Laurie Flood is a Northwest Austin Realtor backed by Keller Williams Realty. She works with both homebuyers and sellers.
Some Austin-area homeowners have received texts and calls from individuals offering to purchase their homes. Is this a scam? What is the top priority for selling in today’s market?
It’s not necessarily a scam because those people will buy their home (or know someone that will). Unfortunately, they are only looking for a ‘deal’ and have no intention of paying full market value for it. Now more than ever, sellers’ motivation should be doing everything they can to capture the highest sales price. Anything not over-priced sells quickly, but I’ve never seen such large sales price spreads between similar homes. Those homes that really capture the buyer’s attention get many offers and are bid up much higher than those that may only get one or two offers and sell for much less. Properly preparing the home, combined with excellent photography, staging and marketing can easily push the final sales price up 10% over a similar home.
How accurate are market assessments provided by home inventory websites and phone apps? How do realtors work with information like this?
Those assessments are further off than ever. In a very steady market those can usually be within 5%-10% of most home’s value. In this dynamic market, home prices are less predictable. If a home for sale gets five competing offers, then the sales price is likely to be higher for a similar property that only received one offer. It’s not unusual to see 10% sales price differences for similar properties. Computer algorithms can’t predict what caused the disparity the way an experienced Realtor can. Realtors don’t spend too much time dealing with these automated values. It’s just raw data and an objective opinion. The home is where people spend most of their time and have a much more subjective value. An experienced Realtor can not only understand why one property may be more appealing to buyers than a similar property but they can also help the seller prepare their home in a way that will appeal to the most buyers.
Austin’s real estate market is experiencing record growth, but are there warning signs of a “housing bubble” at risk of bursting? What are the consequences of that?
There is always concern about a ‘bubble,’ but the cause of this run up—more people wanting homes than there are places for them to live, and builders unable to keep up with demand—is not going away anytime soon in fast-growing Austin. Because of this, I expect it to be more of a plateau of prices or slight drop as opposed to a major drop in prices. I recently looked at the last 30 years of Austin home prices and the largest year-over-year drop in prices we saw was just over 1%. This included the dotcom bubble and subprime real estate bubble, which were both significant events in Austin.
Because of the recent run up in prices, I expect to see a deceleration of prices going forward. Also, within the last week or so, there has been an increase in inventory in Northwest Austin like we have not seen in months—so there is a bit more for buyers to look at. The competition for available homes is still challenging, but it’s not as intense as it has been.