- Home prices are still soaring nationwide, especially in Austin, Texas.
- Austin prices rose 39% since last year to a median price of $485,000, Redfin found.
- People relocating from major cities - particularly San Francisco - has contributed to the boom.
- See more stories on Insider's business page.
There may be some encouraging signs that the real estate market is calming down, but housing prices are still climbing - especially in Austin, Texas.
That's according to a new report from real estate site Redfin, which tracked home prices nationally over the past 12 months. Redfin found that in the Texas capital, home prices rose 39% since last year to a median price of $485,000. That increase was the highest among the 85 biggest metro areas Redfin tracked.
Not only has the median home price risen, but the number of homes selling for significantly over asking price has as well. In 2021 alone, nearly 2,700 Austin homes have sold for $100,000 - or more - over their listing price. And since last year at this time, the number of homes that sold for at least $100,000 over asking increased by 57 times, The Wall Street Journal reported, citing Redfin data.
Austin has seen an influx of new residents over the course of the last year, many of whom are paying well above asking price. People relocating to the region pay, on average, 7.8% over asking when they buy a home, compared to local buyers, who pay an average of 3.7% over, Redfin found.
Out-of-towners have been contributing to the Austin real estate boom for years, but that has shifted into high gear during the pandemic, Sean Waeiss, a broker and the owner of Wise Property Group in Austin, told Insider earlier this year.
"Austin is a market that's attractive to the San Francisco, the Los Angeles, the New York market, even the Miami and Chicago market," he said. "It's got good weather, it's a young city, vibrant, we've got a good culture, live music, and it's more affordable than all those places I just mentioned."
Plus, workers can now do their jobs remotely, or find work at firms that have been in the Austin region for years, companies like Dell, IBM, Samsung, Applied Materials, and Texas Instruments.
Waeiss also noted that you can get more for your money in Austin if you're relocating from another major city. Some buyers have equity in a tech company like Facebook or Google, or have sold a million-dollar house in the Bay Area, and are able to spend big in Austin. Others are paying about the same mortgage as they did in other cities, but their square-footage has doubled, or they can have a yard now, he said.
All these factors combined have led to the soaring sale prices, bidding wars, and low inventory Austin has seen in 2021, Waeiss said.
"Austin's not a little secret anymore," he said.
Home prices are still high nationwide
The Austin prices align with a continued rise in home sales nationally.
Redfin found that the median price of houses sold in July 2021 rose 20% from the same time last year, reaching a new high of $385,600.
Redfin noted that the annual growth rate hit a high of 26% nationally in May, which means that overall, that rate is slowing slightly. But July marked the 12th month in a row of double-digit increases, and the median home price is still higher than any other time on record before April 2021, Redfin found.
Daryl Fairweather, Redfin's chief economist, said in the report that while there are some signs the market is improving for buyers, prices are still significantly higher than pre-pandemic levels.
"Home prices are still soaring at an astonishing rate," Fairweather said.