Low Inventory Still Causing Record Low Sales

The Austin housing market is experiencing a crisis of sorts as we ride into the Spring selling season, typically the most active time in our market. Record low inventory is wreaking havoc in our market as population growth and demand in Austin outpace the number of available properties.

Buyers are fighting for properties in almost all price segments with entry level buyers and those seeking a mortgage being the biggest losers in the fray. It is not only common, but the rule right now that there are multiple offers, sales over list price and days on the market limited to the number of days the listing agent is holding the property before submitting “final and best” offers to the seller.

It is indeed a great time to be a seller. And, its a really stressful time to be a buyer. If you are a seller in today’s market, chances are you are either moving to assisted living or out of the city. Why? Because sellers who are also moving up in price or downsizing are disappointed in the prices they would have to pay to move within the city. There are few quality choices for sellers who want to remain, and the competition for what is available is so stiff that few want to jump into market. And, most sellers right now either have a low mortgage payment and interest rate at or below 4% so they aren’t motivated to move.

What does that mean for Austin? Short term it means that prices will continue to increase as demand keeps fueling them upward. It also means that our entry level buyers are having to move farther and farther out into the suburbs. Prices have risen over 16% in the last year.

Forbes recently called Austin the #1 city for overall tech and job creation over the past decade. People are moving here because of our quality of life and business friendly tax situation. I just wonder how long we can sustain the character of the city that I’ve loved and enjoyed since childhood.

Yes, real estate is cyclical. I’ve seen it up and I’ve seen it down and every where in between since I began my real estate career in 1979. The cycles generally run in 10 year cycles. We began tracking the market statistics monthly in 2006 and saw the last downturn before most. Every month we publish a comprehensive real estate market report so we can follow the trends and predict the cycle for the next quarter.  Take a look at our April Market Report. You can find all of these market reports at WestAustin.com

If you’re a buyer right now, be patient. The market will loosen. If you’re thinking of selling, now is the best time I’ve seen since 2006 to maximize your tax free equity. Remember that a married couple can take $500,000 equity out of their primary residence tax free.

Real estate will always be local and fluctuates by neighborhood. We are happy to give you a personal assessment of your home or help you find the best property.

Submitted by Laura Duggan, West Austin Properties, 3312 River Road, Austin, Texas 78703; 512-750-2425; laura@westaustin.com