The current home builders’ mindset is that if they build them, buyers will come. Building spec homes (based on speculation) can look like playing the lottery. Developers, along with builders, are rolling the dice that the demand will be there at today’s level of need (or greater) when the homes are complete.
While demand shapes Austin’s homebuilding trends, the existing inventory of developable land also influences what gets built. With land becoming increasingly scarce, maximizing housing density is a top priority. It’s the reason why condo regimes are common and why new homes are getting smaller. In the Austin metro area, we are at such a deficit in the lower price points, that without new inventory (supply) being introduced into the market, we would be looking at multiple offers at every turn. The demand is always there. Here are some insights into Austin’s home-building trends and what to know when planning to build in the future.
Austin Home Building Package Pricing Trend: Keeps Costs Simple
I’ve been all over Central Texas recently and have seen some great options. The days of ‘picking your colors’ at certain price points for new home builds have gone away at least for now. The trend right now is package pricing.
The beauty of one price is that you don’t have to worry about overspending at the design center. Gone is the overindulging in a tile style that’s a level three, over the level two option included with the base price. Buyers can easily spend 20% more on a house after a visit to the design center. Builders are choosing the elevations, material, and color palettes right now, so you either like it or move on to a different choice. The builders who offer the option to pick finishes may offer flex cash to help pay for the upgrades. The deals will vary and are always subject to change without notice.
Beyond Square Footage: Read the Fine Print for Build Your Dream Home (or Remodel)
The devil lives in the details with whatever you are buying. I’ve had conversations in recent weeks with people thinking of building or doing a complete remodel. Whether you are considering a new home, a remodel, or happy to own a resale, there are data points to consider besides the size of the kitchen. Is the site in a flood zone? Is there a Home Owners Association? Is it in a Public Improvement District or a Municipal Utility District? Can you build a guest house? Make it a winery or build a tiny home community in the backyard? The restrictions may state that you can’t.
Just because something can be done on a property a quarter mile away, doesn’t mean you can do it to the property in question. For example, the deed restrictions (CCRs) might tell you that all fencing needs to be metal, the city restrictions may tell you the maximum fence height is six feet and the HOA might restrict the color to black. Don’t ever assume you can do something. It’s best to be clear on how you intend to live with the property and then make sure it is going to fit that expectation. There are always restrictions.
Planning ahead
It is hard to predict the future, so do your best with the data you have. Don’t assume what can be done. Find a source that can bring some clarification. For example, If I know going in a buyer intends to put a playscape in a backyard, a call to the HOA to find out the rules around having one might save some frustration in the future. For example, the HOA may allow them, but may only allow green slides.
Another buyer may want to purchase a Texas Hill Country cabin with a plan to make it a wellness center offering goat yoga. The deed restrictions may limit the property for residential use and may limit the property to house one goat.
Deed restriction example for animals
Sometimes things change
Notice of Information to Buyer and Seller is a form used in real estate that is essentially a disclosure notice that sometimes things change. Whether you are buying a new home or a resale, flood maps get redrawn, assigned schools may change due to population growth and extra-territorial jurisdictions can get annexed giving city services, along with city restrictions. In Austin, zoning is changing to allow more density on single-family lots. Not all changes ever happen, they can’t always be planned for, but it is always buyer beware. No home is perfect, even when you build one.
With new home construction’s ever-evolving landscape, staying informed is key. By understanding the current trends in homebuilding, zoning changes, and the housing market in general, you can make informed decisions on whether a new home build now or in the future is right for you.