Distressed properties (short sales, foreclosures) generally comprimise about 7% or less of the entire sales in the Austin Area. They almost always are in below average to poor condition with some exceptions. Additionally, this aspect of our market will usually be located in Suburban areas, thus not so much an option for Urban Homestead Goals.
If Suburban markets are of interest, new homes can be very competitive since the condition and cash out of pocket for these distressed homes is very likely. The time to actually close taking ownership is 2 - 4 times as long as a 'normal' sale. Lastly, there is a ton of professional competition (investors) who are also looking to buy them with cash. When banks have an option for a cash offer or a low down payment (higher loan to value) offer, cash could win out in buying these distressed properties.
So unless you are OK with these obstacles distressed properties are probably not for you & at the very least should only be counted on in 10% of your pursuit for a Homestead.