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!!!

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Kendall W.

My fiancé and I had the pleasure of working with Kristin from Bramlett Residential and had a great experience. Kristin made sure to keep us informed of anything that was going on through text, phone calls, and e-mails. Her experience with lenders, the title company, and of Austin as a whole made for a seamless experience from beginning to close. I already have recommended her to friends.

Aleksandra S.

This was our first time selling a home, and Ashley made it a breeze! We had complete trust in her understanding of the market and the appropriate terms/ contingencies that were necessary. We loved how responsive she was to all of our questions, and she and her team are absolute pros. Would highly recommend working with Ashley if you have the opportunity too!

Susan J.

Ashley Vavasour did an awesome job helping us with the sale of our home! She kept us informed during every step of the process and was always available to answer our questions or hold our hand. She even retrieved my favorite spatulas that I had left behind! I would definitely recommend her to anyone looking to list their house.

Brandon K.

Tara McGuire represented us in purchasing our home. To say she was amazing would be an understatement: Tara walked us through every step of the process (this was our first purchase), and provided detailed answers to every question we had, no matter how simple or complex. She helped save money where we could, pointed out things we wouldn’t have otherwise noticed, and was extremely pleasant to work with.

Janet R.

Philip Myers was great to work with and very knowledgeable of the area as well as what to look for that my wife and I were not as versed on when looking at houses, especuially since we were moving from out of state. He was exactly what we needed from a Real Estate Agent.

Brett H.

Philip Myers was great to work with and very knowledgeable of the area as well as what to look for that my wife and I were not as versed on when looking at houses, especuially since we were moving from out of state. He was exactly what we needed from a Real Estate Agent.

Lindsey K.

My Fiance and I worked with Lauren Yoder and we cannot recommend her enough!! We worked with Lauren to buy a house during the wild COVID market, when home buying was so unpredictable. Lauren is super organized and patient, which was very helpful for us as we were first time homebuyers. She was quick to respond, spent time answering all our questions (and we have a LOT of questions), quickly picked up on our style, and is very connected within the community. She is incredibly knowledgeable about the entire home buying process and has a list of trusted contractors… I’m talking Lenders, Inspectors, Handymen, Landscapers, Builders, etc., all of whom were also great to work with. I really appreciated was her willingness to talk through all the anxiety and fears that come with home buying. Lauren genuinely worked so hard to help us find the right home. I have already recommended her to friends and will continue to recommend her! You will not regret working with her and will feel like you are in great hands!

Katherine S.

Shaun was my agent and he was a pleasure to work with.  This was our first time buying a home and he helped guide us through process from start to finish. He was great with communication and answered all of my questions. He showed us multiple houses during the evenings, knowing that we had a deadline set. It was a wonderful experience! Shaun is professional, friendly, knowledgeable, and responsive. I give him a 10/10!

Ryan S.

They say the market is so hot right now in Austin that you need to be prepared to write many offers and be prepared to get your offer beat out. I have had friends tell me they have made 30+ offers and are still looking.

That is not the case with Shaun and the team at Eric Bramlett Residential Real Estate. We went and saw three homes over two weekends. We found one that we absolutely fell for but didn’t want to get to attached to it for fear of getting beaten out.

Shaun helped us quickly move and place our offer on the home. He guided us to make a competitive offer and then he took it from there. We made our offer the same day the listing came on the market. He positioned the offer as super competitive to the listing agent and was able to get the listing agent to take the house off the market before the Saturday open house. This helped us limit the competitiveness of competing with multiple bids and getting in a bidding war.

We used our option period to quickly run through all the inspectors. Being from out of town Shaun handled all of this. He even found a plumber to come out and inspect our plumbing even though everyone says plumbers are booked solid still dealing with the fallout from the ice storm back a few weeks ago. Also, because we locked the house down so quickly without other offers, we could get the concessions we were looking for after the inspections came back.

We actually have a friend who was already under contract to buy their dream home when we engaged Shaun to help us find ours. We found and closed on our house before she has been able to complete her transaction.

There are plenty of agents to pick from but if you want the best and to get the home you truly desire the option is clear. You need to go with Shaun.

Last thing to note working with Shaun. He is super laid back and you will never feel pressure from him. He uses that pressure on the counterparty to your advantage.

Bob B.

We interviewed three different realtors and were impressed immediately with Will Macintosh.  He included our input into listing price, time line for listing, and detailed the services clearly.  The whole Bramlett team was was prompt in getting forms to us, and clear in terms of expectations.  The stager was great.  The pictures were great.  The house got multiple offers on the first weekend, sold at $55,000 above list price, and closed in 30 days.  Great experience.  I couldn’t recommend them more highly.

Katie T.

My husband and I worked with Tara McGuire to find our first home in Austin. We couldn’t recommend her enough! She is so knowledgeable of all the areas in Southwest Austin and her connections with other realtors in the area helped us find our home in this crazy market. If you’re looking for a great agent, we highly recommend Tara!

Bart L.

Ashley Vavasour was very helpful in our first home purchase and helped us through the new build process.  She is professional and friendly. I do recommend Ashley to anyone looking to purchase a home!