Real Estate Broker/Owner with E-Rae Realty 651873
If you’ve been keeping an eye on the Austin real estate market lately, you’ve surely heard that the ATX has become one of, if not the most, competitive markets for home buyers in 2021.  You’ve probably heard about homes flying off the market at record speeds, selling for hundred of thousands of dollars over asking price, and new builders only being able to sign 1 or 2 contracts a month for homes that won’t even be completed until 2022.  However, something you may not have heard about yet is the subtle shift in the Austin real estate market over the past two weeks.  I’ve seen homes sell for asking price, homes that only had a few offers, and the return of due diligence periods.

This shift is subtle, and if you are not actively working in it everyday, you may not even notice it. But I feel it, and if it continues, it will have implications. You may be wondering why this may be.  All of the signs point towards continued demand and thus higher prices. And, that is still true, but the market is behaving slightly differently. I hypothesize this subtle shift is due to a few different variables.


Many individuals looking to purchase in the Austin market are quite simply beginning to feel defeated.  I have a few buyers who have been trying to buy a home for the past few months, and are still empty handed.  They’ve offered well over asking price, waived their appraisal contingencies, and offered 5 digit earnest money deposits yet they still haven’t been able to get an accepted contract.  After the 4th or 5th time of this, some buyers begin to feel like they simply cannot win in this ultra-competitive market.  Some of these buyers decide to stop trying altogether, or opt to purchase in another city altogether.  Others are still observing from afar, but are less motivated to make offers on available homes.


In order to determine an appropriate asking price for a home, you need to look at the sold prices for comparable homes.  Since the home sale cycle from list date to close date is usually around 30 days, sold stats are constantly lagging behind the market.  Over the past few months, most homes have been appropriately listed at prices determined by the sold comparable homes.  However, the majority of those homes went under-contract at a price far higher than the asking price.  We are now beginning to see those homes close, and new listings are being priced using those sold stats.

​For single-family homes listed in the Austin MLS, the median list price/sqft increased from $197/sqft in February to $213/sqft in March. As listing prices are increasing, I foresee this leveling out the difference between asking price and contract price.  This is not to say that the majority of homes will not continue to sell for above asking price.  I think that trend will continue, but I think we will see the difference between asking price and sold price decrease. Earlier this year we saw some homes selling for hundred of thousands of dollars over asking price; I foresee the ratio of list price to close price decreasing in the coming months.


The February storms caused a serious strain on an already tight supply of inventory in the Austin market.  Some homeowners that planned to list in February were forced to wait to list due to unexpected repairs as a result of storm damage.  Others simply decided to wait to list, since the city was essentially shut own for an entire week.  In February, we had 2,360 new single-family residential home listings in the Austin MLS.  In March, we had 3,745 new single-family homes hit the market. Historically, we see the largest inventory increases in the Austin real estate market between March through July.  So far, the number of new listings in 2021 has been lower than what we saw last year (even with the pandemic). However, it looks like the  trend for increased listings in the spring to summer months will continue for 2021.


This subtle shift should benefit those looking to purchase in the Austin market.  Home prices likely will continue to be the highest they have ever been, BUT as sold comps catch up to the true market it will be easier for buyers to purchase homes.  Appraisal waivers (essentially agreeing to purchase the home no matter what it appraises for and agreeing to bring the difference between the appraised value and the offer price in cash to closing) were almost mandatory over the past few months.  This made it nearly impossible for someone without a ton of extra liquidity to compete in multiple offer situations.  It was particularly detrimental to those buyers looking to purchase a home using a VA or FHA loan as these loan programs expressly prohibit the use of the Appraisal Waiver Addendum.  Now that we are beginning to see the new market sales data, homes are more likely to appraise at or closer to offer prices.  This has huge implications for any buyer using a loan to purchase a home.

For someone considering selling their home in Austin in the near future, you can still expect your home to sell for top dollar.  In fact, you will likely get more for your home in the coming months than if you had listed your home for sale in the first quarter of 2021.  However, you may not get all of the other offer terms that many home sellers received earlier this year.  We saw home sellers receiving offers where the buyer incentivized the seller with a complimentary lease back.  Sometimes, the buyer offered for the seller to stay in their home for an entire year for free after the buyers purchased the home.  These will likely become more conservative or dissipate entirely.  You also may see the re-emergence of typical seller expenses such as the title policy, and buyers may begin requesting a seller paid for home warranty again.  All in all, these nominal expenses will not adversely affect your bottom line. You can expect to still sell your home for the highest price, but you may arrive there with fewer offers and more buyer preference in regards to offer terms.

If you have questions about the Austin real estate market, or need advice when contemplating your next move, contact me.
This post originally appeared on
Posted by
Erika Rae Albert 
Broker, Realtor®, GRI
108 Wild Basin Road South Suite 250
Austin, TX 78746
t: 512-779-7597
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Comments (11)

Kathy Streib
Cypress, TX
Home Stager/Redesign

Hi Erika- very thorough and informative analysis of the Austin market!!!  As more things open up, it will be interesting to see where the market goes. 

Apr 02, 2021 07:21 PM
Erika Rae Albert, Austin Real Estate Expert

It sure will!  

Apr 03, 2021 08:20 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Hi Erika,

Great observation on the Austin market and well laid out with valid points. I agree the difference in the list price and the sold price won't show such a wide spread as in first quarter. We have good comparable sales now to start the list price out higher and will still see homes going over list price but maybe not with all the incentives attached in offers as before.

Apr 02, 2021 07:46 PM
Erika Rae Albert, Austin Real Estate Expert
E-Rae Realty - Austin, TX
Exceeding Expectations in Every Transaction

Yes, these are just my projections, and there will certainly still be outliers.  However, it's validating to see another Austin proffessional agree with my thoughts!

Apr 03, 2021 08:20 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Apr 03, 2021 06:46 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Erika - the market has its own equalizing and stabilizing behavior.  I think I see that in some reports on this platform.

Apr 04, 2021 05:34 AM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

I agree Erika Rae.  We are still seeing multiple offers, above asking price accepted offers and a frenzy attitude...yet there is an underlying current.  Nothing so obvious yet that is seen.  Just felt and only by those paying close attention.  Enjoy your Easter, be safe, stay healthy.  Mark

Apr 04, 2021 05:53 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

You definitely know your market!  Great explanation of the subtle change that may make it easier for buyers with loans in Austin to get a home.

Apr 04, 2021 09:56 AM
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Hi Erika, great overview of the market you are in. We are still seeing well above asking offers being accepted, not every buyer can compete with that even if they waive all the contingencies. 

Apr 05, 2021 09:46 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Erika,

My market in Sedona lags a little behind the normal markets we see in other areas.  Clients are generally looking for second homes or investment-retirement properties. It is a bit more discretionary. 

Apr 05, 2021 11:37 AM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Very informative!  You are a keen Realtor to notice those subtle shifts in the market. I agree--some buyers are giving up. But they just have to be patient and stay focused--something will pop for them.  I would like to go back to the 'normal' days of doing inspections and getting closer to asking price rather than the race to go way over.

Apr 08, 2021 02:13 PM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.   Thanks for sharing and have a wonderful week!

Oct 19, 2021 07:47 AM