Reality TV real estate star Fredrik Eklund made his Austin debut in predictably splashy fashion, riding a horse into a party in one of the city’s priciest neighborhoods and announcing that he and his Douglas Elliman team had the house under contract for $16.25 million.
The buzz wasn’t exactly positive. It wasn’t that the horse was white, although some attendees did wonder privately whether Eklund figured the city’s luxury market needed saving. Nor was it envy: While the price was high, even for one of the nation’s hottest residential markets, most of the brokers at the event had plenty of big sales under their belts.
The offense was that the former “Million Dollar Listing New York” mainstay revealed the price at all. That’s a big no-no in Texas, where home prices are kept from public records, away from the prying eyes of tax assessors. For Austin’s luxury real estate cognoscenti, it was a record-scratch moment.
Long before Eklund — who finished at the top of the heap in New York City’s brokerage rankings — headed to Texas with boots and saddle in hand, a group of small residential brokerages dominated the luxury market in the state’s capital. Plenty of blond hair and occasional Western wear did enter the picture, but high-profile hijinks were rare. Instead, local brokers relied on firsthand knowledge and the kind of subtle flex that telegraphs insider status while letting clients take center stage.
Now that may be about to change. Big out-of-state players have established themselves in Austin, a rapidly growing metropolis with a housing inventory that’s shrinking just as quickly. Some 3,357 homes that cost $1 million and up sold for a total of $5.6 billion in 2021, according to the Austin Board of Realtors. Given the number of off-market deals and the state’s nondisclosure rules, the actual figures are likely much higher. Homes selling for $10 million or more are especially hard to find these days.
“The luxury market continues to be as hot as we’ve ever seen it,” Austin Board of Realtors President Cord Shiflet wrote in an email, citing a battery of statistics for February. “It will be interesting to see what these numbers look like as more homes come on the market over the coming months, as we’re entering the hottest time to sell homes of the year, the spring market,” he added.
Local brokerages dominate
There’s plenty of commission wealth to spread around, but a handful of longtime local brokerages dominates the residential luxury market. A number of them are also partners in Austin’s most high-profile luxury residential projects, including the Independent, the Austonian, Austin Proper and the Modern Austin Residences.
The Facebook page for Elite 25 Austin, meant to represent “the best of the best” luxury real estate professionals, offers some clues to this phenomenon. Although it includes brokers from Kuper Sotheby’s, Engel & Volkers and other large international luxury groups, membership is dominated by local brokerages — notably, Moreland, Gottesman, Urbanspace, Austin Portfolio and DEN. Eklund isn’t a member, nor is anyone else from Elliman.
How one gains entrance to the group is a bit of a mystery, at least for outsiders. Just to be considered this year, agents had to have made $15 million in total residential sales and sold at least five properties for more than $1 million each in 2021.
The old guard has lifetimes of local experience and connections in its favor. That can come in handy when dealing with celebrities who want to buy in Austin partially because it’s low-key. It also helps to understand that most old-money Texans aren’t interested in showing off.
When he was growing up on Lake Austin, for example, broker Eric Moreland learned that “the richest people are the ones in the old pickup trucks.” Moreland Properties, which is well-represented in the Elite 25, is a partner in Four Seasons Residences Lake Austin, a 145-acre luxury condo development west of downtown with views that bring to mind the Hollywood Hills. Its 179 residences measure 1,900 to 7,000 square feet and start at $4.1 million — a decent payday for the exclusive broker.
“Big names and big budgets don’t translate to more success” in the Austin luxury market, said DEN’s Bryan Cady in a phone interview. “Austin has done a really good job of exporting brands — Yeti, Whole Foods, Dell, Tito’s. But it’s very difficult to import brands into Austin, even regionally. There’s a culture of authenticity, and it’s hard to import that.”
Competitive not cutthroat
All that’s not to say that Douglas Elliman, with 276 agents in the state, hasn’t made inroads. The New York brokerage expanded to Texas only three years ago, opening in Houston in 2019 and moving swiftly into Dallas, Austin and San Antonio after that. The company had $937 million in sales volume in Texas last year, up 105 percent from 2020.
Douglas Elliman was one of a wave of luxury-focused realty companies that expanded to Austin in the past few years. Kuper-Sotheby’s arrived in 2014, when it bought well-known local company Amelia Bullock. Another luxury real estate group with deep roots, Turnquist Partners, became an Engel & Volkers franchise in 2015. Compass isn’t focused exclusively on the luxury market, but it absorbed a number of boutique Austin brokerages as franchises when it arrived in 2019.
Douglas Elliman took a measured approach when expanding into Texas cities, said Stephen Kotler, CEO of the company’s Western region. “You don’t want to be the big bad wolf that comes in and swallows up other companies and destroys them,” he said. “We like competition.”
“Austin is competitive but not cutthroat” in the way New York “or even Dallas and Houston” can be, Cady said. “Here there’s still a sandbox mentality in terms of playing well with others. But those who think they can come in and dominate the market will be surprised.” Cady, who has a degree in architecture, likened the approach to a market to that of a building site. “One of the most important things on a job,” he said, “is to understand site conditions and context.”
“They’re all very mature, metropolitan cities,” says Kotler of his company’s Texas expansion areas. “Fredrik Eklund put on a show. But quite frankly, the brokers that operate in these three markets are no different from the brokers that operate in Beverly Hills or in Greenwich, Connecticut, or Miami, Florida.”
There’s one exception. “If you’re doing certain kinds of business, especially if you’re doing ranches, it’s pretty good to have a Ford F-150,” he said. “You get a lot of respect if you pull onto the property in a pickup truck. That is a thing down in Texas for sure.”