Hindsight is actually 2020: A review of Northwest Hills Home Sales
When COVID-19 first hit Austin on March 13th, I thought the real estate market would take a nose dive. While there was a month or two of slow down, pent up demand led to a sling shot recovery that resulted in yet another year of fast home sales and rising prices in Austin. But exactly how did 2020 (the year of the mask) impact real estate sales Northwest Hills?
As a Doss dad myself, I find our local statistics particularly interesting, so I crunched the numbers to bring you the inside scoop. Here are some of the highlights, with more details below:
- 67 of all single family homes (55%) in the Doss Elementary attendance zone went pending in 7 days or less.
- 38 single family homes (31%) sold for over $1M dollars.
- The most expensive home in the neighborhood sold for $1,835,000.
HOW MANY HOME SALES OCCURRED IN NORTHWEST HILLS IN 2020?
Neighborhood labels like “Northwest Hills” can mean different things to different people, so to make sure we are all talking the same language I focused only on those Northwest Hills homes that feed into the Doss Elementary attendance zone.
A total of 200 Doss Owl homes changed hands in 2020. That’s 30 fewer homes than sold in 2019. Yet, I caution you to not read the reduced number of sales as lower demand for two reasons.
First, this is a reflection of Austin’s ongoing low housing inventory problem. To put it in context, in December, the city only had 1.1 months of home inventory (meaning the number of homes for sale). In my 25+ years of experience, that’s an all-time low. There just aren’t enough homes for sale to meet the demand of potential buyers.
Second, I believe the pandemic caused many folks to change their plans to sell. Many homeowners shifted to working at home, schooling at home, and everything in between. Homes became more important than ever before as we adjusted to the pandemic, and many people decided not to make a change during such uncertain times.
In 2020, homes moved fast. While 39% of homes went pending their first week on the market in 2019, that number climbed to 55% in 2020. Moreover, most Northwest Hills sellers got what they asked for:
- 24 homes sold for asking price,
- Most sellers got 5-10% over their asking price, and
- 1 home sold for 14% over the list price.
That said, the biggest drop in Northwest Hills sales was felt in the condominium category. I saw this same trend throughout Austin. I’m not sure if it’s because people sought living arrangements with less density during the pandemic or because of greater job instability or some other reason. Your insights are welcome.
Keep in mind that I pull this data from the Austin Board of Realtor’s Multiple Listing Service (MLS) which does not include private or off market sales. We personally handled a significant number of off market sales in Northwest Hills, and I’m sure my Realtor colleagues did as well. Because of that, the total sales are probably higher than these statistics reflect.
HOW DID NORTHWEST HILLS HOME PRICES CHANGE DURING THE PANDEMIC?
The portion of Northwest Hills that feeds into the Doss attendance zone saw a 10.13% appreciation increase with the average single family home costing $948,521 -- more than two times the appreciation rate of 2019. That’s a nice return if you look at your home as an investment, but not so nice when it comes to paying property taxes…
While 10% appreciation isn’t sustainable over the long run, I expect this trend will continue for 2021. I just don’t see anything slowing it down. Here’s why:
- On a national level we are likely to see robust economic growth in 2021 with the Fed predicting 4.2% growth and Morgan Stanley forecasting 5.9%.
- On a local level Austin continues to attract more businesses and have a lower unemployment rate than other parts of the U.S. Our lack of income tax is also appealing to out-of-staters. Plus, Austin is just a cool place to live. All of these factors will continue to drive our net migration up.
- Many industry observers believe mortgage rates will remain below 3% in 2021 as the Fed uses low rates to combat the economic effects of the pandemic. Lower interest rates equate to more buying power and more demand.
- More businesses are extending their work from home period and some are even making it a permanent arrangement. As a result, the demand for a home that meets a multitude of needs is unlikely to decrease.
If you disagree, I’d love to hear your thoughts.
WHAT DID THE SALE PRICE LOOK LIKE FOR SINGLE FAMILY HOMES?
Last year I reported that if someone wanted a nice 3,000 square foot home with at least four bedrooms and a yard, they could expect to pay $900,000. In 2021 that price has jumped to $1.025M.
SINGLE FAMILY HOMES
average sales price
median sales price
% of original asking price
# sold vs. didn’t sell
112 vs. 18
134 vs. 23
127 vs. 43
165 vs. 28
Price per foot never tells the whole story, but it is something I’m asked about often. With prices creeping up, our Doss homes have a new baseline of around $250 to $450 per square foot, with $326 being the average. Overall, price per foot in our neighborhood tends to breakdown like this:
- $332 a foot for average home,
- $370 a foot for nice home with some updates,
- $450 a foot for something special like a nice view or large lot, and
- $520 a foot for new construction.
And please remember, these are just stats. Every house is different, and every sale is unique. Please reach out to someone with extensive experience in the Central Austin market to consider how this data can impact your personal situation.
The most expensive home by price per foot went for $557 per square foot in 2020. This fantastic home had a spectacular view of the hills, a swimming pool, and a great location in the center of the neighborhood. The most expensive home by overall price was a new construction property on a large interior lot near Doss Elementary School.
On the other end of the spectrum, the least expensive home in the Doss attendance zone sold for $272 per foot and went for around $500,000. This single family home was a total fixer upper. It also had the worst closed to list price ratio of just 91%.
As prices rise, so too does the number of million dollar home sales. In 2020, 38 out of the 122 single family homes that sold in the Doss attendance zone went for over $1M. That’s 31% of the home sales, compared to 21% of homes in 2019, 17% in 2018, and 14% in 2017. If we had reliable off market sales data, I expect this number would be much greater.
HOME SALES AT OR OVER $1M
Total single family home sales
Single family home sales over $1M
% of sales over $1M
But what exactly does $1,000,000 buy you in Northwest Hills? These days a $1M home looks a lot different than you might imagine it would. What you may picture as being a $1M home is now going for $2M+. For $1M in the Doss attendance zone you get around 2,500 – 3,300 square feet in a partially updated home. About half of the $1M+ sales had pools, some had views, and all sold quickly with a median of 4 days on the market.
HOW DID HOME SALES LOOK FOR NORTHWEST HILLS CONDOS AND TOWNHOMES?
It was another good year for townhome sales. Prices inched up, and 100% of all listed townhomes sold. I continue to think Doss-area townhomes are undervalued relative to what you can get in Northwest Hills or Austin in general. That makes them a great choice for folks wanting to get into the neighborhood without the higher price tag.
average sales price
median sales price
% avg of original asking price
# sold vs.
All 23 sold
21 vs. 3
22 vs. 4
23 vs 2
20 vs. 9
While the number of condominium sales declined by approximately 19%, the average sales price increased by just under 14%. Moreover, the number of condos that sold compared to those that didn’t sell also went up by 15.44%.
average sales price
median sales price
% of asking price
# sold vs.
58 vs. 3
75 vs. 12
60 vs. 13
58 vs 7
48 vs. 45
WHAT’S POPULAR AMONG SINGLE FAMILY HOMES IN NORTHWEST HILLS?
I continue to see a strong desire to find an updated home that is move-in ready. As a result, newly constructed homes are the most sought after, and many of those sales are occurring off market. Only three new construction sales were reported in the MLS during 2020, but I personally know of many more that sold privately. Of the Northwest Hills data available on those three new construction homes, prices were well over $1.7 million. As 2021 kicks off, I expect those prices will continue to push the two million dollar mark. Indeed, I have a crush on a new $2.2M home that’s just beginning construction within easy walking distance to Doss Elementary.
For existing homes, buyers are willing to pay a premium for modern features and on-trend finishes. Floor plans that have good traffic flow and flexible spaces, ample storage, natural light, and reasonably sized bedrooms and closets top most wish lists. For homes in the Doss attendance zone, swimming pools, big yards, and views are also a significant draw.
It also pays to invest in some basic improvements to your Northwest Hills home before you put it up for sale. I know that not everyone has the money on hand to make updates before selling. If that’s the case, let me know. Through my affiliation with Compass I have a few programs available that can help cover the upfront costs for updates, as well as programs to help you bridge the gap as you move from the home you have to the home you want. I don’t make money on either program; I just want to make sure everyone has the opportunity to maximize their sales price.
SO WHERE IS THE NORTHWEST HILLS REAL ESTATE MARKET HEADED IN 2021?
Despite a pandemic, our 2020 real estate market proved to be remarkably strong. I expect that real estate sales will be just as strong or stronger in 2021 across the city of Austin.
As for here at home in the Doss attendance zone, I think we will see continued growth and demand. While a 10% appreciation rate seems crazy, I don’t see anything that is going to slow down the dynamics of our market in 2021. Our larger lot sizes and rolling views are appealing to those that want a little more room to stretch out or build anew. And like it or not, we will continue to see the complexion of our neighborhood change as original homes are torn down and replaced with larger, more modern styles. This updating will increase the average size and sales price of our homes. Plus, our close proximity to both the north tech corridor and downtown offices are appealing to many buyers. And of course, the re-opening of our beloved and new Doss Elementary School is an added attraction. Go Doss Owls! All in all, it’s a recipe for another historic sales year.
IF YOU ARE A SELLER: I typically counsel clients to hold on to your property if you can and let those long-term appreciation rates make you more money. That said, in my 25+ years of experience I have never encountered a market with this level of demand. If you’ve been considering selling, this really is the time. Case in point, we are seeing homes with lines of people waiting over an hour to see them. One home in Brushy Creek got 96 offers its first two days on the market! Personally, I am fielding tons of calls from families looking to move into Northwest Hills, and we are getting multiple calls a day from our Compass colleagues in California looking for investment opportunities. It’s unprecedented.
Even in a hot market, there are things to think about. I like to use the seasonality of the market to maximize your sale as prices are often 6 – 8% higher in the spring than they are in the fall and winter. Marquette and I can also offer you some valuable advice about preparing your home for market. Painting, cleaning, landscaping, and staging are important as buyers’ place a premium on move-in ready homes. As for pricing, don’t get too aggressive. I can walk you through the different pricing strategies to make sure you come out on top.
IF YOU ARE A BUYER: Be ready to buy when the right opportunity comes along. There are not very many options available to you these days, and we don’t see that changing any time soon with more jobs coming to town and fewer people leaving. Keep an eye on homes that come available, be prepared to act quickly if you see a home you love, and get ready to be strategic in your offer to beat out the competition. Also, find a Realtor that knows how to source homes that are off market. If timing isn’t an issue, hold off buying until the fall when prices may be a little softer. When you’re ready, I’m here.
LIKE WHAT YOU READ? LET’S TALK.
Marquette and I live and work in Northwest Hills, and you’ll likely see us walking in the neighborhood with our two Doss Owls and our crazy dog. If you’ve got questions about anything in this report, we’d be glad to have a Zoom call or a front yard chat with you. No BS and no sales pitch, but plenty of geeking out over real estate. We look forward to visiting.
© Homesville Realty Group 2021
Curious what homes are for sale in Northwest Hills in the Doss Elementary attendance zone?
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