The Austin housing market is booming, which is great if you’re a seller but not as great if you’re a buyer. With businesses moving and building headquarters into our fair city, the demand for housing is more than the houses currently available, making the market highly competitive.
But that doesn’t mean buying a home is out of reach! To truly know the best time to buy, you must see the housing market trends and the forecast so you can plan and strike when the market is in your favor.
Trends of the Austin Housing Market
To navigate the Austin housing market, you’ll need to understand the current trends. Large companies like Apple, Oracle, Google, and Tesla are making Austin their home, which means home sales and home prices are skyrocketing. While the pandemic turned the housing market upside down, the Austin market’s recovery is surging forward with unprecedented demand and an all-time low supply. Here are a few things to know about when it comes to the current Austin real estate market.
According to Roofstock, housing inventory, or the number of available houses for sale, has dropped to an all-time low. This is because of the influx in available jobs; builders aren’t keeping up with the growing demand for new homes from locals and incoming residents from other states.
While demand for real estate has increase 19% year-over-year, the active number of hones listed has decreased by 55% compared to this time last year (2020).
- Home Value
According to Zillow, the Home Index Value for Austin is $437,800 (as of November 2020). This number is only increasing as bids for homes become increasingly competitive. When a house sells for more than its asking price due to competitive bidding, the places around it also rise in value, meaning that housing prices will continue to grow as long as the current demand for homes is not being met.
With more cash offers from out-of-state buyers and a decreased inventory, this is a highly competitive market for those looking to buy a home. Offers can include bidding over 30% of the asking price to get their foot in the door. More often than not, a buyer may lose out on several offers before finally getting a home.
- Low mortgage rates
Despite the competition and lack of inventory, this is a good time to invest as rates are low to help entice new buyers after a COVID buying slump.
Things to Consider About the Austin Housing Market
Knowing the trends is essential, but it’s also important to look at other factors to help you decide on whether to buy.
While there are many sellers hesitant to list their homes due to the pandemic, there are still properties that may be available to purchase that have not yet been listed. You may be able to reach a deal with a potential seller and get a better deal before it gets listed.
A rent-to-own contract means a potential buyer rents a property from the current owner with the intent of buying the home before the lease expires. As you pay rent through the lease, a portion of your payment goes towards the house’s purchase price. There are a few reasons why this arrangement can be more palatable for modern home buyers:
- Lower Down Payment
While a typical down payment for a home hovers around 20-30%, down payment with a rent-to-own agreement is typically about 5%, making it much more affordable.
- Live in the Home
With a rent-to-own agreement, you’re able to live in the house before you fully purchase it, meaning you’ll both live in the home you want and use your lease time to ensure that the property does meet your needs. There is an option to buy and an option not to buy at the end of the lease agreement, so if the house ends up not working out, you won’t be stuck in it until you’re able to sell again and afford a new home.
- Mortgage Payments in Rent
Part of your rental payment goes towards the home’s mortgage payment, meaning the balance is less when the time comes to purchase the house entirely.
Austin Housing Market Forecast
Now that we’ve discussed Austin housing market trends, it’s time to look ahead. According to research by Zillow, the high demand and low supply are likely to continue pushing prices up for the next 12 months. There’s still good news for Austin homebuyers: right now, we’re experiencing historically low interest rates, which make both buying and re-financing a good option, especially for those potential buyers who were able to create extra savings during the lockdown.
Knowing your options, the trends for the Austin housing market, and the forecast for the coming year will all make the process of buying a new home more accessible. Understanding when to buy, when to wait, and how to save will put you ahead of the competition when it comes to bidding on the homes of your dreams.