Austin-Area Home Prices Drop by 22%: What It Means for Buyers and Sellers

The real estate market in the Austin area has experienced a significant shift since its peak, with notable declines in both list and sold prices across various metrics. This analysis, based on data from the Austin-Area MLS and the City of Austin, provides a detailed breakdown of how home prices have changed since reaching their highest points. For buyers, sellers, and real estate professionals, understanding these trends is essential to navigate the current market conditions effectively.

As of September 2024, the average list price in the Austin-Area MLS has decreased by 6.3% from its peak value in April 2024. At that time, the average list price was $709,318, but it has since fallen to $664,347. Similarly, the median list price in this region peaked earlier, in May 2022, at $539,900. It now stands at $465,041, marking a more substantial drop of 13.9%. This decline in listing prices reflects the broader market's correction and signals opportunities for buyers seeking to enter the market at more competitive prices.

The sold prices in the Austin-Area MLS show even more dramatic declines. The average sold price peaked in May 2022 at $664,515. Today, that figure has dropped by 18.6%, settling at $541,059. The median sold price has seen an even sharper decline, falling from a peak of $538,000 in May 2022 to $420,000 today, representing a 21.9% decrease. Additionally, the average price per square foot for sold homes in the Austin-Area MLS has dropped by 22.5%, from $324 to $251. The median price per square foot has also seen a 22.5% decline, falling from $280 to $217. These reductions underscore the changing dynamics of the market and suggest that sellers may need to adjust their expectations regarding home values.

Turning to the City of Austin specifically, we see somewhat smaller declines in list prices, but significant reductions in sold prices. The average list price in the City of Austin peaked at $948,096 in April 2024. While this figure remains relatively high, it has dropped by 2.5% to $924,711. The median list price, which reached $658,589 in May 2022, now sits at $625,000, reflecting a 5.1% decrease.

Sold prices in the City of Austin have fallen even more sharply. The average sold price, which peaked at $847,583 in May 2022, has dropped by 14.8% to $722,561. The median sold price has fallen from $680,000 to $570,000, a decrease of 16.2%. When considering price per square foot, the declines are more pronounced. The average price per square foot has decreased by 21.7%, from $442 at its peak to $346. Similarly, the median price per square foot has dropped by 21.9%, falling from $393 to $307.

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These declines are significant and offer valuable insights into the state of the Austin real estate market. For buyers, this may represent a favorable time to enter the market, with prices being lower than their peak. Sellers, on the other hand, may need to adjust their strategies, pricing their homes more competitively to attract buyers in a market that has shifted away from its peak values. Regardless of whether you're buying or selling, staying informed about the latest trends in the Austin real estate market is crucial for making smart decisions.

With home prices in the Austin area and the City of Austin seeing drops of up to 22.5% from their peak, the data suggests that the market is undergoing a significant correction. While the average and median list prices show more modest declines, particularly in the City of Austin, the sold price data indicates that buyers are paying considerably less than they were at the market’s peak. For real estate professionals, this information is invaluable when advising clients on how to navigate the current market conditions​