At this point, it’s a no-brainer that COVID-19 has affected our lives in so many ways. Instead of visiting the local swimming holes and catching live music downtown, we’re sequestering away in our homes, which have become virtual isolation pods — and where we’ll remain for the foreseeable future.
But even amid all the quarantining, there are plenty of folks who are still buying and selling homes. Some first-time buyers are especially feeling the pressure to buy quickly, fearing higher sale prices if they wait too long, while others are worried about the outlook of those prices in the long run. So what can you expect from the Austin housing market if you’re looking to buy?
How Has Covid Has Affected the Austin Housing Market So Far?
During a recession, household incomes drop, which means people are much less likely to make large purchases — especially a new home. As a result of fewer people buying, homeowners are in turn less likely to put their homes on the market, which means home sales decrease and sellers may be tempted to drop their price to sell faster.
We have seen this trend begin here in Austin. There are still plenty of homes for sale here — just not as many as there should be. And because there’s not a ton of inventory on the market these days, they’re getting bought much more quickly than they did in pre-COVID days. In fact, while the average turnaround time used to be about six months, it’s now about 30 days. The reason for the shortage? Homeowners are holding on to their properties to avoid a major financial risk. Plus, many don’t want to expose themselves to the potential dangers of the social interaction that’s involved with house hunting.
But the changes are more widespread than just a drop in available properties. Here are some other ways that COVID-19 has affected the housing market:
- Builders are struggling to manage a backlog: When the economy shut down for a few months, the building sector was affected in a big way. Many builders were already trying to catch up with the demands of a pre-pandemic housing shortage. Once Covid hit, stay-at-home orders required a pause in construction, which further complicated their work. For others—especially new and struggling builders—it was impossible to financially weather the storm, which caused them to go out of business entirely.
- Building materials are more expensive: Since April, the cost of lumber has gone up a whopping 80%, which means that a disruption in the supply chain is also causing delays.
- Home prices haven’t dropped: Austin is well known as the most expensive city in Texas — and unfortunately, home prices haven’t dropped since the beginning of the pandemic.
So, to recap: as a result of COVID-19, there are now fewer builders to choose from and fewer properties on the market, and supplies are more expensive in general. That means that the pandemic slowed things down for the normally hot Austin housing market, and will most likely continue until the virus reaches its final stages.
Austin’s Housing Market: The Good News
Despite these changes, there’s still a surprising silver lining to the state of the current housing market — and as home builders we’ve been seeing it for ourselves every day. Although people are tending to physically keep to themselves because of COVID-19, the shutdown has also been an undeniable source of neighborly bonding that we’ve never seen before.
We’re seeing so many people reaching out to their neighbors in whatever way they can to help support the people in their community, whether it’s dropping off supplies for the elderly or at risk, or contributing to unexpected medical costs. We’ve also seen a surprising turnout at HOA meetings, with homeowners becoming more engaged and involved in an effort to be as supportive of each other as possible during such a difficult time.
It’s a wise reminder that purchasing a new home isn’t just about the aesthetic or the location, but also about the fact that you’ll be living in close proximity to others — which is why a harmonious neighborhood is key to a good quality of life. It’s a good time to invest in a community, because that community can quickly become a lifeline.
As home builders in Austin, Texas, we offer communities in two of the city’s most desirable locations — Scenic Point and McCormick Ranch. Contrary to our initial predictions, the Scenic Point community will likely be completely sold out by the end of year. If you’re ready to move into the community and home of your dreams, we’re here to help. Contact us today and let’s get started.