Austin Housing Market Update 2025: Home Price Losses Extend for Third Year

Austin Housing Market Update 2025: Home Price Losses Extend as Buyers Retain Leverage

Austin Area home prices have now entered their third consecutive year of decline, extending losses that began after the market peaked in 2022. At that peak, the median sold price hit $499,591, but projections for 2025 place the median at $432,585 — more than 13 percent below the high point. While the sharpest fall occurred in 2023, when values dropped over 10 percent in a single year, the latest numbers confirm the correction is still in motion. Sellers remain under pressure, buyers continue to negotiate below asking price, and Austin’s housing market shows no immediate signs of snapping back.

In 2023, the Austin real estate market experienced one of the steepest price corrections in modern history. The median fell from $499,591 to $448,500, a 10.2 percent year-over-year drop. In 2024, the market slipped another 1.7 percent to $440,708. Now, in 2025, the projection calls for an additional 1.8 percent loss, bringing the median down to $432,585. Although the rate of decline has slowed, the fact that prices are still slipping underscores how much leverage buyers continue to hold.

Sales volume tells a parallel story of contraction. After peaking at over 41,500 units in 2021, Austin’s transaction count has fallen sharply. In 2022, sales dropped 17.5 percent, followed by another 9.6 percent decline in 2023. Activity steadied in 2024 with just over 31,000 sales, but 2025 is projected to slip again to 30,605. This prolonged weakness in demand makes it harder for the market to find firm footing.

Another key measure, the sold-to-list price ratio, highlights the shift in power from sellers to buyers. In 2021, when demand outpaced supply, homes sold for an average of 104.8 percent of list price, reflecting intense bidding wars. By 2023, that number had collapsed to 97.2 percent, where it has held steady through 2024 and 2025. This means buyers are not just paying less than the peak prices — they are also negotiating below list, a dynamic not seen in years.

For sellers, this extended downturn means strategy is everything. Pricing homes too aggressively leads to longer days on market and larger discounts at closing. Correctly priced homes are still selling, but sellers no longer have the cushion of surging demand or above-asking offers to bail them out. Buyers, meanwhile, can afford to be selective. With inventory building and discounts in play, they hold more negotiating leverage than at any time in the past decade.

The bigger question is what comes next. Historically, Austin real estate has always rebounded from downturns, but not overnight. The last major cycle correction in 2008–2011 shaved about 4 percent from prices and took four years to work through. Today’s cycle has already produced a much larger 13 percent decline in just three years, suggesting that while the drop was more severe, the market may stabilize faster. Even so, most historical models suggest it could take four to six years before prices climb back to their May 2022 peak.

For investors, the “losses extend” phase of the cycle often signals opportunity. Rental demand in Austin remains strong, and as yields improve, the city’s property market becomes more attractive to long-term buyers. For families and first-time buyers, the continued decline offers a chance to enter at prices not seen since 2020 — though patience and negotiation remain key.

The takeaway is clear: Austin home prices are still sliding, but the freefall of 2023 has given way to a slower grind. The Austin real estate market is not collapsing, but it is correcting, and that correction has yet to run its course.

Frequently Asked Questions
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What is the current median home price in Austin?

The 2025 projection places Austin’s median sold price at $432,585. This is 1.8 percent lower than 2024’s median of $440,708 and more than 13 percent below the 2022 peak of $499,591.

How long has the Austin housing market been in decline?

The downturn began after the peak in 2022. Since then, Austin has posted three consecutive years of median price declines — 2023, 2024, and now 2025. This is the longest stretch of declines since the 2008 downturn.

Are sellers still getting above asking price in Austin?

No. In 2021, homes sold for nearly 105 percent of list price. By 2023, that number dropped to 97.2 percent, where it remains today. This shift shows buyers are negotiating below list, a reversal from the bidding wars of the pandemic era.

When will Austin home prices recover to their previous peak?

Based on historical cycles, it may take four to six years for Austin’s median home price to climb back to its May 2022 high. Recovery speed will depend on mortgage rates, job growth, and new construction activity.

What does this mean for buyers in 2025?

This is one of the most favorable buying environments in recent years. Buyers can negotiate discounts, face less competition, and purchase homes at prices more than 13 percent below the peak. For long-term buyers, this phase of extended losses represents opportunity.​