The Fixer-Upper Effect

First-time Austin homebuyers are willing to pay big for these special features

Farmhouse features are still a hot commodity.

Zillow already has a good handle on what helps homes sell faster, but now the real estate website has dug even deeper. In a report from its subsidiary RealEstate.com, Zillow discovered that homebuyers — especially first-time homebuyers looking at entry-level properties — are willing to pay a premium for houses that tout popular farmhouse or Craftsman-inspired features.

What are those, exactly? Farmhouse sinks, wainscoting, coffered ceilings, claw-foot tubs, barn doors, and exposed brick and beams, to name a few.

RealEstate.com analyzed listing descriptions from millions of entry-level homes (defined as those priced within the bottom third of the market) and found that listings that included these hot-button words sold for up to 29 percent above expected values. Put the term "Craftsman" in the listing, and the starter homes sold for a 34 percent premium.

Energy efficient features in entry-level homes are also attractive to buyers, with homes mentioning "solar panels" bringing in as much as 40 percent more than expected and tankless water heaters fetching 24 percent more.

Zillow posits that with millennials playing an increasingly larger role in the housing market — they make up 42 percent of all homebuyers today and 71 percent of first-time buyers — their preferences are having an increasingly notable impact.

In top-tier homes, for example, the payoff on these features just isn't as large. Barn doors bring in just 6 percent more, while exposed brick is only worth 5 percent more. And those popular solar panels? Sellers can only count on a 13 percent increase with higher-end homes.

One of the only features that is extra appealing to both price brackets is that perennial Texas favorite: the outdoor kitchen. It's been known to rake in a 23 percent premium for starter homes and 28 percent more for top-tier listings.

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Homebuyers can afford to be picky as Austin housing inventory rises

Photo by Avinash Kumar on Unsplash

Housing economist Clare Losey said the most significant factor affecting home sales in Austin is high mortgage rates.

The latest real estate report from Unlock MLS and the Austin Board of Realtors (ABoR) has revealed housing inventory is still on a steady rise in the Austin-Round Rock-San Marcos MSA, creating more choices for potential homebuyers as they navigate a high interest rate market.

Residential home sales dipped by a mere 1.5 percent year-over-year from October 2023, amounting to 2,248 closed sales in the Austin-Round Rock-San Marcos MSA. Median prices have also dropped to $430,000, or 3.2 percent less than this time last year. More than 3,300 new home listings were added on the market — a 7.4 percent increase from 2023 — bringing the total number of active home listings to 11,599.

According to Unlock MLS and ABoR housing economist Clare Losey, Ph.D., October's mortgage rates stood at 6.4 percent and are showing no signs of a significant drop in the near future. Even heading into 2025, Losey says potential homebuyers who are biding their time in the hopes of seeing rates plummet "may be in for a long wait."

"In the meantime, sellers must recognize that bringing buyers to the table requires a more aggressive pricing approach," Losey said. "Even in a more balanced market, buyers with limited purchasing power are struggling to meet current price expectations."

As for the overall health of the Central Texas housing market, 2024 Unlock MLS and ABoR president Kent Redding labeled recent news reports that called Austin "ground zero" for a downturn as an "extreme over-exaggeration."

"Austin led the state and nation in record-breaking home price growth and sales activity during the pandemic," Redding said. "For three years, near-zero housing inventory, numerous offers above list price and a rapid-paced market raised home prices and left little negotiating power for buyers. During this record-setting growth, ABoR and Unlock MLS consistently emphasized the unsustainability of the rapid growth, and now, our market is working to balance those extremes."

Central Texas housing trends in October 2024

In Travis County, 979 homes were sold last month — a slight 2.5 percent increase from last year. Median prices remained flat year-over-year at $510,000. Active home listings continued growing to 5,702 homes, which is 9.4 percent more year-over-year.

In Williamson County, 807 homes were sold in October, with median prices steadily dropping to $420,000. There were 1,028 new home listings on the market, showing a 4.5 percent increase from October 2023, bringing the total number of active home listings to 3,369.

Residential home sales dropped by nearly eight percent in Hays County in October, totaling 315 sales. Median prices also fell 5.5 percent year-over-year to $359,000. Active listings rose 6.6 percent year-over-year to 1,740 homes with the addition of 534 new listings on the market.

Meanwhile, 114 homes were sold in Bastrop County last month, which is 4.4 percent more than this time last year. Median prices dropped by a single percentage point year-over-year to $355,000. There were 654 active listings on the market in October, and 152 new home listings, representing a 1.3 percent slip in new inventory when compared to last year.

Only 33 homes were sold in Caldwell County in October to reflect a near 14 percent decline year-over-year from October 2023. Median prices fell to $262,990, which was a 13.5 percent decrease from last year. There were 136 active homes on the market last month, and 40 new homes added on the market.

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