The staggering increase in the number of homes sold hundreds of thousands of dollars above list price is symbolic of the hot housing market in Austin, which had the nation’s highest price growth in April.
Seventy-two homes in the Austin metro have sold for $300,000 or more above asking price so far this year. That’s compared with just two homes during the same time period in 2020.
Meanwhile, 1,440 homes in Austin have sold for between $100,000 and $299,999 above asking price, compared with 20 homes last year. Just over 4,500 homes in the metro have sold for between $25,000 and $99,999 above asking price, up from about 350 last year.
The margin is smaller for homes that sold for less than $25,000 above asking price, with 2,810 homes in Austin selling above that threshold so far this year versus 2,748 last year. The numbers in this report are based on MLS data.
In April, nearly 74% of Austin homes sold above their asking price, with the typical home selling for $35,000 above its asking price.
“I recently sold a home that was listed at $565,000 and closed at $715,000. We received about a dozen offers—which is actually a low number by today’s standards,” said Austin Redfin agent John Dawson. “The winning buyer also waived appraisal and financing contingencies and dropped off cupcakes that matched the interior colors of the house, which was a nice touch because the seller is an artist and the home is unique and colorful.”
Partly because of the sheer number of homes selling so far above asking price, Austin had the nation’s highest price growth in April, with the median home-sale price increasing 42.3% year over year to $465,000. (Note that because pandemic lockdowns slowed homebuying and selling in April 2020, year-over-year price growth is somewhat exaggerated.)
Austin’s housing market is a prime example of how the coronavirus pandemic has fueled intense homebuyer demand and impacted prices and competition.
Austin is one of the most popular destinations in the country for people moving from one metro area to another, and it has become even more popular since the beginning of the pandemic, largely due to remote workers moving in from expensive tech hubs like the Bay Area. Roughly 39% of Redfin.com searches in Austin were from users outside the area in April, up from 32% the year before. Net inflow into Austin–the number of people looking to move in minus the number of people looking to leave–has doubled over the last year.
The pandemic has also encouraged locals to move into more spacious homes with bigger outdoor spaces to accommodate remote work and online schooling. Locals are competing with out-of-towners for a limited supply of homes, and migrants’ budgets are 32% higher, on average, than Austin locals: $855,000 versus $650,000.
Still, agents are urging sellers to be realistic about their expectations.
“Some sellers are listing too high and receiving lukewarm interest,” Dawson said. “I’m encouraging sellers to price their homes realistically, because some of the ‘comps’ aren’t truly comps; some are cases of an extremely motivated buyer who was willing to pay way over asking price to secure the home they wanted. For instance, I sold a home last week for $635,000. If I were to list the next-door neighbor’s house, assuming it’s identical, I’d list it for around $590,000 because that’s right around where most of the offers came in. The seller may receive at least one offer that’s well above the asking price, but I wouldn’t want to list too high and discourage buyers from looking at the house.”
