Austin Home Values Keep Falling After 25% Peak Drop

Austin's trajectory stands apart even among other pandemic-era hot spots like Boise, Denver, and Phoenix. Joel Berner, a senior economist at Realtor.com who lives in Austin, described the pattern as an inverted swoosh: a quick jolt up followed by a long drift down. In July, the typical asking price was down nearly 12% from a year earlier. The number of homes on the market in the Austin area stood at roughly 12,700, up from about 8,000 in July 2019.

"The market got super out of whack, super quickly," Berner said. "We're just still slowly recovering from that."

Longer term, forecasters remain bullish. Austin has drawn more high-income workers than any other market since 2019 and has the largest share of millennials, according to Keith Hughes, an Austin-based executive at the housing research firm Zonda. The metro ranks top in Zonda's nationwide "fundamentals" ranking, which considers demographics and employment. Builders are laying groundwork for future developments with an eye on 2027 and beyond. "The underlying conditions support a comeback," Hughes said.

Cynthia Mattiza, a longtime Austin agent, said she is marketing one home for clients who bought in 2022. The experience is jarring because they bought at a time when the attitude was "whatever it takes to win," and now they are pricing at a loss. "We're just thankful to receive any offer sometimes," Mattiza said.

Some agents are becoming more selective. John Mundell, another local agent, said he might take a pass on a client whose home has been languishing on the market, since the money he would make may not justify the months of work. "I'd take anything before," Mundell said. "Now I'm just being a little more selective."

Berner, the economist, received a property tax ruling on his central Austin home in July, a 12% reduction in its assessed value. He said he would have stayed renting if he had known the home would not appreciate in three years. "But I didn't have that crystal ball," he said.

Signs of stabilization are emerging. Pending sales in June were up 11% year over year. Price reductions are less common than a year ago, suggesting sellers are getting more realistic. "Sellers have just been slowly adjusting to meet buyers," Berner said.

McPherson, now back in his hometown of Phoenix, tried renting out his Austin home in June 2025. The $2,500 monthly rent did not cover his $4,000 mortgage and other expenses, though it bought him time. With those tenants gone, he is facing a situation that has worsened as more new construction crops up. "Life taught me an expensive lesson," McPherson said. "Hopefully, I don't repeat these mistakes."