Westlake real estate market hits the $1M mark

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Westlake has become the only $1 million real estate market in the Austin area, according to median home sale prices in the first quarter of 2017.

According to the Austin Board of Realtors, median home sales reached $1.03 million from January through March in the 78746 ZIP code, which encompasses the cities of Rollingwood and West Lake Hills, as well as Travis County and Austin neighborhoods Davenport Ranch, Lost Creek, Rob Roy and Westwood.

“It’s kind of hard to believe that home prices have escalated the way they have,” West Lake Hills Mayor Linda Anthony said. “It’s not just in West Lake Hills—it’s across the whole area.”

A metrowide trend

Although home prices in Westlake have been going up for quite some time, Brian Talley, owner of Regent Property Group in Westlake, said the recent peak is more a reflection of growth for the entire Austin metropolitan area rather than something unique to the ZIP code.

“The areas that are considered expensive today, like Westlake and Tarrytown, are the same ones that were considered expensive five and 10 years ago,” he said. “Houses in Westlake were more affordable five years ago, but they were still expensive for Austin.”

Although the listed median home sale price in Westlake exceeds $1 million, Talley said is it possible to find homes for less.

“There are still properties under $1 million, but they are usually a bit smaller and need to be updated,” he said. “Occasionally you can find something for $800,000-$900,000 in Davenport Ranch or west of Loop 360 that’s been updated and nicely cared for that’ll sell really quick. Those aren’t huge homes, have small yards and are really expensive for what you’re getting, but you can get into the area that way.”

But most first-time homebuyers looking to relocate to the Austin area simply cannot afford to live in Westlake and are moving farther south where more affordable homes are located, said Donna Harris, an Austin-based Realtor with 17 years of experience.

“Austin is growing, and Kyle and Buda have been considered part of [the metropolitan area]for about five years,” she said. “Now people are looking just north of San Marcos because that’s where their price point is. Pretty soon, San Marcos is going to be considered Austin, too. Distance-wise, San Marcos is pretty close, but if you have to commute it’s totally different.”

LTW-2017-05-58-1Why do people move to Westlake?

“Westlake is one of the most beautiful parts of town,” Talley said. “It’s right by the Hill Country, Lake Austin and Austin Country Club. It’s close to downtown and in a great school district. That’s why Westlake is so popular.”

He said in local real estate, Westlake is typically synonymous with Eanes ISD, and area schools are the driving reason families look to relocate to the area.

“The main attraction seems to be the schools,” Talley said. “Eanes ISD is a nationally ranked school district, and if someone with kids can afford to live out here, that’s the real key. Not everyone sends their kids to public schools, but you still have good private schools [in the area]like St. Stephen’s [Episcopal School], St. Michael’s [Catholic Academy], Trinity [Episcopal School] and Regents [School of Austin].”

Across the metro, he said only Tarrytown comes close to competing with Westlake-level home pricing, with median home sales in the first quarter of 2017 listed at $916,000. When buyers evaluate the two areas and look at EISD against Austin ISD, EISD typically wins out, Talley said.

“People have choices [in Westlake], and if they’re looking at schools and want to be in Eanes, there are a number of communities they can choose to live in,” Anthony said. “I hope what draws people to West Lake Hills is all of the efforts we have made to preserve what is really a unique gem of a community.”

The West Lake Hills mayor said the city’s large lots and setbacks allow more privacy than one would find in more manicured developments, such as Lost Creek and Davenport Ranch. The city’s efforts to preserve natural vegetation and topography with views make West Lake Hills feel more like a nature preserve than a development, she said.

“I think people may come here initially for the schools, but then they see the valley, the wild basins and the trees,” said Peggy Presley, who moved to the Westlake area in 1982 after growing up across the Colorado River in Tarrytown. “They enjoy the aesthetic and the beauty out here. Where else in Austin can you get that?”

In Rollingwood, residents enjoy a small-town atmosphere but can participate in big-city events, Mayor Roxanne McKee said. 

“[Rollingwood] is just a few miles from downtown Austin, Zilker Park and Lady Bird Lake, the crown jewels of Central Texas,” she said. “Residents also typically enjoy shorter commute times to work than most because of the city’s central location.”

A change in culture

Because of the increased popularity of the area, McKee said Rollingwood has recently experienced a residential “building boom” with more than 70 active building permits so far this year as of April 30.

“A number of single-story ranch homes built decades ago are being demolished, and new, multistory homes with larger footprints are taking their place,” she said. “With the construction of larger homes comes an increase in the valuations of those homes.”

Anthony said the character of the neighborhood is changing in part because of a desire new residents have to own larger homes.

“People who moved here 40 years ago didn’t necessarily want the larger homes; they wanted a safe place their kids could grow up,” she said. “The people moving in now may not have the same level of interest in the aesthetic those who founded the area worked to protect. Back in the day, a 2,500 square-foot home was thought of as large, and now a 4,500 square-foot home is considered not big enough.”

Presley said some of the things that initially drew her to Westlake—the trees, wildlife, safe roads and getting to know her neighbors—are not as important to some new residents.

“People now move here for the privacy,” she said. “There are some people who are scared of the coyotes, but a reason people were attracted to Westlake was the wildlife. You used to be able to walk along the street and not worry, and now people use the roads to pass through and want to raise the speed limit and expand the roads.”    

However, Presley said she still feels a sense of community.

“Westlake is still very safe,” she said. “West Lake Hills has its own police department and its own city council. I know my mailman. I know the person who works at the gas station and fills my gas. I love that.”

Will prices continue to rise?

As long as Austin continues to attract new residents, the housing market in Westlake will continue to be strong, said Steve Turnquist, a broker for Engel & Volkers in Rollingwood.

Talley said he has seen some softening on the higher end of the market over the past two years but does not expect the area trend to reverse any time soon.

“Westlake isn’t getting any further from [Austin], the schools aren’t getting any worse and the supply is limited,” he said.  “If Austin continues to grow, prices will continue to grow with it.”

If the national housing market and economy were to take a turn and get worse, prices in Westlake would be impacted, Talley said.

“After the recession there was a 5 percent drop in home prices in Westlake and a 25 percent drop in the Lake Travis area,” he said. “Prices in Westlake tend to be a little more stable because it’s close to being built out. Lake Travis got hit harder because they are further from Austin, there is more inventory and more construction [of new homes].”

Harris said she does not predict any more years of 10-14 percent growth in home sale prices as was the case across the metro for several years, but she still thinks 7-8 percent growth in home sale prices is a possibility.

“We’re still seeing appreciation, but not as much,” she said. “Even your most popular areas aren’t going to be able to sustain double-digit growth forever.”

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