How to Maneuver the New Real Estate Atmosphere in the Texas Hill Country

Between its abundance of natural beauty and superb climate, the Texas Hill Country has been luring people to its scenic acres for centuries. The region has become a sanctuary for visitors, investors, and residents in our modern era. Exquisite cuisine, luscious wineries, historical sites, mile after mile of hiking trails, enormous swaths of untouched, wide-open spaces – this countryside embodies the whole concept of the word ‘idyllic.’

Whether you’ve been fortunate enough to call the Texas Hill Country home for decades or have just begun scouting out its array of land and available properties, you undoubtedly want to have a solid grasp on its real estate market. Michele Smith and her team at Reata Ranch Realty is here to answer your questions – and to help you obtain your real estate goals with knowledge and confidence. Here is their expert counsel on how to maneuver the Texas Hill Country's new real estate atmosphere and what to expect in the months ahead.

No matter where you rest on the real estate spectrum–as a homebuyer, investor, or seller–your first order of business is to engage the services of a local, exceptionally qualified real estate agent. A large part of a realtor’s job is to stay apprised of every shift in the real estate market. They also have a handle on the properties available, including luxury estates and gorgeous pieces of ranchland that aren’t publicly listed.

The properties throughout the Texas Hill Country run the gamut. Sprawling mansions with high-end amenities are just as prevalent as verdant, spacious lots for building your weekend getaway or new primary residence. Those entering the Texas Hill Country real estate market will have an abundance of homes and areas to explore, thereby upping their chances of finding the property that aligns with their hopes and vision.

In the past, some of the properties throughout the Texas Hill Country were marketed and sold through word-of-mouth as people searched for places to set up a new ranch. The growing allure of the area, however, has turned it into a leading spot to move to for employees throughout San Antonio, Dallas, and Austin – white-collar workers who have been granted the ability to perform their tasks from home (and indefinitely at that). These affluent professionals are pursuing luxury homes that provide them with the serenity they’ve been lacking in their fast-paced, cosmopolitan cities, and the Texas Hill Country satisfies their needs and wishes. Meanwhile, investors on the hunt for the perfect piece of land to construct a vacation home in the Texas countryside are drawn to the region’s extraordinary natural beauty.

Both of these types of buyers utilize the internet to start their searches. Indeed, research shows that 95% of all buyers initiate their hunt for properties online. For buyers, this underscores the need to concentrate on creating spectacular marketing materials. A real estate photographer who can capture the extraordinary landscape with drone footage, a brilliant writer who can convey the property’s most marvelous attributes, and a marketer (oftentimes, your real estate agent) who can reach a broad swath of local homebuyers and foreign investors are important for impressing your target audience and receiving multiple offers.

Economic trends have a direct and dramatic impact on the real estate market. Obviously, the robustness of buyers’ income and credit plays a substantial role in their capacity to purchase a piece of real estate in the Texas Hill Country and throughout the United States. What is less obvious is how inflation, the cost of living, and interest rates influence this.

In the last year, we have seen mortgage loan interest rates skyrocket to over 7% as the Federal Reserve endeavors to manage perpetually-rising inflation rates. This has led to a handful of scenarios: Buyers are holding off on purchasing a home because the mortgage interest rate will render their monthly payments untenable. Others are simply unable to qualify for the loan they will need to make a purchase. Others still feel a new sense of urgency in their search for Texas Hill Country real estate, hoping to secure a fixed-30-year rate now before they leap to 9%, as some experts predict.

None of this is meant to jolt you into action; rather, it’s a reminder to stay on top of broader economic trends before making the decision to buy or sell.

Predictions about the local and national real estate market abound. While some are radically different, the most prevalent prediction is that home prices will balance out roughly around the middle of 2023. This is due to what we just discussed: If rising mortgage loan interest rates continue to spike, inventory will exceed demand, and the growth rate of home prices will normalize.

For buyers, this may mean that we’ll enter a more equitable environment that will shift more in your favor, particularly when compared to the last two years when sellers consistently had the upper hand as multiple offers came in, bidding wars ensued, and buyers made offers with no contingencies and above listing price. If we move into this era, you will have greater leverage during negotiations and will be able to ask for the contingencies you desire in your Texas Hill Country property.

For sellers, this may mean needing to go the extra mile – not only in terms of the quality of your marketing materials but also in regards to your renovations (if, of course, you own a home and not a bare plot of land). In any case, this reinforces the need to partner with a Texas Hill Country real estate agent. They will thoroughly understand the larger picture, work in your best interests, direct you to properties that will appreciate handsomely, and provide unparalleled counsel on everything from the right time to buy or sell to the key contingencies you should receive before moving forward.

Michele Smith and her team at Reata Ranch Realty has the knowledge and expertise you need to land a terrific sale or find your dream estate. With specialties in Fredericksburg real estate, Llano County, and land for sale in Mason, she can help you navigate the real estate changes and challenges that rest ahead.