Is It a Good Time to Sell in Austin, Texas?

"Is it a good time to sell in Austin, Texas?" This question lands in my inbox weekly from friends, family, and clients. Really what people are asking is should I sell now or should I wait?

Why Timing the Market Doesn’t Always Work

Many property owners dream of "selling when the market is high." I remember countless clients who were excited to sell during what seemed like the peak in 2021, only to watch the market climb for another full year. Those sellers didn't actually sell at the top, even though it felt like the peak at the time.

Here's what I've learned after years of doing this: trying to time the market perfectly is like trying to catch lightning in a bottle. You can't sell at the absolute top and buy at the absolute bottom any more than you can with stocks. Smart property owners stop worrying about perfect timing and start focusing on what actually matters for their situation.

Asking the Questions that Really Matter

When someone asks me about timing, I try to ask questions that will get us answers that actually matter for their decision:

1. What’s going on in your life?

Are you retiring and want to downsize? Got a job transfer? Need more space for kids? Your life doesn't wait around for the perfect market conditions. I've seen people miss out on great opportunities because they were waiting for some magical market moment.

2. How much do you actually owe?

This is huge. If you bought your house 10 years ago, you probably have a ton of equity and can be pretty relaxed about timing. But if you bought at the peak in 2023? You might be looking at a loss or even bringing cash to closing. Your situation is totally different.

3. What would you do with the money?

What else could you do with your equity? This is where the math gets interesting and often reveals the best path forward!

Why When You Bought Matters So Much

If you bought recently, especially in 2023, you're probably feeling pretty nervous about selling right now. You might not have much equity built up yet, and depending on what's happened with prices, you could be looking at taking a loss. That's a completely different situation than someone who bought their place back in 2010.

Long-term owners have way more flexibility. They've got equity built up, they're not as stressed about every little market movement, and they have more options.

Real-World Decision Making: The Numbers Tell the Story

Let’s look at two recent client scenarios that show how this analysis works in the “real world”:

Scenario 1: The Long-Term Owner

A client who owned his property since 2006 had no mortgage and approximately $800,000 in equity. His rental income was generating about 8% annually after taxes and expenses. At the same time, 10-year Treasury bonds were yielding around 5%.

His choices were to continue earning 8% from his rental property, or sell and put the money in bonds for a guaranteed 5%.

In this case the decision was fairly easy, he kept the property because it was already beating what he could get anywhere else with zero risk.

Scenario 2: The Retirees

Another couple owned their primary residence outright and were considering selling to move to the Hill Country for retirement. They would net about $1 million from the sale.

We looked at the opportunity cost: if Austin real estate appreciated 3-5% annually, they'd gain $30,000-$50,000 by waiting another year. However, investing that $1 million now in 10-year Treasuries would guarantee $50,000 annually for the next decade.

The guaranteed income stream won out over speculation on continued appreciation. They sold and moved forward with their retirement plans. Sometimes the bird in the hand really is worth two in the bush.

The Leverage Factor

If you're highly leveraged (meaning you still owe a lot on your mortgage), the math can look totally different. Let's say the Austin market goes up 4% next year and you put 20% down on your house. That 4% market gain could mean a 20% return on your actual cash investment.

In that case, waiting might make sense, especially if your alternative is just parking money in bonds at 5%. But you're also taking on more risk by staying in real estate versus guaranteed returns.

Here’s What I Think

Real estate is personal and whether it's a good time for you to sell depends entirely on your unique situation. Your stage of life, financial goals, current leverage position, and overall investment portfolio all factor into this decision more than general market conditions.

Stop trying to time the market perfectly and instead, ask yourself: 

• What's happening in my life right now? 

• How much equity do I actually have? 

• What would I do with the money if I sold? 

• How does this property fit with everything else I own?

The "perfect" time to sell is when it aligns with your personal and financial objectives—not when a talking head on tv says the market is right.

Want to figure out if now is the right time for YOU? Give me a call - I’d love to chat and run the numbers together.

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We are delighted to be your guides to Austin and Austin real estate!

Cheers,

Jen & the team

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