By Nancy Keates | Photographs by Brenda Bazán for WSJ

Texas Hill Country — Three years ago, Jen Bachman noticed a woman who had started coming in twice a day to the cafe she owns with her husband in Wimberley, Texas, a small town about 45 miles southwest of Austin. The woman, Linda Nelson, said she'd made all her husband's meals for over 40 years, and now that he'd died, she never wanted to cook again. Bachman made a coffee mug emblazoned with "Linda" for her to use, and hung it on the wall between Linda's meals.

She started doing the same for other regular customers, and now there are around 1,500 personalized mugs at Wimberley Café. Demand for the mugs got so strong that Bachman limited hanging them on the walls to customers who ate there at least five times a week. She's up to making around 25 new mugs a month, and is running out of wall space. "There are so many people here now, I can barely keep up," she said.

Wimberley is one of several small towns ringing Austin to the west that have exploded with growth over the past six years. The surge started as a reaction to Austin's pandemic housing boom, when waves of remote workers and big-tech companies like Tesla and Oracle moved there. There were 729 Austin homes sold for over $1 million between January and April of this year, compared with 262 for that same period in 2019, according to Unlock MLS.

People looking for less-expensive homes and more space moved out to nearby towns like Wimberley, Dripping Springs and Spicewood. These areas are part of Texas Hill Country, a region of farm and ranch towns that have long attracted city dwellers looking for a rural getaway. An hour's drive or less to Austin, these towns are now seen as good spots for weekend homes and, in some cases, for commuting.

Median home prices, and the number of homes sold over $1 million, in these towns soared between 2019 and 2023, according to Unlock MLS. Prices have started to soften over the past two years, but they are still significantly higher than they were before the pandemic. "Austin just keeps getting bigger and more expensive. The luxury market has spread out to these areas," said Vaike O'Grady, market research adviser for Unlock MLS.

In Wimberley and Dripping Springs, there are now more restaurants and shops, and retail sales have increased by around a quarter since 2020, according to data from research firm the Retail Coach. New golf, country-club and wellness communities are popping up near Spicewood, including a Canyon Ranch. Architects say they have been doing double the number of home renovations and new-build projects all over the area. More artists and musicians are leaving Austin and taking up residence in these more-affordable markets.

It isn't utopia. Development, combined with drought, has caused a shortage of water resources. The towns are getting more crowded, which means there is a lot more traffic and noise. But the sense of community is still strong.

When Linda didn't show up one day at the Wimberley Café, Bachman drove to her home and found that she'd fallen. Linda's mug is now hanging on the cafe's memorial wall.

Dripping Springs

Median home-sale price: $600,000, up 23% from 2019

Homes sold over $1 million in 2019: 4%

Homes sold over $1 million in 2026: 13%

Known locally as "Dripping" or "Drip," this town is known as the Gateway to Texas Hill Country because it's only about 40 miles southwest of Austin, and has become increasingly attractive to commuters. A Highway U.S. 290 improvement project, expected to be completed later this year, allows drivers to travel from downtown Austin to Dripping Springs without stopping at a traffic light.

Magdalena Rood moved here with her husband, Leslie Moore, from central Austin, where they'd lived for over 30 years, in 2021 because the city had become too noisy and crowded. She hadn't considered it before. "Dripping Springs was an intersection for me. It was a country drive. Just one of those dots that sat around Austin," said Rood, 77, who runs a special-events venue in Kyle, Texas, with her husband.

The couple paid $1.1 million for a 2,400-square-foot house on 5 acres, then did a $600,000 renovation that added living space and a swimming pool. The project was completed in 2025. "In every way you can think of, it's wonderful," said Rood. "I don't have to see other houses when I look out the window. I don't hear other people. I just hope it stays that way."

New subdivisions are popping up all over town. Since 2021 there have been 3,757 new homes built, with 11,000 more to come by 2034, according to the Dripping Springs Chamber of Commerce. The number of children in the town's public schools has grown by 61% and is projected to surpass 10,000 students during the 2026-27 school year, according to the Dripping Springs Independent School District. A Target is slated to open in 2027.

On a weekday in May, coffee shops and restaurants around Mercer Street, the main retail area, were quiet. But locals say that changes in the evenings and on weekends.

The town's traffic is up 35% since 2016, according to the Retail Coach, and rush hour can be brutal. "It's busting at the seams," said Anna Naumann, a real-estate agent with the Elite Property Group.

Wimberley

Median sale price: $600,000, up 73% from 2019

Homes sold over $1 million in 2019: 0%

Homes sold over $1 million in 2026: 25%

Wimberley, surrounded by creeks and streams, made the national news in 2015 when the Blanco River flooded, killing 13 people and destroying homes. The town is known for its quaint square, which attracts tourists, as well as artists and musicians, including Paul Simon and Edie Brickell, who bought a house there in 2022.

When Alice Lebkuecher, an agent with Keller Williams Realty, was growing up in Wimberley in the 1980s, there wasn't even a stop light, she said. Now, said architect Tommy Horine of Wimberley-based Burleson Design Group, "it's like spring break every day."

Paige and Darren Logsdon, both 56, recently built a $5 million house on around 500 acres owned by Paige's family. The retired couple had lived in Austin for 11 years, but wanted to get away from the increasing chaos of the city, said Paige. They also wanted more freedom: They'd asked architect Winn Wittman to design a modern house in their Austin neighborhood, but there were too many restrictions.

In Wimberley, Wittman was able to design exactly what they wanted: an open, 3,500 square-foot house with two bedrooms, floor-to-ceiling glass and a big swimming pool.

"I'm not much of a country girl. I never imagined myself living here," said Paige. "But I absolutely love it. It's relaxing here."

About a block from Wimberley's main square, Kirby Attwell, 59, is in the process of building a 3,860-square-foot, three-bedroom house for around $2 million. Attwell's wife's family has long owned property in the area and he has been visiting there most of his life; he moved fulltime to Wimberley about 13 years ago.

It's still their happy place. But lately he's turned into a "grumpy old man," he said. "We used to have one busy weekend a month. Every weekend is packed now," he said. Concrete and construction trucks clog the roads, and he hears music and fireworks all the time. "It used to be totally silent at night," he said.

Spicewood

Median sale price: $620,000, up 34.4% from 2019

Homes sold over $1 million in 2026: 23%

Homes sold over $1 million in 2019: 4%

It's the views and wide-open space that attract people to Spicewood, according to real-estate agents. Even though it's about the same distance from Austin as Wimberley, it feels more remote. "You can be driving on the freeway, and you'd never know you were in Spicewood," said Ricky Cain, founder of Cain Realty Group. There is no real town center, and the closest grocery store is in a neighboring town called Marble Falls, a 20-minute drive away.

The area has seen a surge in gated golf and country-club communities, including the Travis Club, a 1,500-acre development with 700 homesites ranging from a half-acre to nearly 4 acres, with lots starting in the $700,000s. Many of the buyers looking in Spicewood are from Houston or Dallas and want to retire there, said Cain.

Russell and Rebecca Young, who live and work in Austin, bought a house on Lake Travis in Spicewood in 2020 for $700,000. They tore it down and built a new home in its place, finishing in June 2023, for what Russell said was several million dollars.

Russell, 48, a commercial real-estate broker, said they went all out because that's where they love spending time with friends and family in the summer and on weekends, and where they will eventually retire. "It's our reward," he said.

The area around them is quiet now, but a 2,200-acre master planned community called Thomas Ranch is under way. There will be a commercial district with a grocery store, health clinics and restaurants, along with schools, golf courses and 3,500 residential units. "There aren't a lot of conveniences in Spicewood now, but everything is changing," said Lesli Akers, an agent with Akers Legend Team.

Write to Nancy Keates at Nancy.Keates@wsj.com