I have told you over the past few months that there were subtle changes happening in the Austin-area residential real estate market — somewhat less intense bidding wars, pending listings coming back on the market, occasional price reductions, etc. By no means has it been a wholesale shift in our environment, but given the frantic pace during the first half of 2021 even small changes, in my opinion, have been healthy.
I began telling my clients in June that in May I saw what I thought could be hints of this change. This chart shows two important metrics that highlight how this year’s market behavior compared to the last two years (and to every other year in this market cycle):
The process began the early in 2020, with time it took for an average listing in our 5-county metro area to go from newly active to under contract dropping from 61 days in January 2020 to 30 days in January 2021. The median days to sell was even lower, with half of all listings under contract in less than a week in January 2021, and that triggered aggressive buying activity among competing buyers.
Notice how sharply that activity affected sale prices, with the ratio of actual sale price to original list price going from 100% in December to 109% in April. Around that time buyer fatigue and dwindling inventory took some of the heat off, and in October 2021 we’re back to down to 100% for that metric. The Days to Sell metric reached its bottom in July at an average of 11 days, and in October it is up to 18 days.
The trend for Austin metro home prices is and will remain upward, but not at the pace we saw earlier this year. From May through August we our listing inventory almost doubled (but remained 20% lower than in August 2020). Later this week I’ll have final sales and listing data for September from the Texas Real Estate Research Center, but based on MLS data at this point it looks like we made a little more progress then and will again in October. I’ll keep you updated.