Still, Bigus said, they lost out on their first choice after bidding about $98,000 over asking price with no contingencies and a leaseback to the sellers in the contract.
This has become the status quo, said April Womack, a Realtor with Moreland Properties, who works out of its Lake Travis location.
“It’s a really strange market,” Womack said. “I compare it to gridlock on the highway. Everyone is trying to get somewhere, but traffic just won’t move.”She said while sellers love the equity rising home values have added to their homes, they would pay more to downsize. And if sellers are not willing to downsize or move out of the area to realize any profits, that leaves the market dry of any inventory.
Active home sales listings in the Lake Travis-Westlake area have gone from an average of 124.8 active listings per year to 24.4 active listings per year from 2016-21, according to data from the Austin Board of Realtors. That accounts for an 80.45% decrease in available homes in the past six years.
The shortage of homes on the market means the ones that do sell, sell fast. Lake Travis-Westlake has seen a 71.6% drop in the average days a house sits on the market, from 69.6 days in 2016 to 24.6 days in 2021.
This lack of inventory with a surplus of buyers has led to a few creative strategies, Womack said.
“People are using a lot of emotions when buying a house,” Womack said. “People get emotionally attached to a house because it’s pretty, not because it makes financial sense. Emotions will cause them to pay so much more.”
Womack said buyers are pouring those emotions into their bids for a home, sharing their life stories, hoping the seller gets emotionally attached back to them. Additionally, buyers are now covering some expenses that typically would be covered by the seller, such as offering free seller leasebacks.
Over the past five years, the median price of homes has increased by 63% in Lake Travis-Westlake. In 2016, the median home price was $499,995 while in 2021 buyers paid an average of $815,000.
Mark Sprague, Independence Title’s state director of information capital, said he does not expect the market to plateau anytime soon.
“We are in a good place—what everyone is complaining about is a good market,” he said.
He said the lack of product has helped prices remain high while a record amount of savings in buyer’s bank accounts has not slowed down bidding.He estimates Americans have saved almost four times more than usual during the pandemic and are now putting that cash down on homes.
“If you are a seller, great, but you might need to move down in size if staying in Austin,” he said.
Womack said the best way to stay ahead of the game is to find a Realtor who is plugged into the market and can access the area’s Multiple Listing Service.
“There is a lot going on in the private market outside of the MLS,” she said. “If you don’t pick a very plugged-in local agent, you will miss out on so much knowledge and activity that is happening under the table.”
As for Bigus, she and her husband finally found their home in Old Lakeway after their Realtor called them when a property that matched their wishlist popped up.
This time they had pulled their purchase price back by $50,000 to $100,000 knowing they would be going over the asking price significantly.
“We ended up going about $75,000 over asking price, which is still insane,” she said.
