You’ve heard the rumors…homes selling for $50,000, $100,000, $300,000 OVER their list prices with 30, 50, even 125 offers. It’s ALL true. And it’s all a little bit shocking.
I’ve received so many calls, texts, and emails about what our real estate market is doing, and I wanted to share some valuable insight that I hope will help you and your loved ones. First, don’t panic–there are some incredible silver linings, especially if you’re a homeowner. And, even if you’re not, there are still opportunities. Let’s get started.
1) Our market is desperate for inventory.
Last week, a TOTAL of 123 homes were available for sale in ALL of the greater Austin, TX, areas. It probably goes without saying, but if you’ve EVER thought about selling your Austin-area home, NOW is the time. Your home will most assuredly command multiple, above-list-price offers with appraisal waivers.
2) Wait. What’s an “appraisal waiver”?
An appraisal waiver means that the buyer’s offer expressly removes the appraisal contingency. In other words, even if the buyer is obtaining financing, the appraisal does not have to come in at value for the sale to proceed. The buyer will come to the closing table with CASH to make up the difference between the contract price and the appraised value.
Crazy, right? While this may seem a little hare-brained, it’s prevalent–even expected–in our market right now. The vast majority of offers that sellers accept in our area include appraisal waivers. Buyers moving forward with home purchases understand that they are overpaying for the property, but they are banking on the Austin market’s long-term appreciation as their investment strategy.
3) Why is this craziness happening, and how long will it last?
In addition to the influx of residents from other states like California, New York, and New Jersey because of our quality of life, business-friendly environment, and cost of living, the greater Austin area fell woefully behind on building homes between 2010 and 2015. Don’t get me wrong–I’m not laying blame at the foot of homebuilders, but falling behind on building homes during those years makes it virtually impossible to overcome our current inventory shortage in the foreseeable future. Further, I wish I had a crystal ball–that would be very handy in real estate! And while I’m not sure how long this crazy seller’s market will last, let’s just say that it will be here for at least 2021.
4) If you’re a seller or thinking of selling your home:
If you’re ready to sell your home and move to the next chapter of your life, do it! There has NEVER been a better time to sell your home.
I’ll use an example of a recent client who is retiring–they are capitalizing on the market by selling their current home while the market is HOT. From there, they will put their proceeds in the bank and live in a nice rental with fixed costs for the next 1.5 years while they build their forever home. This strategy positions them as an incredibly attractive buyer to a homebuilder (or seller) when the time comes for their forever home.
5) If you’re a buyer or thinking of buying a home:
Don’t get discouraged! But know that it has never been more crucial to hire a real estate professional who has the necessary experience and negotiation skills to advocate on your behalf in a challenging market. You must have someone who knows this market and knows how to structure an attractive offer that has the best chance of being accepted by a seller in a multiple offer situation. That knowledge comes from years of experience with real estate contracts, working with sellers, and working with buyers.
If you have questions about our market, or if you’re weighing whether to sell your home now or wait, contact Prism Realty. We’re here to offer our expertise, and we’ll be by your side every step of the way–give us a call at 512-676-5842.