It’s a Seller’s Market in Austin!!

It’s a Seller’s Market in Austin!!

Seller’s market in Austin!

Are you in the market to sell your home in and around the Austin, TX area this summer?  Perfect timing, because  the summer of 2013 has kicked off with and bang and houses are selling fast at increasingly higher prices. Many property listings in desirable neighborhoods are seeing multiple offers at or above list price as soon as the house hits the MLS. A combination of a strong employment market in the Austin area causing thousands of people to relocate each month, along with some reluctance of new home builders from over-building like in 2008 has reduced inventory drastically.

To get a sense for how strong this market is, the below table shows the decreasing Days On Market for listings under $300k  in the city of Austin over the past three months:

Days on Market382521

While this is great news for sellers leaving the Austin market, it’s turning into a real headache for home buyers looking to purchase a home in Austin. Multiple offers driving up prices can come back to hurt the transaction when appraisals return below the contracted price. It then requires the seller to either lower the price or the buyer to increase their downpayment to satisfy lender underwriting requirements. Sometimes when this can’t be worked out, the deal collapses and the seller tries again, hoping that appraisal data becomes more current to reflect rising prices. For the buyer, they just wasted weeks of time, often missing out on other homes that came and went.

Although I would never recommend it to a client, some buyers often get desperate to “win” a bidding war and choose to forgo an inspection.  This typically comes back to bite the buyer down the line when something is discovered post-closing.