Real estate growth trending westward

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New home starts increasing for Lake Travis, Dripping Springs

For the first time in history, in 2013 the Austin metro area experienced more construction starts on homes than San Antonio. A lot of that growth is being directed at the north and west parts of the Austin area, said Madison Inselmann, regional director of Metrostudy Austin, a company that tracks housing market information.

The Lake Travis area—stretching from River Place and Westlake west to Spicewood—has prepared for major growth the past two years, according to statistics provided by Metrostudy Austin. Total housing starts—the number of privately owned new houses on which construction has begun—in the first quarter of 2013 increased by 47.9 percent compared with the first quarter of 2012. The numbers increased an additional 4.8 percent year-over-year for the first quarter of 2014, resulting in 1,123 new housing starts.

“Not everyone who moves [to the Austin area]is going to buy a home, but the numbers say there is still a demand for [new home builds],” Inselmann said.

Reasons for growth

Laura Mitchell, president of the Lake Travis Chamber of Commerce, credits the recent growth in the region west of Austin to Lake Travis ISD’s reputation as a top-performing district.

“With one of the top school districts in the state, the influx of young families to the area has been abundant,” she said. “It’s also the charm and beauty of the lake, hills and small community atmosphere.”

Mitchell said the majority of recent area development is in Bee Cave and west on Hwy. 71 through Spicewood.

The LTCC’s territory encompasses the area beginning just south of the Mansfield Dam, through Lakeway, Bee Cave and to the Pedernales River in Spicewood, she said.

“Low lake levels have not seemed to affect the growth rate of development,” Mitchell said. “While the lake is one of the primary reasons people are moving here, it is not the only reason.”

Bee Cave City Manager Frank Salvato agrees with Mitchell that LTISD’s accolades have been driving families to the area. However, he also cites retail and commercial development—including the Hill Country Galleria—as reasons for the area’s increasing popularity.

“I don’t see [the growth]slowing down in the next five years,” Salvato said. “I see it continuing at this rate. It’s not just Bee Cave; it’s the whole area—Lakeway, [west]Travis County.”

Lakeway City Manager Steve Jones said the city will probably see a decline in new housing permits as a result of residential areas being built out.

“However, I don’t see a slowdown in the area in general,” Jones said. “We’ve got a lot of homes in the $350,000 to $400,000 price range, which seems to be in high demand.”

Roughly 80 percent of the housing starts during the first quarter of 2014 for the Lakeway area are priced at $300,000 and above, according to Metrostudy. Nearly 15 percent are above $500,000.

Not just houses

“The Austin market, apartment-wise, is at a tipping point,” Inselmann said. “As apartments typically do, they are under-built and then catch up.”

Inselmann said the Austin metro area is expected to complete 12,132 new apartment units in the next year, 10 percent of which will be in the Lake Travis area.

“Couple that with maybe 10,000 new home builds in the metro, and you have 22,000 new housing units, which does take us a step forward but doesn’t catch us up [to the demand],” he said.

Resales falling off

Inselmann said the number of homes being resold in the Lake Travis area has started to taper off in recent months, but not because there are not enough houses listed.

“There are a few reasons for the drop-off,” he said. “Are the listings we have the listings we want, compared to what these out-of-town buyers want?”

Pricing is another reason for the drop-off, Inselmann said. For an average of $10,000 more, a buyer can get a new home in the Lake Travis area rather than buying an existing home, he said.

“The new developments in that area are quite special,” he said. “They appropriately take advantage of the scenery around them.”

Growing outward

About 60 percent of the new home construction in the Austin metro area takes place at least 15 miles away from downtown, Inselmann said.

“We aren’t really building in [north]Lake Travis,” he said. “We aren’t really building east of Austin or up by Lago Vista. When you take those away we are really doing 65 percent of our growth between I-35 and [US] 183 and out west along Hwy. 71 and [in]Dripping Springs. Dripping Springs will be one of those [places]that [will be]growing.”

The number of home starts within Dripping Springs ISD has also increased in recent years. Home starts increased more than 22 percent from 2012 to 2013 and more than 35 percent from 2013 to 2014, according to Metrostudy.

“Almost 90 percent of the growth in Dripping Springs has been on the eastern border,” Inselmann said. “You could almost confuse it with West Austin. You could make a pretty good comparison of Dripping Springs to Lakeway about 15 years ago.”

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