What makes Austin real estate buyers happy? The answer may surprise you. What apparently doesn’t make a buyer happy is a rock bottom price at a 4.37% interest rate. If that was the case, there’d be far less buyer angst and hand wringing than there is now in the Austin real estate market. We’d have far fewer buyers in Austin flaking out on home purchase transactions for no good reason.
No, buyers are happiest in a seller’s market, winning a multiple offer bid-up against 5 competing buyers, and paying 10% over market value at 6.25% interest, and happily covering the appraisal shortage with additional cash at closing. This is not a joke, I’m dead serious. The latter 6.25% buyer feels victorious and ebullient about the purchase. The former 4.37% buyer feels like, perhaps, a mistake was made.
Austin buyers were much happier in 2007, at the peak of the market, when they had a lot less to pick from and had to work a lot harder to find a home. Buyer remorse, buyer finickiness, buyer flakiness, and just plain old cold feet existed to a far lesser degree in the harsher buying environment of 2007 than in the buyer’s dream market of today. Don’t believe me? Go ask any production Realtor in Austin. By “production”, I mean, go talk to Realtors who are busy and closing deals every month, like me and Sylvia. Ask listing agents if it’s a lot harder to get deals across the finish line today than 3 years ago, notwithstanding loan impediments, just purely from a buyer emotion standpoint. They’ll tell you it is and they’ll have stories of buyers backing out for frivilous reasons, or, in some cases, no stated reason at all.
This doesn’t make sense, I know. So what’s going on here? Why all the buyer angst?