Austin is an excellent place to live, with a booming economy, strong job market, and plenty of recreational activities. It’s easy to understand why it’s considered one of the most sought-after locations in the US. Due to the city’s high demand, the housing market is competitive, making it essential to be fully prepared before beginning the home-buying process in the area. We’ve got tips for buying a home in Austin, Texas.
This guide provides all the necessary information to help you make an informed buying decision. It begins by examining the present state of the housing market in Austin and subsequently provides you with some pointers to assist you in locating the ideal property.
If you’re thinking about purchasing a home in the Austin housing market, whether you’re a seasoned homeowner or a first-time buyer, this guide has some valuable tips that can help you. So without further delay, let’s get into it!
Is The Timing Right To Buy A House In Austin?
If you are looking to buy a house in Austin, Texas, you may be wondering if you missed the best time to purchase. Whether you’re a first-time buyer or have bought homes before, it’s important to avoid overspending by getting a mortgage that exceeds the property’s value.
Currently, buying a home can be challenging as it may take multiple offers before finding success. And it’s important to know that home prices are not expected to decrease anytime soon. Currently, the housing market favors sellers since there are more buyers than available houses for sale. Therefore, prices in Austin are increasing, making it a more favorable market for sellers.
The market has been greatly affected by the significant growth of Austin’s population over the past ten years. As a result, the median price for residential properties has increased by 16% in the last year, which is an all-time high.
Which Factors Make Austin Ultra Competitive?
The housing market in Austin is strong and bustling with competition. Although there seems to be a slight decrease in recent activity, the residential real estate market in Austin is still very active, which has led to home prices going up significantly in the past year.
Although inflation is increasing nationwide and interest rates are rising, the real estate market in Austin still favors sellers due to the high number of people moving into the area and the rapidly improving local economy. Based on Census Bureau projections for 2021, Austin’s population is expected to grow by 146 people per day.
This rapid growth is putting a lot of pressure on infrastructure, especially housing. The latest stats reveal that the Austin housing market is still going strong and home prices are hitting new records throughout the Austin area.
As of December 2022, the typical value for homes in the Austin area that are priced in the intermediate range is $599K. In the past year, home values in this area have gone up by 32.4 percent and are expected to increase by 10.7 percent by May 2023.
Our List of Helpful Home-Buying Tips
- Set Some Parameters
Have you thought about the specific type of house you want? Would you prefer a single-family home on a spacious lot? Or is a suburban neighborhood with a cul-de-sac where your kids can play more appealing? Alternatively, perhaps you’d rather live in a downtown Austin high-rise condominium?
Keep in mind that Austin has many different neighborhoods and communities. To avoid feeling overwhelmed, it’s best to have a clear idea of what you’re looking for and focus on specific regions and property types.
Ensure You’re Working With a Local Agent
It’s recommended that buyers work with a licensed real estate agent who can provide valuable assistance during the home-buying process. Real estate agents can help with tasks such as securing pre-approval for financing, identifying any issues with potential homes, understanding necessary documentation, and finding a brokerage firm for closing. Agents are compensated through a commission paid by the seller for the home purchased.
It’s important to find a local real estate agent who is both experienced and enthusiastic about their work. They should listen to your needs and guide you accordingly. It’s also important that both the buyer’s and seller’s agents communicate openly and respectfully without ego, as this often leads to the best results.
Research All the Available Mortgage Options
If you don’t have enough money to buy outright, start looking into getting a mortgage as soon as you can. Compare rates from 3-5 different lenders to find the best option. Before talking to a lender, ask yourself these questions:
- How much of a down payment do you need?
- What type of loan best suits your circumstances and budget?
- Are there any restrictions or limits on the amount you can borrow?
- What fees will be associated with obtaining a mortgage?
- Are there any special programs available to assist with my home purchase?
- Can you utilize the Veterans Affairs mortgage benefits?
When you’re armed with the answers to these questions, you’ll have a better idea of which loan product is the best fit and how to go about getting it. Although getting a mortgage in Austin can be a competitive process, understanding your options will help make sure that you get the financing that’s right for you.
Getting Pre-Approved is Ideal
Getting pre-approved for a loan is one of the most important steps you can take before buying a home. Pre-approval helps determine what price range you should be looking in and makes sellers more likely to accept your offers. It also gives you an idea of how much money lenders are willing to lend you, which will provide peace of mind when shopping for a property.
It’s important to remember that being pre-approved doesn’t guarantee that a lender will give you the final loan approval but it does mean that lenders have already reviewed your credit report and financial information, giving them an idea of what type of mortgage they may offer.
In order to get pre-approved for a mortgage, you’ll need to provide your lender with financial information such as bank statements, pay stubs, tax returns, and other documents. Your credit score will also be taken into consideration during the pre-approval process. It’s best to have a credit score of at least 700 when applying for a loan in Austin.
By researching lenders, comparing rates, and getting pre-approved for a loan before you start looking for homes, you’ll be able to make more informed decisions when it comes time to purchase. Working with an experienced real estate agent can help ensure that the home-buying process runs smoothly and that all of your questions are answered along the way.
Check Your Credit and Improve it if Necessary
Your credit score plays an important factor in the home-buying process. A good credit score will make it easier to secure a loan with favorable terms and interest rates. If you’re planning on applying for a mortgage, it’s important to check your credit reports from all three major bureaus – Experian, TransUnion, and Equifax — at least six months before you plan to start looking for homes. This will give you time to correct any inaccuracies if necessary or take steps to improve your score.
The most effective way to repair any damage done to your credit is by paying off debts as soon as possible and maintaining steady payments on open accounts such as student loans, car payments, or high-interest credit cards. If possible, pay off any overdue accounts and work with creditors to get them removed from your report. Also, don’t open new lines of credit or close old ones as this can have an adverse effect on your score.
By keeping tabs on your credit score and addressing any issues early on, you’ll be able to move forward with the home-buying process with confidence.
Start Saving Money for a Down Payment
The amount of money needed for a down payment varies depending on the loan product you choose and your credit score. Generally, lenders require at least 20 percent of the purchase price as a down payment. In some cases, you may be able to get away with less. However, it’s best to prepare for the worst-case scenario and save up as much as possible beforehand.
In addition to paying off debt and maintaining good credit, there are other steps you can take to save money for a down payment. Try setting up an automatic transfer from your checking account into your savings every month or create a budget so that you know exactly where your money is going each month. You might also consider taking extra shifts at work or selling unwanted items to add more money to your savings.
Consider Surrounding Neighborhoods
Buying a home in the suburbs instead of the city can save you money when searching for a home in Austin.
Although cities offer easy access to various places and shorter commutes to work, purchasing a home in the suburbs of Austin has its own benefits. Living and housing expenses are lower, and there is better security and less traffic compared to the city. Additionally, suburbs provide easier access to attractions outside the city, like Lake Travis Park.
The areas surrounding Austin, including Cedar Park, Hutto, Georgetown, and Leander, were once considered suburbs but are now considered a part of Austin. These neighborhoods are beautiful and more affordable than living in the city itself. An experienced realtor can help you find an excellent Austin suburb that will be a great place to live for years to come.
Visit Neighborhoods Before Buying
To make an informed decision about buying a home in Austin, touring the neighborhoods and surrounding areas is essential. We realize this may not always be feasible, but by visiting beforehand, you can gauge the proximity and quality of restaurants, companies, supermarkets, and schools. Additionally, you can determine if the environment and lifestyle are a good fit for you.
If you can’t go to the location, it’s a good idea to talk to a local real estate agent and research online. But, if you don’t carefully evaluate the communities before buying a home, you may regret it. To assist you, check out our article about the top neighborhoods to live in Austin.
Your First Offer Should be Your Strongest
With the increasing number of businesses moving in, more people will need housing, making the city more enticing to out-of-state buyers. Due to the surge in corporate relocations, the demand for housing has risen dramatically while the supply has dwindled.
This means that making a strong initial offer is crucial in order to differentiate yourself from other buyers. Sellers frequently receive numerous offers, including some that exceed the initial asking price.
If you are truly interested in the house, ensure that your initial offer is your best, as it may be your only opportunity. You don’t want to regret not making a better offer after it has been sold to someone else.
Final Thoughts
Austin is a great place to live because of its vibrant music scene, diverse culture, excellent restaurants, and thriving job market fueled by the expansion of several large companies that have recently moved to the area.
But, It can be difficult to stay current on the ever-changing Austin housing market and its latest buying patterns. Working with an experienced and knowledgeable local realtor will help your home-buying process go much smoother.
Ready to start your journey of buying a home in Austin? Reach out to us and our team of experts will help guide you through the entire process.
