The Austin Home Buying Primer
A median home price increase of $100,000 in six months, homes selling for $300,000 over asking price, and waitlists for new homes going well past a year – that is the reality of the Austin real estate market. Unfortunately we don’t have a magic bullet for y’all to fix all of that (well maybe these recipes can ease the pain), but what we are not going to do is continue to click bait the home buying process.
Over the past weeks and months we have received countless emails, DM’s, and comments on what we think of the market. A few weeks ago through a series of IG polls we compiled your most asked questions, reached out to our Austin real estate friends and put together this guide. The most frequent questions were about finding new builds in and around Austin in the $400k-$600k range. We hope this helps and we hope to release future editions addressing other price ranges and types of homes.
Why The Craziness?
Austin has been a popular destination for people looking to relocate and is a hotbed for home buying due to its affordability and room for growth. Recognized as one of the top three most popular migration destinations according to a recent Redfin study, Austin’s suburban areas are a great place for entry-level homebuyers, especially as people continue to have flexible remote work situations.
With countless technology companies like Oracle, Apple, and Google opening new offices or expanding current ones, the creation of new opportunities for people to move to Austin is limitless. Add to that low taxes, great weather, and central location – you get a booming real estate market.
And then there is COVID…. We have seen a lot of in-migration into Austin and Texas in general, as families have left coastal states in favor of more affordable homes in Austin that also offer larger spaces and outdoor living areas. The home builders we spoke to are seeing more buyers seek out healthy home features in their search like better indoor air quality, cleaner materials and insulation that reduces the amount of small particles, pests and pollutants that can enter the house.
Low housing inventory in Austin’s competitive market, coupled with low interest rates, are fueling an all time high interest in new home construction. Additionally, newly built homes allow for more personalization and account for the latest trends such as open floor plans, energy-efficient, smart home features, and healthy home details. Indoor air quality continues to drive demand from buyers looking out for their family’s health. Add to all of that you get to be the first owner of the home!
New builds will tend to be based in newer communities on the outskirts (or outside of Austin) in communities where numerous builders will construct new homes. This allows for a natural look and feel to the neighborhood rather than the same handful of designs over and over again. To name a few:
We had the chance to meet with builders from Mertitage Homes at the Copperstone community. Copperstone is a new community conveniently located off FM 1626 with prices starting around $439,000. Situated just minutes from IH-35, this beautiful tight-knit community offers easy access to downtown Austin. Affordability is key to Meritage Homes, they say “Buyers can get more bang for their buck in the suburban areas and can afford more home for their money.”
We also visited with Brookfield Residential and toured their properties at Easton Park. We loved the sleek look of their interior and just this week they announced SunHouse at Easton Park. The project will be a partnership between Tesla and Brookfield. It will be the first Tesla solar neighborhood with each house in the development including solar-powered roof tiles and battery storage walls.
I am Ready, What’s Next?
The most popular question we get is, “I want to buy, what’s my next step?”
All the sources we spoke to recommend familiarizing yourself with your finances so you know how much house you can afford and what your budget is. Additionally, determine how much of a down payment you’re willing to contribute. Second, start gathering all your documentation. There’s a significant amount of paperwork needed to finance the purchase of a home and the more prepared you are, the better.
We also recommend getting pre-qualified and exploring mortgage options at this point. Once you have an idea of how much home you can afford, begin to create an ideal home wish list, with features that you must have and that you do not want in your future home. Next, you’re ready to do some research—luckily there’s a lot of resources online you can use to explore communities, floor plans and homes.
There is currently very limited availability when it comes to new homes ready for move in. Most people are on waitlists/waiting for new lots to be released. As the current communities fill up, new ones will expand outward into the surrounding cities. A typical new build takes at least 8 months but can extend out longer due to the supply and demand of materials (of course this may vary builder to builder). Remember, with new construction, there is always a possibility with delays. You have to be patient. Building a home is a process.
The Pro Tips to Keep in Mind
This article would not have been possible without the help of our friends Elizabeth Thomas, Aubrey Williamson, Meritage Homes, and Brookfield Residential. We can not state enough how helpful Elizabeth and Aubrey were in helping us understand the market, setting up appointments/tours, and being all around wonderful people. They are your go to for your Austin real estate adventure. Here we will leave you with some pro tips and considerations they shared with us:
- Where are the sub-$500k homes? North of Austin. Cedar Park, Round Rock, Pflugerville, Georgetown. All of these area’s will have newer and more affordable homes! Keep in mind, the more affordable the home in this current market, the more competition you will likely have.
- Floor plans are limited in neighborhoods based on builder and communities.
- Builders offer different things so research your builders and find the one that will work for you.
- Resale homes have character and charm, while new builds do not.
- Resale homes also have mature landscaping.
- New builds are expanding out from the city.
- Most new build communities are a part of an HOA. Please keep these extra costs in mind.
- With new builds you have to buy the lot first to reserve your space, then you have to buy the home on top of that with all of the upgrades/customization.
- When purchasing a new build, remember the costs start with a base price, which doesn’t include the upgrades. Plan to budget 20-30% extra to add on the upgrades/customization that you want for your new home.
- Most new builds are selling out almost immediately. Keep in mind to ask about the stock/inventory homes if you don’t care about the customization as much. You might be in luck.
- You might have to bid on 3-4 homes before you get one.
- Where is the market going? The consensus is that most of the dramatic market and price increases this year. The market will likely continue to climb, just at a more reasonable pace going forward.
- Happy Home Hunting!