If you’ve paid any attention to the news, internet memes, or anyone who owns a home over the past year, then you know home values have skyrocketed across the country. It’s hard to pinpoint another time in history when the housing market has more heavily favored sellers — which makes this a difficult time to buy a house in Austin, Texas.
While the real estate market is crazy across the country, the Austin real estate market is even crazier. Austin homes for sale often sell in just one day for above their listing price. Many sellers host a single open house, collect multiple offers, pick the best one, and sell without doing a single private showing.
So, what’s going on in the Austin area, and what are prospective home buyers supposed to do? We’ve got the insider info you need to understand Austin’s booming housing market, decide whether now is the right time to buy, and figure out how to navigate this difficult market.
Why Is It So Hard to Buy a House in Austin?
According to National Mortgage News, Austin, Texas, is the fourth hottest housing market in America. The city’s booming tech industry has led to an increase in jobs, which is drawing young professionals to the area.
On top of that, Austin’s culture and food scenes are attracting residents who can work from anywhere. And because Austin is still more affordable than other culture capitals, like New York and Los Angeles, its appeal isn’t likely to wane anytime soon.
According to the Austin Business Journal, an average of 116 new residents moved to Austin each day in 2021. More residents means more demand for Austin homes. And that increased demand has come at a time of low supply.
The United States is currently experiencing a housing shortage — with nearly 4 million fewer homes than are needed to meet national demand. This shortage was partially caused by the housing market collapse of 2008 when new construction abruptly stopped. But, the problem has been exacerbated by rising material costs, and material and labor shortages.
And if we all know one thing about economics, it’s this: When demand is high and supply is low, prices soar. And home sales prices in Austin are doing just that. Within Austin’s city limits, it’s difficult to find single-family home prices under $350,000 — a price that will likely only get you a 2-2, miles away from downtown Austin. The majority of entry-level homes are priced closer to $500,000.
So, Is Now the Right Time to Buy a House in Austin?
With the odds (and the prices!) stacked against home buyers, many who have the means to buy are left wondering if they should.
While it’s certainly a frustrating time to try and purchase a home — you should expect to make multiple offers before one gets accepted — experts say there’s no sign prices will drop anytime soon.
Unlike the housing market before the 2008 financial crisis, current high prices are not a sign of an economic bubble. Prices are high because of the supply and demand issues we mentioned above, and it could be years before new construction catches up with demand — which means prices will remain high and will likely continue to increase in the meantime.
So, based on the current market, waiting will be as much of a gamble as buying.
Tips to Win Your Austin Dream Home in This Housing Market
Here’s a hard truth: In this market, you may not get your first dream home or even your second. But if you keep searching, you’ll find many homes you love in the Austin area, and one of your offers will get accepted. The tips below will make your house hunt go a little smoother.
Make Your Wish List
Sure, every homebuyer in Austin wants a turnkey home in Barton Hills or a trendy build just off The Drag on Leon St., but there may come a time in your home buying journey when you have to decide what’s more important to you: a perfectly maintained house or the perfect neighborhood.
That doesn’t mean you shouldn’t put both your dream features and your dream location on the wish list, but your house hunt will go more smoothly if you prioritize your list. Divide it up into “must have” and “nice to have” features.
Your must-haves might include a location that’s less than 20 minutes from your office. Or maybe you’re the practical type who wants a new roof and an AC that’s less than 5 years old. You might be dying for original hardwood floors. Or maybe you’re willing to accept a house with 1970s pink tile in the bathroom as long as it’s in a central Austin location.
Know what features you need and what features you’re willing to sacrifice before you start your search.
Shop With Your Head, Not Your Heart
Don’t fall in love too quickly. Buyers who decide that a certain house is the only house for them are more likely to spend too much and overlook important issues (like that moldy smell in the basement), which could cost them in the long run. There’s always another, equally amazing Austin home out there.
And in this market, when many buyers’ have to make multiple offers before having one accepted, homebuyers who fall in love fast are in for a lot of heartbreak.
Get Your Down Payment Ready
If your down payment is currently tied up in an investment account, it’s time to move it to your bank account. Yes, it could be months before you need it, but buyers who can put money down right away are more likely to have their offer accepted.
Find a Real Estate Agent
Every buyer should work with a realtor. Real estate agents help buyers navigate the housing market, including getting pre-approved for financing, finding potential issues in each home, understanding all the paperwork, and finding a brokerage firm to manage your closing — and they do all this at no cost to you. They make their money by taking a commission on the home you buy, so they get paid by the seller.
To find an experienced agent ask friends and family for referrals, or look through the Austin Board of Realtors directory. You can also work with the Austin branch of a nationally renowned real estate agency, like Coldwell Banker Realty Austin or Keller Williams Realty Austin.
Set Up Alerts
Yes, your realtor will be monitoring new listings on your behalf, but to make sure you see the new homes that interest you as soon as they come on the market, you should save search parameters on both Zillow and your real estate agent’s MLS (multiple listing service). Enable alerts so you know as soon as something becomes available.
In this market, houses often come onto the market and sell the same day. So if you see a house you like, request a showing as soon as possible.
Look at New Construction
New homes are being built everyday. When you buy a newly constructed home, you’ll know everything is new — from the roof to the kitchen appliances — which means you won’t have to worry about making expensive replacements right after you’ve made the most expensive purchase of your life (your home!).
But because of the surging cost of building materials and shortages in both labor and supplies, you’ll need to be patient. There could be long wait times while your new home is built.
Think About Square Footage
If you feel like you’re being priced out of the Austin real estate market, it’s time to think long and hard about the number of square feet you need. A smaller home may require you to clean out your closet, but it will get you into the housing market and help you build equity.
You may also have an easier time affording a townhouse than a single family home. A 1,400 sq ft townhouse often costs less than a 1,400 sq ft single family home, so this layout could make for a more affordable starter home.
Look in Up-and-Coming Neighborhoods
The closer you are to Downtown Austin, Barton Creek, or South Congress, the more expensive homes will be. Take some time to explore the up-and-coming East Austin, Allandale, and North Austin neighborhoods to decide if they’re right for you. If you choose one of these amazing Austin neighborhoods, you’ll still have easy access to central Austin but will be able to get a bigger home for the money — or just find a home that’s within your budget to begin with.
Check Out the Austin Suburbs
Austin’s suburbs have some of the best school districts in Travis County, and tend to have lower housing prices in addition to their great schools. The suburbs to the west of Austin are also closer to Lake Travis, which will offer plenty of weekend recreation.
Start your search for the best Austin burbs by exploring Round Rock, Pflugerville, Leander, Bee Caves, and Buda. These are some of the more affordable neighborhoods where you can buy a house in Austin.
The Austin Housing Market Is as Hot as the Weather
And it doesn’t show any signs of cooling off. With prices soaring, anyone who wants to buy a house in Austin will have a few frustrating months ahead. But, determined buyers are still managing to find their dream home.
To get an edge in this competitive real estate market, you need to remember: New houses come on the market every day. If your first, second, or third offer doesn’t get accepted, it doesn’t mean your house hunt is hopeless. Your home is out there.
Instead of getting discouraged, double down. Make your home buying journey an adventure. Spend your weekends exploring different Austin neighborhoods, discovering new favorite areas, and expanding your search. Happy hunting!
Comments are closed.
[…] a result, trying to buy a house in Austin is harder than ever. Many Austin homes are selling for above listing price on the first day […]