What do you expect when an area is ranked as the second-fastest growing region in the United States?
A booming economic scene, wonderful diversity, a weather to soothe your body like a balm, delightful food for your palates, and some of the world's most famous music festivals.
Yes, if you thought that sounds like Austin, Texas, you are correct!
While these characteristics are alluring, what many people often overlook is Austin, TX real estate. Sure, the city's vibe is incredible, but finding a place to call your own here is the real treasure hunt.
While the neighborhoods are as diverse as their residents and the real estate market continues to thrive, there are a few lingering questions. How competitive is the real estate market? Is there potential in investing here?
Let's get some answers about the ins and outs of this dynamic market.
Austin's known for 'keeping it weird,' and that's just about good for the locals in the city.
Here's how the turns and twists in the city 'unsettle' the housing market:
After the wild ride of 2022, the Austin housing market decided to hit the brakes. Prices began to cool down with more homes available. Buyers and Austin movers could finally breathe a sigh of relief and not feel like they were competing in a demolition derby to land their dream home.
Even better news? The market's still going strong for buyers in 2024. Home prices are still taking a dip. The median sale price of a home in Austin is down 5.8% since last year. New apartments are still popping up all over the place, placing less pressure on housing costs.
Median Home Value: $536,800
Average 3-yr Price Change: +7.28%
However, the excitement level has cooled off a bit too. Higher interest rates in 2023 made homeownership feel out of reach for many would-be buyers. However, mortgage rates are still hanging out in the mid-6% range, which is still a bit of a challenge for some.
If you can swing it, now might be your golden ticket to finding the perfect place to call home without breaking the bank, as Austin's home prices have been steadily climbing.
Note:
You can surely expect to pay a premium, especially in popular neighborhoods like downtown, South Congress, and East Austin.
In 2022, Austin was in a full-on construction frenzy — everyone and their cousins wanted a piece of the Texas dream.
Builders were working overtime to crank out new homes and apartments. Single-family houses were flying off the shelves faster than you can say "cowboy boots." People even started turning to condos and apartments instead.
But just when things were getting heated, there was a slowdown in 2023. According to the U.S. News and World Report, building permits hit a peak in August 2023 before everyone took a breather.
Single-family home permits took a nosedive after their August peak, and even apartment buildings slowed down a bit.
Note:
You should know that while the first quarter of 2024 didn't record any significant difference in apartment and condo prices, there was a 7% increase in the average rent of rooms.
From the hipster vibes of East Austin (or its proximity to downtown) to the suburban quiet of Westlake and the unmistakable affluence of Crestview and Bouldin Creek, there's a neighborhood for everyone.
Each area offers a unique slice of Austin life but comes at varying costs. For instance, in neighborhoods like North Burnet, renting an average-sized apartment might burn holes in your pocket, whereas it costs about 21% less in Bouldin Creek.
What this indicates is that the high rents in areas like North Burnet could mean high demand, limited supply, or both. Conversely, lower rents in areas like Bouldin Creek might suggest a more balanced or less pressured rental market.
Note:
Although there is an overall more balanced market in terms of inventory here, some Austin, TX neighborhoods have limited supply.
Texas has its own rules regarding real estate buying, and Austin is no exception.
Texas law strongly recommends a home inspection before finalizing the purchase. But to your advantage as a buyer, sellers in Austin have to meet the requirement to provide a disclosure notice detailing the condition of the property.
A potential downside to Austin, TX real estate is the high property tax rate (this depends on perspective). Since Texas has no state income tax, revenue is generated from property taxes.
Property Tax Rate: 2.21%
However, you might qualify for a homestead exemption from the Travis Central Appraisal District if the property is your primary residence, significantly reducing your tax bill.
Given the competitive market, having a mortgage pre-approval can give you an edge. A loan officer will review your finances and assess your debts to estimate how much you can afford to pay for a house.
Needless to say, you will need good credit to obtain financing or a mortgage pre-approval.
Many Austin neighborhoods have Homeowners Associations (HOAs) with specific rules and regulations.
The HOA fees range from $400 to $800.
There are limitations written into the deeds of some properties in Austin. They can control everything from the type of structures you can build to the color you paint your house.
Here are a few tips you can leverage to ensure you get the best deals in the Austin real estate market:
Each house for sale in Austin, TX, is unique, and a local real estate agent will have insider knowledge and connections that can make all the difference.
They can guide you through the process, help you find properties that meet your criteria, and negotiate the best deals.
Be prepared to make quick decisions in Austin if the house is in a highly sought-after neighborhood. On average, homes in Austin sell after 51 days on the market. However, homes in hot areas may close deals within 27 days of listing.
Most suburbs of Austin, TX, are growing rapidly. Areas that are less popular today might be hotspots tomorrow. Consider the long-term potential of the neighborhoods you're considering.
The Austin, TX real estate market trends show declining prices and increased inventory making it more buyer-friendly, despite the challenge of high interest rates dampening buyers' enthusiasm.
Its neighborhoods also vary widely in cost, with some areas experiencing higher demand and limited supply.
In this kind of competitive market, quick decision-making and mortgage pre-approval will give you an edge. Also, be aware of local regulations, including home inspections and property taxes.
The best advice for whoever needs a property here is to work closely with a local real estate agent to navigate this market.
Good luck!
