Austin’s residential real estate market is moving in two directions at once. The resale segment is facing challenges, particularly for some homeowners who purchased between 2021 and early 2024 and now have limited equity or may owe more than their homes would sell for. New construction, meanwhile, is attracting buyers through financing incentives, driven by builders with enough capital to buy down mortgage rates – incentives that individual resale sellers may find difficult to match. For buyers deciding between the two, the type of home now matters as much as the location or the price.
Jovanny Garcia, a solo agent with eXp Realty in Austin who also runs a construction company, sees the divide up close. She currently carries 12 active listings and at one point this year had 19. Some sell on the strength of pricing and marketing. Others linger despite both.
“The resale aspect of our market right now is pretty difficult,” Garcia says. “Some people who bought between 2021 and early 2024 have limited room to negotiate, and some may be upside down on their loans.”
The competitive imbalance between resale and new construction in Austin comes down to financing. Builders sitting on significant cash reserves are investing that money directly into rate buydowns for buyers – incentives that individual resale sellers may find difficult to match.
Garcia points to a builder offering a below-market financing incentive. For a buyer comparing that against a resale home financed at prevailing market rates, the monthly payment difference is large enough to shift the decision entirely. Resale homes sit longer as a result, and longer days on market erode buyer interest further.
Garcia has also seen some higher-priced resale homes move quickly. She notes that homes priced around $1.5 million and above are still moving. She cites a $2.5 million home that went under contract in 14 days earlier this month. “That market is definitely still standing strong,” she says. Some buyers at that price point may be less sensitive to mortgage rates.
For resale sellers who need a price adjustment, Garcia focuses on meaningful reductions that reflect competing properties and buyer search brackets.
“I don’t decrease by $1,000 or $5,000,” she says. If a home is listed at $400,000, one possible target is $375,000, which reaches buyers whose searches are capped at that amount. A cut that lands between brackets struggles to capture a new audience.
Garcia acknowledges that sellers often list above her recommendation. “It’s understandable that sellers see the value in everything they’ve put into their homes,” she says. “My job is to help them understand how buyers are comparing those homes in today’s market.” The adjustment comes after the listing has had time on the market and the seller has seen the response. Several of her closed transactions this year resulted from reopening a different buyer bracket after an initial overpricing.
Assumable mortgages have attracted attention as a strategy for locking in below-market interest rates. Garcia promotes them selectively but cautions that buyers need to understand how they function.
The issue is the gap between the remaining loan balance and the sale price. If a home carries a 2.875 percent rate but has a remaining balance of $150,000 on a $300,000 sale, the buyer assumes only $150,000 at that rate and must cover the remaining purchase-price gap with cash or separately approved financing, if available. The advertised rate applies to only half the purchase.
Garcia promotes assumable loans when the gap is small. One of her current listings is priced at $320,000 with a remaining balance of $298,000. “That doesn’t leave a huge gap between what the buyer has to bring to the table,” she says. In that scenario, the difference between the asking price and the remaining loan balance is approximately $22,000 before closing costs. Subject to approval, the buyer can assume the existing loan’s rate and remaining repayment terms, potentially securing a lower payment than a comparable new loan at current rates. The principal-and-interest payment does not automatically decrease simply because the remaining balance is lower than the original loan amount.
Garcia works extensively with Hispanic buyers, self-employed borrowers, and international purchasers – groups she says other agents unfamiliar with the lending options available to them struggle to serve.
ITIN holders – buyers who use an Individual Taxpayer Identification Number rather than a Social Security number for tax purposes – may qualify through specialized lending programs, with down-payment requirements varying by lender and borrower qualifications. Self-employed buyers may qualify through traditional income documentation or alternative programs, such as bank-statement-based underwriting, depending on their circumstances and lender requirements. “A lot of agents just don’t know that there’s a plethora of loan products to help these people,” Garcia says.
International buyers face a different set of hurdles. Garcia recently helped a buyer from Guadalajara, Mexico purchase a home in Austin – a transaction that required setting up an EIN, coordinating with a CPA, arranging legal counsel, and managing title work with cross-border considerations. That preparation helps buyers address ownership, tax and title considerations before closing, including potential FIRPTA withholding obligations if they later sell as foreign persons. “It takes a village to help certain types of buyers,” she says. “These transactions require coordination among the agent, lender when financing is involved, title company, CPA and attorney so the buyer understands the requirements and their options.”
Buyer hesitation is the dominant mood Garcia encounters across her client base. Her response is to anchor every purchase decision to a comfortable monthly mortgage payment rather than the maximum pre-approval amount.
The logic is straightforward: a buyer who locks in a home at today’s prices with a payment they can sustain is positioned to benefit if rates decline and refinancing makes financial sense. Garcia illustrates with a hypothetical. A buyer comfortable at $2,500 a month purchases at a 6.5 percent rate. If rates fall to 5.5 percent and the buyer qualifies to refinance, the principal-and-interest payment may decrease, depending on the loan balance, new repayment term and refinancing costs. The buyer can then apply those savings to principal each month – since the $2,500 payment was already comfortable – or keep the difference. The purchase should make financial sense based on the buyer’s current budget, without depending on a future refinance or increase in property value.
“Buyer agents need to go more in depth into the conversations with their clients to better help them understand how you can take advantage of this market and not listen to the noise,” Garcia says.
Garcia’s broader advice to buyers and investors echoes the same principle: evaluate expertise beyond online visibility. “Social media can be a great way to find an agent, but buyers and investors should also look at relevant experience, communication, and the ability to explain the numbers and risks behind a transaction,” she says.
“I want my clients to buy a home they can comfortably afford today,” Garcia adds. “A future refinance should be an opportunity – not something they need to make the purchase work.”
About the Expert: Jovanny Garcia is an agent with eXp Realty in Austin, Texas, who also runs a construction company and works extensively with Hispanic, self-employed, and international buyers.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
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