What a year we had in 2021! I wanted to jump in here to do a recap of where we ended the final quarter of 2021 and also give my thoughts on where we're headed in Q1 of 2022.
In a nutshell: Q4 is the time for buyers to take advantage of the slight lull we often see after the crazy summer and fall.
Let’s start with comparisons from December 2020 to December 2021.
As always, these statistics are pulled straight from the Austin Board of Realtors for the City of Austin.
Compared to December 2020:
- The median sales price has increased from $461K to $555K, which is a 19% increase.
- Inventory has decreased from 3 weeks to 2.5 weeks.
- New listings have decreased from 755 to 641, which is a 15% decrease.
- Active listings have decreased from 753 to 548, which is a 26% drop.
- The number of average days on market has dropped from 34 days to 25 days.
Rising Median Sales Price, But Not by Much!
From December 2019 to December 2020, the median home sales price went up by 18%.
From December 2020 to December 2021, the median home sales price went up by 19%.
That's quite consistent and further reassurance that Q4 is a good time to get your foot in the door. For context, we saw a 3% increase from June 2020 to June 2021 and a 42% increase from June 2020 to June 2021. In June 2021, the median sales price was at $575K and in December it actually fell to $555K.
My prediction at the start of Q1 in 2021 was that Austin would hit a median sales price of $550K and here we are.
It makes sense that prices will continue to rise year over year here in Austin. The Greater Austin Chamber of Commerce showed that companies and their relocations and expansions to Austin have promised to bring in 23,000 jobs.
I recapped a few current events that happened over the year in my last market update, but to reiterate and elaborate, here are some new expansions that were announced:
- Austin FC stadium in the Domain is now open and the season is in full swing as of this past summer.
- Tesla's GigaFactory in Southeast Austin by the airport almost seems like old news, but is surely not something to sleep on. Tesla invested nearly $1B into this massive facility. It's expected to be finished before the end of 2021 and bring in over 10,000 jobs by the end of 2022.
- Apple's new 133-acre campus in North Austin is well on its way, which will employ 5,000 employees across many different departments including engineering, finance, R&D, sales, and operations. More jobs means more talent means more highly qualified buyers.
- Google is opening new offices to add to their existing base on W 2nd St downtown. They're expanding their presence in Austin on the East Side with a 150,000sqft office in Saltillo Plaza. They're also building a 35-story tower downtown that's supposed to be completed by 2023.
- Amazon invested $250MM to build a 820,000sqft warehouse in Pflugerville that's expected to bring in 1,000 jobs.
- Chanel has purchased 50+ acres of land by Del Valle to build a manufacturing warehouse for their skincare products.
- Samsung revealed that they're putting their new $17B plant in Taylor in Williamson County. This is about 35 minutes northeast of downtown Austin. This facility is expected to employ 1,800 employees and will be one of the largest foreign investments in recent US history.
- HBO leased 110,000sqft in Kyle Crossing in Kyle, which is 30 minutes of downtown.
- Netflix signed a lease for 20,000sqft in East Austin.
- Compassionate Cultivation, a major cannabis company, just broke ground on their new 95,000sqft HQ complex in Bastrop. They just announced in June that they raised $21MM in their series B funding round. They've invested $8MM to build their new home, which is expected to be completed by May 2022. They're currently leasing a 7,200sqft space in Manchaca through July 2022.
Given all the steady developments in the city, plus the fact that inventory was low to begin with, I think it's safe to say that sales prices will continue to rise in 2022.
Inventory is the market’s supply and runway. It answers the question, "If no other properties go on the market and homes continue to sell at the same rate they have been, how long would it take to run out of available homes?"
Our inventory is low, coming in at just 3 weeks. To get this number, you divide the number of active listings by the average monthly sales over the last year. If that number is between 0 and 4, it's a seller's market (like right now), if it’s 5 to 6, it’s neutral, and if it’s over 7, it’s a buyer’s market.
We've been hovering around 3 weeks all year, so this decrease comes as no surprise. In my experience, buyers seem to have adjusted to this fact and are upping the aggression with their offers to compensate.
Movement in the Market
New listings have increased from 755 to 641, which is a 15% decrease. These are homes that are freshly listed to MLS.
Active listings have decreased from 753 to 548, which is a 26% drop. These are homes that have been sitting for anywhere from a few days to a million days.
Compared to the summer, both new listing counts and active listing counts are low (1,672 and 801 respectively), which means fewer folks are listing their homes. This makes sense given the busy holidays through Q4.
The number of average days on market also dropped from 34 days to 25 days. This means that your average home sits on the market for 25 days before going under contract. Compared to the summer, this is an improvement for buyers, when the average days on market was 13 days.
While the "hot" homes still receive multiple offers within 24 hours and are under contract within 48 hours, the market isn't as crazy as the summertime. This is yet another reason why I like Q4 for buyers, especially those who may be feeling discouraged by the summertime madness.
Putting these numbers all together, we can see that fewer homes are being listed, and when they are listed, they're sitting on the market for longer periods of time compared to the summer. Again, this makes sense because most sellers want to relax over the holiday season and start fresh in the new year.
But there's, of course, a caveat! While this time is less competitive for buyers, it also means that there are simply fewer options. That tradeoff is one that buyers must weigh based on their budget, timeline urgency, and a plethora of other factors that a strong real estate agent can help them juggle.
Overall, 2021 was an insane year for the real estate market across the country, but especially in Austin. While we wrapped up the year in a very brief lull, the market quickly picked back up by the second week of January 2022.
If you're curious about my predictions for 2022, you can read those here.
And, as always, if you're ready to talk about your options, feel free to drop me a line!
January 13, 2023
Austin Market Update: Where Are We Going in 2023?
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Austin Market Update: Quarter 3 of 2022
An update on the Austin market for the third quarter of 2022
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