Austin housing market data is basically a rinse and repeat of the months before. Austin real estate activity in Central Texas is greatly influenced by price points right now over the location.
Back in the day, a buyer would choose an area they wanted to focus on. On a grand scale, they might choose one zip code, but would often scale that further down to an actual area within that zip code like Travis Heights or Tarrytown. Some might even scale that down further to a neighborhood like Circle C or River Place. Those were the days when there could be a large price differential between neighboring zip codes or even communities.
Those days are gone.
Buying a home in Austin has changed
A home buyer today is different. Scarcity has changed home-buying habits. It’s more about where buyers can afford a home rather than where the home is located. While that search area tends to be larger, the search results are typically underwhelming. Like much of life the more you have to spend, the more choices you have.
Home buyer’s need to plan ahead
When you are renting you can’t plan early enough. I’ll take 4 months or more if I can get it.
- 1 month to know your numbers with a lender
- 1 month to understand the home buying process
- 1 month to understand the current market
- 2-3 months to find a home
- 1 month to close on a home
Paying cash? It still may take you 3 months (or more) to find a home.
Time is money. Don’t underestimate the value of a Seller Leaseback
Pandemic, shipping containers, and supply chain problems aside, one more data point is Austin homeowners who want to stay in Austin aren’t selling. The price jumps to buy something different are too high. Central Texas sellers who want to stay in the area don’t really know what their profit will be when buyers often decide to bid up. That’s why many homeowners who do decide to sell are asking for a temporary leaseback.
In this market, it is essential for buyers to plan ahead and be prepared to offer one. Years ago, a seller might need 2 days to a week if they needed a leaseback at all. Now, it’s typically a month that is posed as a requirement in the listing. Temporary leasebacks can be used for up to 90 days, while still allowing the property to be considered owner-occupied for the buyer’s loan. Non-owner-occupied homes with longer leases are considered investment properties and have a different interest rate structure.
Selling a home in Austin has changed
Sellers need time to think about where they are going to go if they can’t find a house. Much of the planning often doesn’t begin until they are under contract.
Until you are an actual player in this market, it is really difficult to believe. It can be as emotionally deflating for a buyer as it can be overwhelming for a seller. Telling someone they may have back-to-back buyers coming through their home for 8 hours on a Saturday is very different than experiencing it, especially when we have lived like hermits for two years. If they have an emotional attachment to the house, sellers wind up detaching quicker than they can often process.
That seller turns around and becomes a buyer and winds up paying forward their profits into the next home. It’s emotionally draining for everyone.
On the inside: buying and selling homes are emotional moments as much as financial transactions
People not in this market, often make the comment that it is great. It can certainly seem so from the sidelines. It’s only when you are in this market handing someone a tissue box, that you understand how not so great it often is.