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Austin home prices keep setting records, worsening buyers' challenges

The median sales price in the city of Austin and the Austin-Round Rock metro continue to climb, according to the latest monthly market report from the Austin Board of Realtors. (Emma Freer/Austonia)

Another month, another double-digit increase in Austin's median home sales price.

The median home sales price in the five-county Austin metro increased 41.6% year-over-year, to an all-time high of $460,000, in April, according to the latest monthly report from the Austin Board of Realtors. In the city of Austin, the median home sales price increased at a slightly less dramatic rate—31.7% year-over-year—to a significantly higher price: $550,562, also an all-time high.

For prospective homeowners, it likely means an even more arduous buying process. "Homebuyers are having to get creative as the Austin housing market continues to be competitive," John Schutze, regional director and senior home loan officer at Texas Loan Experts, said in a Tuesday press release accompanying the report. "Potential buyers must be prepared to have a source of extra funds to make up for potential appraisal shortages."

High demand and low supply have been driving up Austin home prices for years. Since last summer, however, this dynamic has grown more acute. As a result, it is increasingly common for prospective buyers to face dozens of competing offers, many of which are well above the asking price, and to receive an appraisal value less than their offer price, which can drive up their down payment.

Because of the steep competition, many buyers are also waiving an appraisal, which means they commit to buying a home even if it receives a low appraisal, in an attempt to convince the sellers that they are serious. Sydney Schuster, a realtor at Open House Austin, recently told Austonia that this is the case 98% of the time.

Despite these challenges, aspiring homeowners have some reasons to be cautiously optimistic. "Austin-area housing inventory was slightly higher in April than in March," ABoR President Susan Horton said in the same release, "and the pace of home price appreciation month to month is slowing, indicating that the rush on the housing market at the beginning of the year could be easing."


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