It’s hot out there and I’m not just talking about the weather. Consistently low interest rates coupled with increases in rent payments have led more buyers to enter the Austin housing market. The main factor that limits a tenant from being a homeowner is the down payment. There is not always a big difference between a monthly rent payment and a mortgage payment. So, with some money in their pocket, I am seeing more and more first time home buyers enter the Austin real estate market who were happy to be tenants 2 years ago.
Austin Real Estate Market
Low interest rates have given people buying power and motivation to be homeowners. The influx of first time home buyers purchasing lower priced homes has led to very low inventory. It is the low inventory that has driven Austin home sales into a seller’s market and as a result of that – prices have increased in all price points.
Austin Real Estate Home Seach
Buyers and Sellers need to tread very carefully over the next two months as market data catches up with the shift into a seller’s market. Multiple offers are being driven by lack of inventory. Lack of inventory is leading buyers to offer more than list price. List price and even over list price is leading properties to not appraise because appraisals are based on sold comparables and sales history have not caught to today’s prices. This will settle out in a couple of months, as the sales history starts to reflect today’s market. If the house does not appraise though, a buyer is not going to get a loan.
Buying an Austin Home
Buyers are not looking at things with the same set of eyes they were years ago. Buyers are now recessionistas. They understand this may not be the market for a deal, but they do expect value. That means seller’s still need to show pride of ownership. The house should still be spotless, the yard should still be mowed and all systems should still be maintained. Sellers who do not show their homes in the best possible light, will find their house needs to be priced at a deal or it may not sell at all, just like any market. Buyers don’t mind paying what a house is worth to them, but it needs to be worth it.