Keeping it Weird: How to Buy a House in Austin

We talked to experts in Austin real estate, researched neighborhoods in each of the nine major city regions, and analyzed the data to find the best recommendations for your budget and lifestyle. We put together this comprehensive guide to where and when you should be shopping, what’s the deal with Austin traffic (and why that one highway is called MoPac), why are there so few basements, and what you need to know about flood insurance in Texas.

Housing stock in Austin

Austin has all sorts of home options, from two-bedroom bungalows to Victorian mansions to high-rise condos to new construction. Top Austin real estate agent Richard Doyle, who has 15 years of experience in real estate sales, says that, as of around 2017, most of what’s available is new construction or rehabs.

Land is where the value is in Austin. Ryan Patterson, a rehabber, builder, investor and lender with 20 years of experience, says that one of the biggest trends from 2016 through 2020 involved developers buying old houses, tearing them down, and constructing new homes in their place. Patterson also runs a website connecting investors with private moneylenders, so he sees a lot of investor dollars changing hands.

Doyle spoke of the same thing.

“They’ll buy a 400,000 house, knock it down, and then put up a million-dollar home,” he says.

Doyle says that builders will even construct the exact same home in different neighborhoods and price them $50,000 to $100,000 apart depending on the location, which really does make a significant impact on price.

As for purchasing a newly constructed home or one that has been rehabbed, Patterson encourages buyers to do their homework. See what others have said about the company doing the rehabbing or building. “There are some house flippers,” he says, “that use all the tricks to get out as cheaply as possible.”

Floods and foundations: What you need to know

Will it flood?

Though not as frequently as Houston, Austin still sees its share of flooding every year. Texas storms are not to be trifled with, and rains can be intense in the area. Humidity stays pretty high throughout most of the year, too, so make sure your home inspection covers mold from leaky windows or foundations.

Most Austin homes don’t have basements because of flooding issues or because limestone, which is prevalent in Central Texas, is hard to dig through. According to Texas Monthly Magazine, another reason for the basement deficiency is the frost line, or how far down in the ground water freezes during winter. Essentially, there is no frost line in Central Texas, so builders don’t need to burrow very far, or at all, to lay a solid foundation. So if you don’t have to, why go through the trouble to do so?

When deciding on home insurance coverage, keep in mind that flood insurance is an add-on. As a general rule, most policies do not cover damage from flooding.

Something to build on

Homes in Austin are generally built on a concrete slab foundation or with pier-and-beam construction and a crawlspace. A healthy crawlspace can be a lifesaver (and a water damage saver) if your home sits in an area with a tendency for flooding. The Austin government site provides a handy online tool for homeowners and builders to see whether a house sits in a floodplain.

Termites love Austin as much as people do. A warm climate, leaky air conditioners or pipes, and damp wood call all the termites to your yard. Before buying a house, consider getting a termite inspection so you’re aware of any damage going in. The Austin government suggests performing a termite inspection every quarter. If you’re worried that your new home may already have some residents, consider a full pest inspection, which will look for evidence of termites, rats, squirrels (they love living in attics), and other intruders.

Speaking of leaky air conditioners, you want to make sure the house you’re about to buy doesn’t have any mold damage or, if it does, figure out why, whether it be a loose window or leaking roof or pipe and address the issue. Though not as humid as Houston, Austin doesn’t have a continuous dry heat, either. No matter what anyone tries to tell you, Austin is humid. And hot. A good air conditioner is essential, and an attic fan will save you hundreds of dollars in cooling bills.

Saving money is great, but don’t scrimp by not getting that home inspection as you could very well end up spending a whole lot more on unexpected repairs and issues. While it’s probably true that any older house will have some problems, be especially wary of sellers with selective memories and the possibility of cosmetic coverups (think painted-over mold damage).

The lay of the land in Austin: Bad traffic no matter where you look

Bad traffic exists everywhere in the city. Think about it: over a hundred people move to Austin every day. That’s a whole lot of cars. No matter where you buy a house in Austin, you’re going to have to deal with some traffic congestion to travel elsewhere in the city.

One of the city’s best features is the Colorado River that winds through south Austin. Running trails along the river stretch from all the way east at Pleasant Valley Road, through Zilker Park to the MoPac freeway. If you didn’t grow up in Austin, you’re probably trying to figure out which freeway is called MoPac and why. Save yourself some wondering; most Austinites don’t even know why it’s called that.

MoPac is what locals call the Texas Loop 1 freeway despite the fact that it isn’t even a loop. The name comes from the Missouri Pacific Railroad that, as good neighbors do, shared some of its land with the Texas Department of Transportation, who in turn used it to create the freeway,

Austin’s neighborhoods

Austin’s neighborhoods are as eclectic as the people who call them home. Geographically, the city is broken down into nine different regions. Each region, named according to its position from the state capital, consists of between six to fifteen subdivisions or neighborhoods.

Austinites pride themselves on being laid back, accepting, and quirky. They love to celebrate the oddities of life. True to the “Keep Austin Weird” slogan, just when you think you’ve got the city figured out and have seen it all, you discover another slightly bizarre attraction or place in a neighborhood you didn’t know much about.

In general, prices are higher as you move into town and they’re lower as you get away from downtown, said Doyle.

Here are the nine main regions of Austin proper and some of their more prominent features.

Northwest Austin

Balcones Woods, Avery Ranch, Anderson Mill, Canyon Creek, Grandview, Great Hills

Known for: newer homes, many built in the 1970s or 1980s, lots of views of the Texas Hill Country, high tech companies

The homes in Avery Ranch, — a planned community with a golf course, multiple community centers, trails, and a pool — have large yards and views of the surrounding countryside. Lakeline Mall, a major shopping center, is near Anderson Mill, the neighborhood south of the intersection of highways 183 and 45. Great Hills, Grandview, and Balcones Woods all have community pools, green spaces, and running, walking, and biking trails.

If you’re looking for a house built after 1970 in a neighborhood with some sweet amenities like Olympic-sized pools, tennis courts, and parks, you’ll love Northwest Austin.

“Many of the communities up north are building with everything included,” says Doyle. If you like the idea of not having to stray very far for, well, anything, an all-inclusive planned community might be for you.

North Austin

North Shoal Creek, Crestview, North Burnet, North Lamar, Lamplight Village, Allandale, Brentwood, North Loop, Wooten, Georgian Acres, Gracy Woods

Known for: lots of shopping malls and office buildings, but also some old neighborhoods still rocking the 1950s vibe with diners, gas stations, and coffee shops.

Because many veterans returning from World War II settled in North Austin, there are lots of 1940s and ’50s era homes in the area. Single people, empty nesters, and seniors find North Austin an attractive place to live, mainly because of the proximity to downtown shopping and entertainment.

If you happen to find houses for sale in Austin that back up onto Shoal Creek and love a backyard of tangled vines and trees sloping down a riverbank, definitely check it out.

Don’t be deterred by anyone telling you that North Austin is just a bunch of shopping malls and office buildings. There’s a lot of life there, too, in established, family-oriented neighborhoods. North Austin is also home to some great vintage stores like Room Service, where you can buy an avocado green 1970s lamp with a bakelite upturned flower shade or a 1950s-era framed embroidery flower map of the United States.

Northeast Austin

University Hills, Windsor Hills, Heritage Hills, Windsor Park, Pecan Springs – Springdale, St. Johns, Copperfield

Known for: convenience to Central Austin and University of Texas, older residential areas with large yards

Northeast Austin has many long-time residents. The Pecan Springs – Springdale hood especially remains relatively quiet and removed from the hustle of the rest of the city. Windsor Park sits across Interstate 35 from the University of Texas, providing relatively quick access to the campus as well as downtown. St. Johns neighborhood, on the north end of the region, offers easy ingress to both highway 290 and 35. Many young families choose to live in this region because of the sense of community.

West Austin

Barton Creek, Steiner Ranch, West Lake Hills, Northwest Hills, Cat Mountain, Lost Creek, Rollingwood, Rob Roy, Senna Hills, Jester Estates, Comanche Trail, River Place, Hudson Bend, Lakeway, Austin Lake Estates, Lake Pointe

Known for: very expensive (homes can go for as much as $10 million); Robert Rodriguez’s residence is out this way

If you like wide streets, lots of huge, old trees, and luxurious homes, West Austin is the place to be. Of course, you’ll need some serious dollars to purchase a house there, as many are priced above the $1 million mark.

Lakeway, River Place, and Hudson Bend surround Lake Travis. Many of the homes in these neighborhoods provide direct access to the lake. Private marinas can be found in Hudson Bend, where mobile homes and million-dollar waterfront properties coexist. Tarrytown and Highland Park, located just west of MoPac, are coveted for their green spaces, like the Mayfield Park and Nature Preserve, and outdoor hiking and biking trails.

Central Austin

Downtown, Hyde Park, Hancock, UT, Old Enfield, Windsor Road, Bryker Woods, Rosedale, Triangle State, Old West Austin

Known for: one of the most popular areas, “close to everything” and near many of Austin’s attractions

Central Austin is comprised of a diverse selection of neighborhoods. For high-rise apartment living as well as close proximity to the music scene — think Antone’s, where Stevie Ray Vaughan once performed — consider living in Downtown.

Central Austin birthed the popular organic grocery store chain, Whole Foods. The original store, located on the 900 block of North Lamar Boulevard, closed years ago. The company built a new, ginormous store that encompasses an entire city block at the intersections of West 6th Street and North Lamar Boulevard. The grocery store complex has an entire parking garage just for customers. (Everything really is bigger in Texas!) Traffic can get gnarly around this intersection, so it’s best avoided unless you’re on your way to pick up some organic vegetables and locally sourced meats.

Cute, cozy houses surrounded by lots of vegetation and trees on winding, hilly streets make up the neighborhoods near the University of Texas. Small two-bedroom bungalows line the streets of Hancock, while old Victorian mansions fill Hyde Park.

Hancock, located just west of I-35 and south of 51st Street, is slightly more affordable than other neighborhoods in the region. From there, it’s easy to hop on 51st Street and cross the interstate to the newer shopping development at the old airport site.

South Austin

Zilker Park, South Congress, Travis Heights, West Congress, Shady Hollow, Barton Hills, Bouldin Creek, Dawson, Galindo, South Lamar, South Manchaca, Cherry Creek, Garrison Park, Sweetbriar, Westgate

Known for: proximity to Barton Springs, trendy South Congress shops and nightlife, and St. Edwards University

Slightly larger, sprawling houses occupy much of South Austin, many of them remodeled to add space with landscaping comprised of a wonderful mix of ligustrum, oak and holly trees. Long time, iconic restaurants Polvos, where the food is always good and the atmosphere even better, both call South Austin home.

So does the largest urban bat colony in North America, which lives under the Congress Avenue Bridge. Watching the bats emerge from their sleep is a daily event.

South Austin comprises a mix of residents: artists, small business owners, singles, and families. No matter where you are in life, you’ll fit in here.

East Austin

East Cesar Chavez, Rosewood, Mueller, Martin Luther King, Holly, Govalle, Johnston Terrace, Chestnut, Upper Boggy Creek

Known for: lots of history. For awhile, the East Side was Austin’s best-kept secret, but since the early 2000s, gentrification has taken hold.

Older bungalow-type houses, some of them very small, give Austin’s East Side a historic feel. The east side used to be a good place to find a bargain but, with the development of new homes and shopping on the old airport site, since 2018 they are much more scarce. According to Doyle, there are still some homes that might sell for around $250,000 as of November 2019 if they haven’t been renovated, but the norm is much closer to $350,000.

Robert Rodriguez, the director of Desperado, Spy Kids, and Grindhouse, owns and operates a film studio out at the old airport site on Old Manor Road, east of I35.

And, if food trucks and street food make you salivate, you’ll find an inordinate number of them lining the streets of the East Side.

Southeast Austin

Pleasant Valley, Montopolis, Mckinney, Parker Lane, Riverside, Franklin Park

Known for: McKinney State Park and Austin Bergstrom Airport, apartment complexes and bungalows

There aren’t many restaurants or local business in Southeast Austin, but both the Mckinney and Franklin Park neighborhoods border McKinney State Park, which is filled with biking, hiking, and nature trails. Montopolis shares airspace with all the planes coming and going at the airport.

Condos and apartments are prevalent in Pleasant Valley, an area near the Colorado Metro Park and numerous golf courses.

Southwest Austin

Circle C Ranch, West Oak Hill, Belterra, Highpointe

Known for: old neighborhoods and new planned developments, good schools

Schools near Circle C Ranch, southwest of downtown and to the west near Steiner Ranch, rank high on Great Schools.org. East of downtown, LASA high school, a magnet school geared towards the liberal arts and sciences, received a 2019 College Success Award. If you like the idea of living in a planned development, Southwest Austin offers many choices.

The Burbs

Round Rock, Georgetown, San Marcos

According to both Doyle and Patterson, the surrounding suburbs such as Round Rock, Georgetown, and San Marcos, trend more affordable than anything available in Austin proper.

Buying in a tough market: Tips for buyers

Austin’s buyer’s market can be a tough one. “We have five to six thousand people moving here a month,” said Doyle. That’s well over a hundred a day. If you’ve found the perfect house to buy in Austin, you can bet there are a fairly large number of people considering that house as well.

During the early 2000s, multiple offers on homes were fairly commonplace. Doyle says that since then, Austin has a much more balanced market. This is good as no one wants a housing bubble.

Depending on location and school districts, he added, “there are some neighborhoods more desirable [and competitive] than others.” Doyle pointed out that, in the current market, some real estate agents will price a home at below market value to encourage multiple bids. An experienced real estate agent in the area will be able to spot these homes right away.

According to Forbes, one of the factors driving the homebuying market in the city is the number of transplants moving to Austin from areas with higher real estate prices, like San Francisco and New York City. To them, homes in Austin are a much better value per square foot.

Whether you’re coming to Austin from somewhere else or have lived in the city your whole life, with some knowledge and insight, and a great real estate agent, you can beat out the competition and find your ideal new home.

So just how much money do you need to buy a house in Austin?

According to the Austin Board of Realtors, almost 31,000 homes sold in Austin during 2018 and the median home price increased 3.6% from 2017 to right around $310,400. An article in the Austin American Statesman Newspaper, calls affordability one of Central Texas’s most challenging issues.

Depending on the lender, buyers put down between 3% and 20% of the purchase price. The national average in 2019 was 6%, and statistics in Austin reflect that. So, for a $300,000 house, you’d need between $9,000 and $60,000. On top of that, you also need funds for closing costs: insurance, a title search, real estate taxes, loan origination fees. In Texas, commissions for both the seller and buyer’s agents come out of the seller’s fees.

Deciding how much money to put down depends on things like the market itself, how good your credit is (for less money down you need better credit), and what your savings look like. The City of Austin operates a Down Payment Assistance program for buyers who haven’t owned a home in the past three years, have been divorced, and are purchasing a single family home or condo.

Something to remember about “hot” real estate markets is that the more money you’re able to put down, the more attractive your offer is. The reason for this has to do with how much of the sales price you’re financing. The more you have to finance, the riskier your offer is. Even with mortgage pre-approval, there’s always a risk that a mortgage loan could be denied once all the money and numbers are in place. Seller’s agents know this. This is one excellent reason to find an experienced and savvy Austin real estate agent to work with and help you navigate the competitive landscape of buying a house in Austin.

It’s the taxman

Residents of Texas already know the state has no income tax and no property tax on vehicles. However, real estate property taxes are among the highest in the country. And Travis County, which includes Austin, ranks near the top in the state.

According to Wallet Hub, a respected personal finance site, Texans pay a 1.83% property tax rate. Compare this to Hawaii, one of the lowest, at 0.27%.

Don’t let this deter you from buying a house in Austin, though. If you purchase a single-family home that you live in (you don’t rent it out), you can claim the homestead exemption, which offers a 20% decrease in taxes — even more if you are over the age of 65. Speaking of, if you are of retirement age, Texas provides the added bonus of no taxes on retirement income.

When to buy a house in Austin

According to our data, the best month to sell a house in Austin is November and the worst is January. Doyle said inventory increases in the spring and through the summer.

“A buyer might find a better deal during the slower time,” he said, “but, for the most part, our market’s pretty strong.”

Part of the reason for this is that Austin doesn’t have a cold, snowy winter. The city sees a few chilly days and at least one ice storm per season, but temperatures predominantly remain mild throughout the year.

Find a top buyer’s agent in Austin

With over 9,000 licensed real estate agents, you should have no trouble finding an agent in Austin that you click with. The right agent could save you up to 54.9% more than other agents. All that extra cash adds up to a nice covered back deck renovation or just a whole lot of chips, salsa, and fish tacos at Polvo’s!

Header Image Source: (Avi Werde/ Unsplash)