Some parts of Southwest Austin offer first-time homebuyers options, but overall experts say a lack of affordability makes it a challenge to find a so-called “starter home” in the area.

A typical starter home has an open floor plan with basic decor such as vinyl flooring, Formica countertops, and a small yard or patio space, said Lee Whitaker, vice president of operations for the Greater Austin Homebuilders Association.

“On the resale side you can [find a starter home in Southwest Austin]. There are still great pockets, great neighborhoods, that are affordable—and by affordable what I’m saying is that you can get a home in the $150,000-$180,000 range. On the new homes side, you are going to be very hard-pressed, or you can’t find it, in Southwest Austin. That market is tapped out and we’ve grown past that price point,” he said.  

Starter homes in Austin consist of fewer than 2,500 square feet and are usually priced at less than $275,000, according to Realty Austin agent Lori Goto.

Southwest Austin is attractive to buyers because it has several family-oriented neighborhoods as well as retiree communities and single-family homes for couples without children, she said. 

Late last year, Eldon Rude, a principal with 360º Real Estate Analytics LLC, said developers looking to build starter homes would be a trend to watch in the area. Eight months later, he said you can find a starter home in Southwest Austin—but it will not be new. [polldaddy poll=8992832]

“It’s likely going to be a previously owned home that is older and might need some work, and so that’s a tradeoff,” he said.

The first-time homebuyer has somewhat been squeezed out of the Southwest Austin market in terms of new single-family houses, Whitaker said. 

“The cost of land in Southwest Austin is more expensive than other parts of town,” he said, noting available land is scarce.

Builders must make homes attractive and add in amenities to enable higher home prices that justify the purchase of that land, said John Rosshirt, co-owner of Southwest Austin-based real estate firm Stanberry & Associates Inc., which has four offices in and around Austin.

“We have such pent-up demand,” Rosshirt said. “All those apartment buildings that are out there [have] people who would buy a house if a house was available. Renting is their second option, but if you want to live in the Southwest [part of Austin] and you want it to be affordable, you’re going to be likely renting something for a while.”

What is easier to find than a starter home is what Whitaker calls a “first-time move-up” home—a slightly larger house with upgrades such as tile floors, granite countertops and a bigger yard.

Colleen Nance, broker and owner of Nance Real Estate, said she has been selling homes south of Lady Bird Lake for about 20 years.

In the area Community Impact Newspaper defines as Southwest Austin—including ZIP codes 78735, 78736, 78739, 78745, 78747, 78748 and 78749—in general home prices range from slightly less than $200,000 to
$6 million, Nance said.

Where to look

Many homes located off Brodie Lane, such as those in the Maple Run neighborhood, offer prices of less than $300,000 and feed into strong schools, said Bryan and Rebecca Greenleaf, real estate agents with Realty Austin. The team often recommends neighborhoods such as Sendera and Westcreek to first-time homebuyers, they said.

Lots in the Grey Rock Ridge and Avaña neighborhoods start around $360,000, Rude said. He said those prices could attract young people who live downtown or further north and are looking to buy their first home.

MileStone Community Builders’ Searight Village offers homes starting in the $250,000s for 1,292 square feet. The company's 1601 Stassney development offers homes starting in the $290,000s, Rude said.

Options such as condominiums, townhomes and duplexes offer flexibility for people who might not be able to pay single-family pricing, experts said.

Efforts to bring in more local businesses and increase walkability in the Garrison Park, Westgate and South Manchaca neighborhoods could make those areas more attractive to recent college graduates looking for homes, Rosshirt said.

“The tastes of the younger generation are very different from the tastes of previous generations; they don’t necessarily want the suburban life,” he said. “They want to be in places where they can walk and do things.”

In Austin, the number of condo sales declined in the first half of 2015 compared with the same period during the prior year, according to a Texas Association of Realtors report. However, in Southwest Austin, Rosshirt said he has seen no signs of condo sales slowing.

“I think the demand for Southwest is still very strong,” Rosshirt said.

There are hundreds of listings of homes for sale in Southwest Austin, but an MLS, or multiple listings service, search for houses, condos, duplexes and townhomes limited to $200,000 or less brings up only a few results, Nance said.

For current homeowners, selling in Southwest Austin to first-time buyers can happen quickly, she said.

“The reasonably priced ones usually sell in four days or less,” she said.

Homebuyer perspective

The city of Austin offers programs that aim to help potential homebuyers find places to live, Nance said.

“You can get a pretty good deal in Southwest Austin, more so than in some other places,” she said.

That was the goal of Emily and Brandon Hartman, who have lived in Austin for a few years and started looking in February at homes in the Northwest Austin area. After putting offers on a few houses there and not succeeding, they expanded the search for their first home to include Southwest Austin and the Cherry Creek neighborhood.

“We didn’t want a new house; we wanted something funky and had that quirkiness of the ’70s,” Emily Hartman said, noting selling points included being close to food trucks, scenic areas to walk her dog, and districts such as South Lamar and South Congress.

Houses the couple looked at in North Austin were around 1,200 square feet with 3 bedrooms and had not been remodeled, but were still around $325,000. The house the couple recently closed on in Southwest Austin was $340,000, about 1,900 square feet, was remodeled and had granite countertops and a good neighborhood, she said.

“In Southwest Austin, you definitely get more for your money,” she said.  

This story was revised July 27 to include updated numbers from MileStone Community Builders.