Honestly, it would be impossible to find a more dedicated agent.

Leila Hanna

We have had the privilege of working with Eric Engberg ( with Eric Bramlett Real Estate) on more than one occasion and he is outstanding. We first met him when we began to relocate to the austin area from Seattle. It was a scary time, but he was so patient and informative ( what he does not know, he will make sure to find out!) he treated us more like family than clients and got us a great deal on a fantastic home that suited all of our needs. When it was time to get a bigger home that we wanted to build, he was right there for us and even helped us navigate while we switched builders early in the process. Most recently in 2020, we chose to sell our first home in Avery ranch and Eric got us the best price in record time just as Covid hit! He’s a miracle worker and a lifelong friend and realtor!

Jerod Honrath

We worked with Craig McGuire and he was phenomenal from start to finish with regards to selling our home. He was detailed and very thorough in how he navigated us through the selling process. I would most certainly recommend him to anyone that is looking to buy or sell their home and in fact we are using his vast expertise as well to build new future home over the next year.

Analisa Honrath

Every aspect of working with Craig McGuire and his team was positive. Highly recommend!

Ankit Paul

Vicki Duran is one of the best realtors out there. She is very knowledgeable, is always well prepared and thorough in her approach. She cares a lot about her clients and infact saved us $$ by helping us bid to the correct amount instead of over bidding. She is responsive and has great contacts to help us close the home. We were lucky to work with Vicki

Natasha Delatorre

Eric Engberg went above and beyond for me as my Realtor through the process of selling my home. He walked me through each step and he was always available to answer any questions, make suggestions and to give his professional opinion. Eric is very professional, thorough and knowledgeable in every aspect of Real Estate. I had a full price offer within 5 days and a backup offer shortly after that. I will most definitely use him as my Realtor in the search and purchase of my new home and I highly recommend him.

Erika G.

My boyfriend and I are first-time homebuyers, and had the pleasure of working with Tyson Hombroek! Tyson was fantastic – super helpful, knowledgeable, and exceptionally responsive. He walked us through the home-buying process step-by-step and always had great advice regarding red flags in homes and with builders. He really helped us feel confident every step of the way, which is saying a lot in this crazy market! We really couldn’t have hoped to work with a better agent, and would strongly recommend him to any other buyers.