If you're researching the 78704 zip code, you're looking at some of Austin's most desirable real estate. This patch of South Austin — stretching from Lady Bird Lake south through Zilker, Bouldin Creek, Travis Heights, and Barton Hills — has become the epicenter of luxury new construction in the city. It's also one of the most nuanced markets to navigate without local expertise.

I'm Derrik Davis, and I've lived and worked in these neighborhoods for over 15 years. My family chose Barton Hills for the schools and the lifestyle, and that decision shaped my entire career. Through PTA meetings, Boy Scout events, and years of neighborhood involvement, I built relationships with the homeowners, builders, and architects who shape this market. I've closed over $35 million in developer transactions and sourced more than 14 off-market lots for builders and investors — most of them right here in 78704. This guide reflects what I've learned living, building, and selling in these neighborhoods.

There are plenty of desirable zip codes in Austin. Westlake has the schools. Downtown has the walkability. East Austin has the energy. But 78704 is the only area where you get Zilker Park, Barton Springs Pool, the Greenbelt, Lady Bird Lake trail access, South Congress dining, and top-rated elementary schools — all within a few minutes of each other. That combination doesn't exist anywhere else in the city.

What makes 78704 particularly interesting right now is the transformation happening at the lot level. Most of these neighborhoods were originally built in the 1950s and 1960s as modest ranch homes. As Austin grew, the land beneath those homes became far more valuable than the structures on top of them. Today, a teardown lot in Barton Hills or Zilker regularly sells for over $1 million, and the new construction going up on those lots ranges from $2.5 million to well over $5 million. The market has shifted from what the old house is worth to what the new house could be.

The Austin market has changed significantly since the 2021-2022 boom, and 78704 has felt that shift as much as anywhere. During the peak, new construction was selling at $1,100 to $1,200 per square foot, and lot prices doubled in a single year — I personally saw lots on my street in Barton Hills go from $875,000 in early 2021 to bidding wars above $1.5 million by spring 2022. Some builders were running 15 to 20 projects simultaneously, all betting that prices would keep climbing.

That bet didn't pay off for everyone. When interest rates spiked in the summer of 2022, pricing corrected quickly. Builders who had overextended went under. The ones who survived are the smart operators — they tightened their processes, value-engineered their builds to hit realistic price points, and focused on the finishes and features that actually move the needle for buyers. Today, a well-built new construction home in 78704 typically trades around $1,000 per square foot. That's a healthy number for buyers who know what they're getting, and it's a sustainable number for the builders who are still standing.

A significant portion of 78704 real estate trades off-market — properties that change hands through personal relationships before they ever appear on the MLS. This is especially true for land. Builders and developers don't want to compete in a bidding war when they can acquire a lot quietly through the right connection. And many longtime homeowners in these neighborhoods prefer to sell discreetly rather than go through the public listing process.

This is where hyperlocal relationships matter more than any algorithm. There are only 5 or 6 active builders, roughly 10 agents, and 3 or 4 architects doing 90% of the work in 78704. If you know everyone in that circle, you see opportunities before anyone else does. If you don't, you're working from public data that's already outdated by the time it hits your screen. In my experience sourcing 14-plus lots off-market, the best deals happen because a neighbor mentions they're thinking about selling at a school function or a builder mentions they need a specific lot size at a site visit. Being embedded in the community is the unfair advantage.