It comes as no surprise that the Austin market ended Q1 2018 with a surge in sales despite the low inventory. After a busy winter season, we’re seeing competition heat up early this spring.
The Austin-Round Rock Metropolitan Statistical Area (MSA) saw a 10.5% year-over-year increase in sales in March. It was a record-breaking month, which is increasing urgency for buyers. Traditionally, the summer months are the busiest so many buyers are trying to get an early start to better their odds.
Sellers definitely have the advantage across the MSA. Once again inventory levels dropped, sitting at 2.2 months at the end of March. In Austin levels have bottomed out at just 1.5 months. Buyers will have to act fast and come in with strong offers if they want to be a contender. The average days on market (DOM) can be as little as a few weeks in some areas. In Austin the average DOM dropped to 46 days, down from 51 days in March 2017.
The more affordable the home is the less time it will likely spend on the market, especially within the city limits of Austin. It’s one more pressure point for buyers that are looking for a home under the local median price point. The median price for single-family homes across the entire MSA increased 3.5% to $305,233.
Buyers that need to find a home below $250,000 are increasingly turning to the suburbs and not just Round Rock or Cedar Park. Manor, Kyle and Del Valle are all experiencing growth due to an influx of people that want to own a home but can’t afford the rising Austin prices. We’re also seeing more buyers that are willing to sacrifice size both inside and out. Townhomes and garden homes are another option for buyers that need a home in the $150,000-250,000 range.
In addition to the summer surge, there’s another factor that could have an impact on the Austin real estate market in the coming months. The city is on Amazon’s short list for the company’s new headquarters dubbed HQ2. If selected, Austin would be home to a $5 billion complex and around 1,000 highly paid Amazon employees.
The effects wouldn’t be felt immediately, but a huge project like HQ2 would boost the economy and home prices. For renters, there’s concern that the influx of workers, both from Amazon and construction crews, would send rental rates back up after a period of leveling off.
Amazon’s HQ2 may still be up in the air, but the competition this spring is all too real for many buyers. To get an accepted offer, buyers have to be prepared to act quickly. Now is the time to assemble your team of real estate professionals and start getting financial matters in order.