The Austin and Georgetown Market: What Buyers Should Actually Do Right Now

Every conversation about the Central Texas housing market seems to start with someone quoting a statistic and ending with a prediction. I want to do something more useful here: describe what conditions look like on the ground, and then tell you what to actually do about it depending on your situation.

I have been originating loans through the 2008 correction, the 2021 frenzy, and everything since. What follows is what I am seeing in files right now, not what a headline says.

Where the market stands

The Austin metro spent 2021 and early 2022 in a state that had no relationship to normal. Homes were selling in days, appraisal waivers were routine, and buyers were writing offers on properties they had toured for eleven minutes. That is over, and it has been over for a while.

What replaced it is something closer to a functional market. Inventory in Williamson County — Georgetown, Round Rock, Leander, Liberty Hill, Hutto — is meaningfully better than it was three years ago. Days on market have stretched. Price reductions are common enough that they are no longer news. Sellers negotiate again.

Rates are the counterweight. Higher financing costs pulled a large group of would-be buyers out of the market, which is precisely why inventory recovered and why negotiating leverage shifted. You cannot have it both ways: the low-rate market came with brutal competition, and this market trades that competition for a higher cost of money.

The practical implication most people miss is that a buyer today has options a 2021 buyer never had. Inspections with actual repair negotiations. Contingencies that sellers accept. Closing cost concessions. Time to think.

Builder incentives are the story nobody is telling loudly enough

Here is where I see the largest gap between what is available and what buyers know about.

New construction inventory across Georgetown, Leander, and Liberty Hill has been significant, and builders have standing inventory they need to move before the end of a fiscal period. Builders do not like cutting list prices, because that resets comparable values across the entire community and upsets everyone who bought last quarter. What they will do instead is buy down your interest rate.

A permanent rate buydown funded by a builder can be worth far more than an equivalent price reduction. A $20,000 price cut on a $450,000 home saves you roughly $115 a month. That same $20,000 spent buying down your rate can save considerably more, every month, for as long as you keep the loan.

The catch is that builders usually attach these incentives to their affiliated lender. Sometimes that lender is genuinely competitive and the incentive is worth taking. Sometimes the incentive is offset by a higher base rate or padded fees, and it is not. I review builder lender estimates for clients regularly and tell them honestly which way it falls. Occasionally I tell someone to use the builder’s lender. That is a perfectly good outcome — you got the right answer.

Property taxes deserve more of your attention than the purchase price

If you are relocating to Texas from California, Washington, or the Northeast, this is the line item that will surprise you.

Texas has no state income tax, and property taxes carry a proportionally larger share of the load. Rates across the Austin metro commonly run between 1.8% and 2.5% of assessed value depending on your city, school district, and whether the property sits inside a MUD or PID.

On a $450,000 home at 2.2%, that is $9,900 a year — $825 a month before you have paid a dollar of principal, interest, or insurance. Buyers who budget using a national mortgage calculator that assumes a 1.1% tax rate are off by roughly $500 a month, and they find out during underwriting rather than during planning.

Two things to know. First, the homestead exemption meaningfully reduces your taxable value on a primary residence, and Texas caps annual assessment increases on homesteaded property. File for it. Second, the tax figure quoted on a listing may reflect the previous owner’s exemptions, not what you will pay. I calculate your actual escrow using the current rate and your expected exemption status, which is a small thing that prevents a large surprise.

What to do, depending on who you are

If you are a first-time buyer: Get preapproved before you tour anything. Not prequalified — preapproved, with documents reviewed. In this market you have time to think, but the good listings still move, and the buyer who can write same-day wins the reasonable ones. Also check whether you qualify for Texas down payment assistance. Income limits are higher than most people assume.

If you are moving up: Look hard at Buy Before You Sell. The reason it matters more now is that with longer days on market, a home sale contingency represents a longer and less certain wait from a seller’s perspective. Removing it restores your negotiating position without forcing you into a rental between homes.

If you are self-employed: The market being calmer works in your favor, because you have time to structure the file properly. Bank statement and P&L programs take a bit more preparation than a W-2 file, and a market where you are not competing against six cash offers is a market where that preparation pays off.

If you already own and are watching rates: Do not refinance on a rumor. Run the break-even: total closing costs divided by monthly savings. If that number is longer than you plan to stay, it is not worth it regardless of how good the rate sounds. I will run it for you without any expectation that you do the loan.

If you are waiting for rates to fall before buying: Understand what you are betting on. If rates drop meaningfully, the buyers who left the market come back, competition returns, and prices respond. You may win on the rate and lose on the price, plus you spent the intervening months paying someone else’s mortgage. The better question is whether today’s payment fits your budget today. If it does and the house is right, buy it — you can refinance a rate, but you cannot refinance a purchase price.

The honest summary

This is a market where a prepared buyer has real advantages for the first time in years. Inventory exists, sellers negotiate, builders are motivated, and you have time to make a considered decision rather than a panicked one.

The buyers who do well right now are the ones who did their financing homework first. If you want to know exactly where you stand — your real payment, your real cash to close, and what you actually qualify for — that conversation takes twenty minutes and costs nothing.