Austin Housing Market Update: Prices Fall 20% from Peak Despite Record List Values

Austin Housing Market Update: Peak Values, Price Drops, and Seller-Buyer Disconnect

The Austin real estate market is sending mixed signals. On one hand, the City of Austin’s average list price has just reached a record high of $961,210 in September 2025. On the other hand, the median sold price per square foot is down 27.2% from its April 2022 peak, showing buyers are negotiating significantly lower values. This widening gap between list and sold performance highlights the market’s shifting dynamics and the ongoing tension between seller expectations and buyer realities.

Market Overview

The Austin housing market has experienced dramatic changes since the 2022 peak. Across the broader Austin-Area MLS, most categories—list prices, sold prices, and price per square foot—hit their highs in the spring of 2022 or early 2023. Since then, values have retreated sharply. In the Austin-Area MLS, the median sold price peaked at $538,000 in May 2022 and now sits at $424,000, a drop of 21.2 percent. The average sold price per square foot has fallen 21.9 percent since April 2022. Within the City of Austin, the median sold price has dropped from $680,000 in May 2022 to $550,000, a decline of 19.1 percent. The median sold price per square foot is down the steepest, falling from $393 to $213, a 27.2 percent loss. The takeaway is clear: while sellers are pushing prices higher on paper, closed transactions show the market still faces deep buyer-side price resistance.

Housing Prices

The contrast between list and sold performance is stark. The City of Austin’s average list price just hit an all-time high, but median values tell a different story. Median list price has declined 6.6 percent since May 2022, while median sold prices are down nearly 20 percent. This divergence suggests the high end of the market is lifting averages while the middle tier is absorbing most of the downward price pressure. Sellers of luxury properties are inflating list-side statistics, while buyers across the broader market continue to secure steep discounts. From a long-term view, this is the most significant price reset since before the pandemic surge. Current values are now aligned with the 25-year compound appreciation curve, but remain well below the May 2022 peak, delaying any quick recovery narrative.

Regional Trends

The Austin-Area MLS data indicates that the correction is not isolated to the urban core. Both city and suburban markets have posted double-digit declines from peak values. MLS-wide declines are in the range of 12 to 24 percent, depending on the measure. City-specific declines fall between 6 and 27 percent, with the steepest drops concentrated in price per square foot. This suggests suburban sellers are adjusting more aggressively, while urban sellers continue to test the upper limits with record-setting list prices. Buyers, however, are consistently negotiating down at closing.

List-to-Sale Price Performance

The performance gap between list and sold values is perhaps the most telling sign of current market friction. In the City of Austin, the difference between record-high average list price and double-digit declines in sold price per foot reveals buyers are unwilling to match seller expectations. At the MLS level, the drop in median sold price versus list prices emphasizes the same point. Median sold values are down 21.2 percent, compared to a 14.8 percent drop in median list prices. This disconnect reflects a standoff: sellers are still pricing aspirationally, but buyers are winning concessions when contracts close.

Peak Value Trends

The market’s trajectory since the 2022 peak underscores how quickly conditions can reverse. At the height of demand, list and sold values were aligned, with buyers paying premiums per square foot. Today, the spread between peak and current values is stark. In the Austin-Area MLS, the median sold price per foot has fallen from $280 to $213, down 23.9 percent. In the City of Austin, the median sold price per foot has collapsed from $393 to $213, down 27.2 percent. These figures confirm that price efficiency has been reset. Even as average list prices push higher, affordability ceilings are firmly in place.

Implications for Buyers, Sellers, and Investors

For buyers, the data signals leverage. Discounts from peak values remain steep, particularly on a per-square-foot basis, allowing buyers to secure more value than at any point since 2020. For sellers, the message is more sobering. List-side optimism is colliding with a transactional reality of lower sold prices, meaning overpriced listings risk extended days on market and eventual price cuts. For investors, the correction restores rationality. Cap rates are beginning to normalize as prices retreat, although rental market stability will determine whether investment activity accelerates.​