Prospective homebuyers in the Austin area are facing an increasingly difficult hurdle. Austin-area houses hit a record median sales price of $476,000 in January, thanks in part to the expansion of major tech companies, plus other factors such as low mortgage interest rates, housing supply shortages, and a booming state economy. Nonetheless, there are still options for those with an open mind about location and renovations.

Real estate agent Carlye Jane at Twelve Rivers Realty says hope for new homeowners lives in “pocket neighborhoods” — smaller subdivisions with a mix of older and newly built houses. Using February housing reports from the Austin Board of Realtors, Jane identified a roughly current median price of $565,000 for homes in the Austin city limits. (This is higher than it would be for the greater Austin area, with houses further from the city center).

“I keep hearing people talk about crash…Realistically as somebody who's in it every day, I really don't see that,” says Jane. Considering the rental market is under pressure, too, she suggests thinking about long-term cost. “My advice for anybody who's thinking about buying a house is just to do it, and do it as soon as you can.”

Jane picked five promising Austin ZIP codes for new homeowners, with listings near the Austin median price of $565,000. These pocket 'hoods are all located north of Buda and south of Pflugerville.

78748 — Buckingham Estates, Olympic Heights, Bauerle Ranch
This area mostly centers on West Slaughter Lane and Menchaca Road, bounded on the east by I-35. Jane points out businesses that have made the far south portion of Austin exciting to an increasing number of recent homebuyers, including Armadillo Den, Lustre Pearl South, and the Moontower Saloon. Even as Austin continues to spread south, this area contains two substantial nature parks. Buckingham Estates offers smaller homes built in the '80s, while Olympic Heights and Bauerle Ranch have newer, more modern homes.

78744 — Springfield, Dove Springs, Crossing at Onion Creek
Check on Zillow and there are almost always houses listed around McKinney Falls State Park, a beautiful collection of pools situated around Onion Creek. While Jane acknowledges parts of this ZIP code are in high demand, there are three neighborhoods where first-time homebuyers will see more of a range in prices. These woodsy little subdivisions give daily opportunities for country living without sacrificing relatively easy access to downtown and major businesses along I-35.

78727 — Milwood, Lamplight Village
Austinites staying close to offices up north tend to center around Parmer Lane, one of the last Austin landmarks before Pflugerville. While these neighborhoods are a bit of a drive from downtown, they’re right across from bustling urban outposts the Domain and the Arboretum. Although these neighborhoods offer easy access to lots of businesses, they’re also close to one of Austin’s sprawling green spaces, the Walnut Creek Metropolitan Park.

78728 — Wells Branch
Most of these neighborhoods represent cute, smaller homes that save money by squeezing onto less land. Jane recommends Wells Branch for homebuyers looking for a little extra space without breaking the bank. It’s about as far from downtown as one could get without hitting Pflugerville, but that far north, Mopac and I-35 are only about 2 miles apart, so the drive is pretty straightforward. It’s also a chance to get to know the less-crowded Austin suburbs of Round Rock and Georgetown.

78754 —Pioneer Crossing
This northeast area is one of Austin’s sparsest, offering opportunities to spread out without straying as far north. The houses at Pioneer Crossing border the Walnut Creek Greenbelt and Jourdan-Bachman Pioneer Farms, a common field trip and movie set destination. That means daily walks could include longhorns, donkeys, and the sound of blacksmiths working. Lots of new developments are popping up in the surrounding area, meaning something is always available and usually affordable.

With record low inventory and record high prices, finding your first home in Austin's red-hot market is becoming increasingly challenging. But a new analysis from Zillow identifies a key area of real estate that could afford big opportunities to those trying to break into the market for the first time.

In 2020, single-family home sales soared (both nationally and locally), but condo sales were left behind, the real estate authority says.

While single-family home inventory dropped, condo inventory recovered and rose, and the national median condo sale price rose just 7-8 percent year-over-year, compared to single-family home prices growing by14 percent. Another bonus: condos generally are priced lower than single-family homes(in November, the median-priced U.S. condo sold for about $41,000 less than a home).

“Condos provide a unique opportunity for prospective buyers looking for a foot in the door, especially in markets where house prices have risen out of reach or where proximity to urban centers is a priority,” says Nicole Bachaud, economic data analyst at Zillow, in a release.

Notably, Austin is one of the hot U.S. markets where condo inventory was on the rise year-over-year. Local condos sold for far less than single-family homes. Here are the highlights of the Austin metro area's condo market, according to Zillow:

• In November, the median sale price for a condo was $315,667, $56,000 less than a single-family home.
• The condo sale price rose 3.6 percent year-over-year in November, compared to 16.2 percent for a single-family home.
• In December, available inventory for condos was up 20.8 percent year-over-year, while inventory for single-family homes was down 35 percent.

“In scorching-hot markets like Austin, competition for single-family homes is extreme. Prices in desirable locations may feel like they are climbing out of reach for first-time homebuyers, but condos are often an affordable alternative to large single-family homes," Bachaud says.

"Their lower prices and shared amenities, like landscaping and roof maintenance (a few items that can carry shocking price tags for new homeowners) can help a first-time buyer ease into homeownership and begin to build equity. As home values rise over time, these buyers can trade up to something bigger in just a few years."

Zillow's report shows a similar trend in other top Texas markets, especially in terms of affordability.

In Dallas-Fort Worth, the median sale price for a condo was $206,150 in November 2020, $97,183 less than that of a single-family home. And in Houston, the contrast is even more stark. There, the median condo price was $149,633 in November, a significant $117,533 less than the price of a single-family home.

Bachaud notes that mortgage rates are at near historic lows, which can help ease monthly costs, but she reminds that condos typically come with HOA fees that should be considered when calculating monthly expenses. And, while "shared amenities like a pool or gym aren’t exactly popular during the pandemic, [they] should regain their luster as the virus is contained."