By Riki Markowitz
Austin has been on a multi-year real estate streak, which should only be a surprise if your address is “Under this Rock.” Since 2010, for single-family homes, the number of units sold has increased more than 55 percent, or 10 percent year-over-year; median price increased 25 percent; and the average number of days on the market decreased from 77 days in 2010 to 47 days in 2014.
These numbers include all zip codes in Travis County and some in surrounding areas. When you take a microscope to specific pockets of the city, however, an interesting story develops – one in which a property that hits the market on Saturday already has multiple bids by Sunday. Not only are buyers laying cash on the table, but also, it’s not uncommon for determined shoppers to get into bidding wars and make offers that are thousands of dollars above list price.
Tracking Austin’s Hottest Hoods
Experts agree that when it comes to residential home sales, the market will continue making gravity-defying strides. Forbes ranked Austin-Round Rock-San Marcos the number-one over-valued housing market in the U.S., at 19 percent. In April, ABoR president, Barb Cooper, agreed, saying that cost of housing in the Austin area is more bloated than ever. Interestingly, skyrocketing prices do not seem to be dissuading qualified buyers, which, predictably, is dominated by newly independent and financially stable millennials and those who have moved to central Texas from out of state to capitalize on the city’s low unemployment rate.
What makes a neighborhood “hot”?
There are a few ways to quantify how a zip code achieves “hot-ness.” Each month ABoR and Texas A&M’s Real Estate Center collects data on a property from the time it’s listed in the MLS to closing. When you crunch these numbers and compare to data from past years, a pattern will emerge. In Austin, however, things are no so clear-cut.
“I don’t think there is a bell curve with popular vs. unpopular neighborhoods right now,” says Shawn Rooker from Realty Austin. “At this point there is a shortage of inventory, so popularity doesn’t compute.” Some neighborhoods may have better amenities than others, some have more shopping, better restaurants, or they’re closer to downtown, near major roads and public transportation. Cooper says that in her experience, every buyer has a list of conditions for what makes a particular neighborhood appealing. Buyers who have children look for good schools; young buyers want to be near downtown; many empty nesters are looking for low-maintenance housing, which also makes downtown an ever-more appealing option for anyone north of age of 40. But in Austin, there seems to be a neighborhood for everyone’s tastes, from Westlake for the highly ranked schools to out-of-the-way Montopolis, which has been gaining traction as a community for investors and house flippers.
Asking the experts
Another way to determine a neighborhood’s ‘hotness’ factor is by asking agents and brokers. What most folks look for when shopping for a home are individual conveniences and personal preferences. “In my experience, the sweet spot tends to be neighborhoods that have certain amenities and also hover around the median price range,” says Cooper.
The median household income in Austin is around $55k, which is an amount that can easily qualify for a $200,000 home. “But when I tell clients how far $200k will get them, they’re absolutely stunned,” says Tim Landy, a REALTOR with Twelve Rivers Realty. “For these buyers, Pflugerville, Kyle, and Buda are becoming desirable destinations.” What were once outlying areas, Williamson and Hays Counties are now regularly appearing on lists ranking the most popular communities to live in and around Austin – the same lists with year-over-year mainstays like South Lamar, with its “Keep Austin Weird” vibe and conservative Hyde Park.
Crunching the data
To determine Austin’s hottest neighborhoods, Realty Line looked at hard data and also asked agents who are experienced working directly with buyers.
Hottest Austin Neighborhoods
Median price: $220,000 +21% from 2014
Days on market (DOM) 12 +50% from 2014
“Central Austin is really developing nicely,” says Landy. “Especially around The Domain. New businesses are moving to that area and the tech corridor is close by. A lot of people want to live north to be closer to work.”
Central East Austin, 78702
Median price: $377,000 +8% from 2014
DOM: 33 +50 from 2014
“You’re seeing a lot of new construction selling at a premium price. I have a client that moved away seven years ago. They recently came back to buy a house for their daughter. I suggested East Austin but they didn’t want to go down there because their recollection was that it was unsafe. They were blown away to see the new construction.
Median price: $443,800 +14.6% from 2014
“Once buyers realized how affordable living here is, especially compared to adjacent neighborhoods, demand increased.” says Rooker. “Also, as the entertainment districts grew and traffic worsened, people began appreciating the walkability of downtown,” says Chloe Chiang, a REALTOR with Twelve Rivers Realty.[/heightlights_round]
Median price: $935,000 +6% from 2014
DOM: 85 +113% from 2014
Tarrytown has always been one of the most popular historic neighborhoods in Austin. It’s centrally located, near major roads and close to the lake, downtown, good restaurants and lots of shopping. Very few people in Austin will ever earn enough to live in this zip code, which only seems to up its popularity.
[heightlights_round]Central Austin, 78705
Median price: $1,050,000 +62% from 2014
DOM: 33 -79% from 2014
Like “downtown proper,” central Austin has the walkability, the shopping, eateries, and entertainment. The skyrocketing cost of housing shows how in demand this area has become in the past year.[/heightlights_round]
South Lamar, 78704
Median price: $540,000 +12% from 2014
DOM: 56 +107% from 2014
This zip code has always been one of the most recognizable in the city. This was one of the strips locals showed tourists to flaunt the city’s “Keep Austin Weird” vibe. Today it’s a crowded, mixed-use corridor with new condos and street level retail stretching from Barton Springs almost nearly to Ben White.
[heightlights_round]Avery Ranch, 78717
Median price: $334,400 +11% from 2014
DOM: 51 +82% from 2014
For a good deal, agents and brokers are taking buyers further and further from central Austin. This master-planned community in Cedar Park is more accommodating for families and close to Austin”s high-tech employers.[/heightlights_round]
Windsor Park/University Hills, 78723
Median price: $284,150 +4% from 2014
DOM: 31 +37 from 2014
These neighborhoods, with their mid-century single-family ranch houses, are taking a back seat to the vibrant, mixed-use, planned Mueller community just a few miles south.
[heightlights_round] Pleasant Valley, 78741
Median price: $225,000 +7% from 2014
DOM: 21 -32% from 2014
Young families and millenials are drawn to neighborhoods close to high-tech employers or districts with lots of bars and restaurants. Pleasant Valley may be popular with buyers looking for a fix-me-up project, but it has not yet reached the desirability of East Central Austin.[/heightlights_round]