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Highland Lakes housing market down from 2021 pace but still steady

Houses under construction at Thunder Rock in Marble Falls

Houses under construction at Thunder Rock in Marble Falls, a 1,073-acre mixed-used subdivision with 1,900 homes and 500 multi-family units. The development is located on the northwest corner of Texas 71 and U.S. 281. Staff photo by Nathan Bush

EDITOR’S NOTE: This story is part of a series titled “Small Towns, Big Changes” that launched in the August issue of The Picayune Magazine. The series delves into the facts and figures behind the rapid development in the Highland Lakes and what it means for the people who call this region home, whether newcomers or longtime locals. 

The Burnet County housing market has cooled since it blew out the temperature gauge in 2021, but it’s still operating at all-time highs as developers build both single- and multi-family homes and the population grows. 

Realtor Dale Brown of Dale Brown Properties has seen that growth firsthand. The lifelong Marble Falls resident has been selling property since 2011 and has a strong grasp on the ebb and flow of area real estate.

“People want to come here,” he said about the Highland Lakes. “It’s always been a desirable area. The (COVID-19) period was such craziness. People really paid too much for properties. It was such a weird time.”

Recent interest rate hikes by the U.S. Federal Reserve have slowed buying, Brown said, but not stopped it, especially for high-dollar property.

“Interest rates have really taken some people out of the housing market,” he said. “They were used to 2 or 3 percent (interest rates), and now, all the sudden, it’s 7 or 8 percent. They can’t afford it.”

Wealthy homebuyers have been less affected by the jump.

“What we’re finding is the higher-priced market, say $1 million up, is still pretty strong because those people, a lot of them, are paying cash,” Brown said. “They’re not worried about the interest rates. They don’t affect them.”

Single-family home inventory has remained relatively stable over the past few months, with supply meeting demand.

“Inventory is better than it was during COVID,” Brown said. “During COVID, anything you had, if it was decent, it sold. Inventory was really depleted. It’s come back and much better.”

Prices have started to drop, too, he said.

“It’s more of a buyers’ market than it has been in the last two or three years,” he said. “We’re seeing prices come down, and there’s not as many buyers out there.”

While prices are falling across the housing market, the cost of starter homes remains inflated.

“An entry-level home is $400,000 and up,” Brown said. “That’s a pretty big mortgage payment with interest rates at 7 or 8 percent.”

The lack of affordable options have forced many first-time homebuyers to opt for multi-family residences as they wait for market conditions to cool. 

“You wonder why someone who can pay $1,500 a month on an apartment can’t buy a house,” Brown said. “A lot of them can’t afford the down payment, for one, or they can’t afford a $3,000-a-month mortgage, which I get because that’s pretty tough. I think a lot of the apartment dwellers are homebuyers and they’re just waiting until they can get into a house.”

Highland Lakes Realtor Dale Brown
Realtor Dale Brown has been selling homes in the Highland Lakes since 2011. He has lived in the area his entire life. Staff photo by Nathan Bush

Marble Falls appears suited to soak up incoming renters as it prepares to up its multi-family inventory from 1,200 units to 2,800 units over the next few years. 

“We’re more than doubling our housing stock in multi-family,” said Kim Foutz, director of the city’s Development Services. “Apartments are all over. We’ve got them north, we’ve got them south, we’ve got them inner city, and we’ve got them on the outer portion of town.”

As far as single-family homes in a typical subdivision environment, the focal point has been the Texas 71-U.S. 281 intersection. Homes in Gregg Ranch and Thunder Rock start at $400,000 and are both bringing hundreds of new addresses to the area. Similar developments are planned for adjacent acreage at the crossroads to Austin and San Antonio.

“Gregg Ranch is moving forward with their Phase 3 right now,” Foutz said. “Thunder Rock will probably be hitting (the next stage) in October. They’re selling out of lots and ready to move on.”

The subdivisions’ proximity to Austin make them particularly popular among residents of Travis and Williamson counties who are looking to move out of even higher-priced markets. Many of these new residents work from home. 

“Austin was just named No. 4 in the nation for remote working,” Foutz said. “Before COVID, it was about 10 percent of the (Austin) population. Now, it’s at around 30 to 32 percent. What that does is people start looking around and asking where they really want to live.”

Another subdivision, Legacy Crossing, has proposed developing 1,342 single-family homes, 264 multi-family units, 150 mixed-use townhome units, six public parks, and over 100 acres of commercial space for the southeast corner of the 71-281 intersection. Although approved by the Marble Falls City Council in August 2022, the development has a ways to go before it breaks ground.

“It’s got a lot of multi-components and mixed-use,” Foutz said. “They’re coming in and doing all the major planning and lots of dust in the air as far as work, but they haven’t come in for platting yet. That’s because they’re going out to sell the project. They’ve got all their ducks in a row and everything approved. It’s not that things aren’t progressing, it’s just there’s work to be done on their part behind the scenes to make it come to fruition.”

Foutz predicted an increase in residential growth in north Marble Falls over the next six months.

“Most of it’s in the south, and you won’t see it on paper or with the City Council, but we’re regularly meeting with some large developments on the northern side (of Marble Falls) as well,” she said.

Other subdivisions outside of Marble Falls, such as residences along Texas 29 in northern Burnet County, are on 3- to 5-acre tracts, which are much larger than lots available elsewhere in the area. Demand for these lots is down from highs seen immediately after the COVID-19 pandemic.

“It’s slowed down this year, but the years before, we probably had three to four developments going on at any time with (3- to 5-acre) tracts,” said Burnet County Precinct 2 Commissioner Damon Beierle. 

The recent growth’s effect on natural resources worries Beierle, who oversees the northeastern section of the county, which includes Briggs and Oakalla.

“It strains our infrastructure,” he said. “It is a strain that we will always have to deal with. On the water situation, we need help from the state level because the more people that come here, the more water they use. That means less available (water) in the ground. It’s not a guaranteed resource.”

Water and wastewater play a major role in future growth, which will be addressed in the final story in the DailyTrib.com series “Small Towns, Big Changes.”

nathan@thepicayune.com