Austin, Texas is currently home to America’s fiercest bidding wars. Many homes are selling for more than $100,000 over asking. Sami Sparber reports in The Wall Street Journal:
A homebuying frenzy is gripping much of the U.S., but Austin takes the prize for the biggest increase in homes selling well above the asking price.
Nearly 2,700 homes in the Texas capital have sold this year for $100,000 or more above their initial listing price, according to an analysis by Redfin Corp. that examined sales through Aug. 11. While a few other U.S. cities have had more properties sell at that premium to the asking price, none have experienced as big a percent rise in homes transacting at that lofty an increase, Redfin said.
“As a consumer, it seems scary to be in a housing market where the home you’re looking at [is] priced at $400,000, then, when you go to put in an offer, you realize the true price is $500,000,” Redfin chief economist Daryl Fairweather said.
The number of homes sold year-over-year for at least $100,000 over asking price has grown nearly 10-fold in Seattle, and fivefold in Oakland, according to Redfin. In Austin, that figure grew by 57 times the number for last year at this time.
The jump in these sales at six figures above the listed price shows how Austin, which has attracted young professionals for years, has become an even more competitive place to buy in recent months.
Startup companies have been flocking here, fueled by the city’s robust job growth, music and cultural scene and amenities such as hiking trails and water sports like kayaking. The city is attracting tech employees and other remote workers from more expensive places like the Bay Area and New York City. Austin is now higher-priced than most U.S. cities, and its cost of living has surpassed that of more cosmopolitan Houston and Dallas. Yet to buyers arriving from Manhattan or San Francisco it often looks relatively affordable, enabling these new residents to bid up home prices.
Bidding wars are breaking out across Austin. Earlier this year, prospective buyers waited in lines that snaked around the corner to view popular homes. Others offered impassioned personal pleas and shared their family stories in hopes of landing a hotly contested home.
In the hottest U.S. housing market in years, many sellers are transacting above their initial ask. In May, a record high of 50% of U.S. homes sold for more than their list price, Redfin said, reflecting how the pandemic and the rise of remote work has led many buyers to seek homes with more space or in cities and towns farther from their offices.
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