Well folks, if you’re wondering if the market has cooled off at all now that we have rolled in to 2021, it hasn’t. In fact it’s been quite the opposite. We are still seeing historically crazy numbers across the board. Indicating that not only are we firmly planted in a seller’s market, but a historically crazy seller’s market.
To give an example of how we measure the type of market we are in, we look at what’s called the months supply of inventory. This measures how long it would take for every current home on the market to sell, if no more new homes came on to the market at all.
In a balanced market, we have typically have 4-6 months supply of inventory. Anything over 6 months is considered a buyer’s market, and anything under 4 months is considered a seller’s market. However, this is in a very “normal” market. In Texas, we have technically been in a seller’s market for so long that if we went above 3 months of inventory, it would seem like something insane was happening.
To put in to perspective how far we are skewed towards a seller’s market, here are the months supply of inventory for the greater MSA’s of Austin, Dallas/Fort Worth, Houston and San Antonio:
- Austin: 0.6
- Dallas: 1.6
- Houston: 1.9
- San Antonio: 1.6
These are unprecedentedly low, Historically low is probably a better term. Here at ListingSpark we work all over Texas, but are headquartered in Austin. Cedar Park, a suburb of Austin on the north side of town typically has hundreds of homes on the market at a time. As I sit here writing this… there are 4.
You read that right, there are 4 total houses for sale. All of these will receive multiple offers. One house that recently closed was listed at $425,000 and closed at $550,000. We were told this particular house had over 70 offers and the original price was in line with the comps so it wasn’t underpriced based on sales from the last 6 months.
Builders have bidding wars happening with buyers to simply lock-in a lot to be able to build on. Waitlists in some communities are 100’s of names deep. This is not typical, normally builders are begging for buyers to come in pick out lots to build on.
In short, if you are selling your home, we have never seen a market this tilted towards the seller in recorded history. With such unprecedented times, it’s nearly impossible to predict what the future holds or how long this will last, but no indicators are showing that things are going to cool any time soon. We are seeing areas with annual appreciation exceeding 25% in early 2021 compared to this time last year. To put that in to perspective, in a balanced market, appreciation rates of 5-7% are considered strong.
Let’s breakdown the other stats to look at in each market.
- Closed sales: up 16.2% to 3,626
- Median Home Value: up 15.8% to $370,000 (All time record for the Austin MSA)
- Pending Sales: Up 40.8% to 3,114
- Months of inventory: 0.6% (All time low)
- Closed Sales: up 17.8% 24,795
- Active Listings: Down 43.4% 51,702 (this is a crazy stat)
- Median Home Value: Up 12.7% $262,000
- Months of Inventory: 1.6 months (Compared to 3.0 last year)
- Closed Sales: Up 25.5% to 9,652
- Median Home Value: Up 8.7% to $273,443
- Months of Inventory: 1.9
- Closed Sales: Up 22% to 2,559
- Median Price: Up 14% to $227,900
- Months Supply of Inventory 1.6
Let’s talk about what’s driving this crazy market.
We are still seeing a mass exodus from California to Texas. This includes both buyer’s and buyers relocating to buy owner occupying properties. We are also seeing investors looking to buy in at lower price points to park their money with a moderate cap rate, but banking on capitalizing on the “run up” in pricing.
In addition, Millenials and Gen Y are buying more homes now then ever before. Last year, they made up 39% of the overall market. With a significant portion now working from home, they have the freedom to relocate to anywhere in the country no matter where their company is headquartered. Many are choosing Texas over, California, New York or Washington to find more affordable prices where their dollar will stretch more.
Interest rates have climbed a bit, but are still projected to stay low through the entirety of 2021, which is keeping buyers in the market to capitalize on these low rates.
If you are considering selling anywhere across Texas, let ListingSpark help maximize your exposure and price while saving you thousands in listing commissions.
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