Making Sense of the Austin Real Estate Market…

The last 2 1/2 years have been crazy when it comes to real estate, across the country and specifically here in Austin.

The beginning of 2020 (pre-Covid) was met with a high buyer demand… We were already writing multiple offers on properties at – or slightly above – asking price as early as January/February BEFORE Covid.

THEN… Covid hit, and the real estate market came to a screeching halt.

The only sellers selling were those who HAD to move… Likewise, the only buyers BUYING were those who HAD to relocate.

Open houses were a thing of the past and we learned how to tour homes via Facetime and create videos and virtual tours.

People had to quarantine upon arrival, so they were buying homes sight unseen! (In fact, I had one client that didn’t see their home for almost 4 months AFTER they had closed on it).

To government then began giving away “virtually” FREE money! So, from November 2020 we started seeing bidding wars and significant “over list” offers as interest rates took a nosedive!

2021 was chaos until… MOTHERS DAY! Then we saw an immediate pull back.

My anecdotal answer to that is that people were simply tired of being cooped up for the last 14 months. People were taking vacations, visiting friends and family and simply weren’t “focused” on real estate. All the experts warned that the market was crashing.

Fast forward to December of 2021 and we were seeing bidding wars once again.

For roughly two years, we experienced amplified seasonality of the market due to economics, politics, etc. People wanted to be in Texas, Austin in particular… and companies were coming (and continue to come) to Austin.

So, what happened?

Interest rates… PERIOD. In December 2022, we saw interest rates on a 30-year mortgage teeter right around 3.0% +/-. In November, we saw rates skyrocket north of 7%.

  • Buyers could no longer afford to purchase at the same price.
  • Sellers didn’t want to “upgrade” when they’d be trading in a 3% interest rate for 7%!
  • Buyers were afraid that the market was going to CRASH (thank you, media!)
  • Buyers were TIRED from the past two years!

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