Best Austin Neighborhoods

The 9 hottest neighborhoods to buy in Austin right now — real estate experts weigh in

Need help navigating Austin's red-hot real estate market? We’ve got the inside scoop from local real estate experts on where to buy in Austin right now. If you're in the market for a new home, here are nine neighborhoods that should be on your list.

Castlewood Forest: 78748
This South Austin ‘hood offers hip South Lamar charm for a fraction of the price. Homes sit on 0.3-acre lots, meaning ample yard space — and maybe even that pool you’ve been wanting. Nestled between I-35 and Mopac, Castlewood Forest boasts some serious convenience. The neighborhood’s proximity to "Way South Austin" staple Moontower Saloon and South Park Meadows sweetens the deal, according Adam Walker of Realty Austin.

Circle C Ranch: 78739, 78749
For the buyer looking to get away from the hustle and bustle of most Austin neighborhoods, Circle C Ranch is ideal. Nearby schools like Kiker Elementary, Gorzycki Middle School and Bowie High School ensure the kids will get a top-notch education. Realty Austin's Ashley Stucki says the uber-friendly, laid-back vibe of Circle C is a major perk. With downtown just a 15-minute drive away, Circle C proves you can have it all in suburbia.

South Lamar: 78704
Paul Huddleston of Realty Austin says South Lamar is the hottest ‘hood in Austin. And seeing as how buyers have Austin locales like Odd Duck, Alamo Drafthouse and the ZACH Theatre in their backyard, he has a point. Diversity in everything from restaurants to residents makes this ‘hood ideal for locals and Austin transplants alike.

Brentwood/Crestview: 78756, 78757
This hip 'hood recommended by GoodLife Realty is authentically Austin. With quirky shops and health-conscious eateries in walking distance of the charming homes, you get a true neighborhood experience. A wide selection of excellent schools, including McCallum High School, Paragon Prep Middle School and The Children’s School ensure parents can rest easy knowing their kids are getting grade A schoolin’ (see what we did there?).

East Austin: 78721
Though the days of finding a $200,000 fixer-upper in this ZIP are long gone, the east side is chockfull of hip amenities that make it worth the splurge. Easy access to downtown, the airport and eateries are the tip of the iceberg, according to Debbie Barrera of Realty Austin. Located in the boundaries of Airport Boulevard, MLK Jr. Boulevard and Levander Loop, 78721 offers a wide array of homes including ranch style one-stories, bungalows and condo developments.

South Manchaca: 78748
Eli Blackburn of GoodLife Realty says South Manchaca is a ‘hood to watch. The neighborhood has been undergoing a few repurposing projects, resulting in hip south Austin homes with a funky flair. Properties start in the $100,000s and average $300,000. Blackburn says the neighborhood’s expected growth in the nightlife and business sectors are major perks to consider.

Del Valle: 78617
In this Southeast Austin neighborhood, new developments and quality starter homes abound. Spacious backyards and quiet streets make it easy to settle into this tucked away ‘hood. Properties in the $150,000-$200,000 range, like this GoodLife Realty listing, ensure your money will go a long way.

The Hills of Lakeway: 78738
A balance of young professionals and executives gives the neighborhood a "Dazed and Confused meets Ivy League" vibe, according to Realty Austin's Todd Grossman. The Hills offers some luxe accommodations, including gated entrances, a swanky country club and premium restaurants. The 'hood has some pricey perks — homes are in the $750,000 range — but its casual culture ensures Austin authenticity.

Seaholm District: 78701
Urbanspace CEO Kevin Burns says the hottest ‘hood in Austin is the Seaholm District. Located in the heart of downtown, the district offers proximity to top local attractions. Urbanspace’s newest development, The Independent, will be the crown jewel of downtown, he says. The Independent is perfect for the buyer looking to live an elegant lifestyle in high-rise fashion, but Burns advises to secure a unit quickly. “Plan ahead,” he says. “These are such hot properties that they get sold out well in advance.”

The Hills of Lakeway offers luxury homes like this one at 9 Monarch Oaks Ln.

Lakeway Hills Home

Courtesy of Realty Austin

The Hills of Lakeway offers luxury homes like this one at 9 Monarch Oaks Ln.

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real estate report

How Austin fits into Zillow's predicted housing market growth in 2025

South Congress Avenue in Austin, Texas

Photo by Justin Wallace on Unsplash

Potential homebuyers in Austin may see improving mortgage rates and home prices in 2025, according to Zillow.

It looks like a few more people are about to turn their online home shopping daydreams into reality in 2025. Zillow, the famous real estate listings website, says in a press release that next year will likely bring "a gradual but bumpy decline in rates, impacting sales and price growth."

It attributes the forecast to "erratic and dramatic mortgage rate movements" throughout 2024, which will continue to affect the market. The website's housing market predictions report estimates that 2025 will see about 100,000 more sales than 2024, that home value growth will be "low and slow" at 2.2 percent, and that inventory and new listings will continue recovering from pandemic weakness.

On a local scale, Zillow's latest data shows Austin has already experienced a 3.4 percent drop in annual average home values from 2023 to 2024, which will continue fluctuating in 2025.

As of November, Zillow's home value index says the average home in the Austin metro is worth $443,995. That figure is greater than the Austin Board of Realtors' median home sales price in Austin-Round Rock-San Marcos, which came out to $435,000 last month, reflecting an estimated 2.4 percent increase for just the month of November year-over-year from 2023.

Pick the right season to buy
Potential buyers may see better opportunities for purchasing a home during the fall and winter, which is a typically slow season for home sales. Across 36 out of the 50 biggest U.S. metro areas, Zillow's heat market index showed a drop in competition from October to November.

"There's a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path," said Zillow chief economist Skylar Olsen in the release. "Those shopping this winter have plenty of time to choose and a relatively strong position in negotiations."

Zillow suggests buyers may have the ability to negotiate "from a position of safety" during the slow winter months. This is especially true for Austin-area buyers, who only saw 10.4 percent of homes sell for more than their listing price in October. The website says buyers can take advantage of opportunities to buy contingent on inspections or repairs, and they may avoid bidding wars during this time.

"While the number of options available to shoppers today are lower than they will likely see in the spring, there's also less competition in the field," the report says. "The [national] share of homes that sold for more than list price was below 28 percent in October (the latest data available), continuing a downward trend that began in July."

Buyers will head to the Southwest
Eyes are also turning to the American Southwest as the top region for homebuyers in 2025, as 13 major metro areas – including Austin and San Antonio – are now considered “buyer’s markets” where buyers have more negotiating power than sellers.

However, this prediction depends on the gravity of falling mortgage rates. Homebuyers should also keep a close eye on mortgage rates in 2025, which could drop unpredictably like they have been for the last three weeks in a row. If the rates dip further than expected, that doesn’t bode as well for buyers.

“It is anticipated that a significant mortgage rate dip would bring more buyers than sellers back to the market, increasing competition and tilting negotiating power in favor of sellers,” Zillow says.

Small-home living is gaining traction
As Austin and other major cities are battling for more high density housing, buying trends are also leaning towards smaller (and more affordable) homes.

Zillow even goes as far to say that the “pandemic-era need” for large houses is officially a thing of the past.

"The term 'cozy' is appearing in more listing descriptions — 35 percent more in 2024 compared to 2023 — reflecting current design trends that have shifted away from cavernous open floor plans, toward contained spaces that have their own style and purpose," the report says.

housing market zillow

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