Austin Housing Market Forecast for 2024 – 2025: The Downturn Continues

• The Austin-area housing market continues to experience a decline in home prices, and there doesn’t appear to be an end in sight.
• One recent forecast for the Austin-Round Rock metro area real estate scene predicted that prices would continue falling well into 2025.
• During the COVID era, this market experienced a surge in home-buying activity that caused house values to skyrocket like never before.
• Austin is now going through a “correction” phase that includes declining house values, slower sales, and a general reluctance among buyers.

“Will Home Prices in Austin Continue to Fall?”

That’s what a lot of Central Texas home buyers and homeowners are wondering right now. And some forecasts suggest that the “bottom” of the market might still be beyond the horizon, with room for additional price declines over the coming months.

The “science” behind real estate market predictions is hazy at best. Housing analysts and economists can offer what amounts to an educated guess, based on current conditions. But that’s about it.

Even so, home buyers in the Austin-Round Rock metro area might be wise to adopt a “wait and see” attitude for a bit longer. It’s rarely wise to purchase a home in a declining market.

Here are the latest stats, trends and predictions for the Greater Austin housing market, extending through 2024 and into early 2025.

From Boomtown to Bust: a Brief Look Back

The Austin-area real estate market has become increasingly popular over the past decade. For many years, the Central Texas area offered relatively affordable home prices, a strong economy, and plentiful jobs (especially within the tech sector).

Because of this, the Austin housing market appreciated steadily in the years leading up to the COVID pandemic.

Then the pandemic came along, shifting the real estate market into overdrive. Suddenly, anyone with an office-based job was able to work remotely, and from anywhere in the country. This led to a nationwide migration shift, with people flocking to relatively affordable markets like Austin.

Economists now refer to those cities and metro areas as “pandemic boomtowns.” Austin, Texas; Boise, Idaho; and Sacramento, California all fall into this category.

You probably know the rest of the story. The housing market went from boom to bust, with home prices hitting an all-time record high in the summer of 2022 and dropping like a rock thereafter.

This pattern played out in many cities across the U.S., amounting to a nationwide real estate cooldown. Housing markets like Austin just experienced a more extreme version that’s not done yet.

You can see the “boom” phase for Austin in the above chart, which shows home values going back eight years. You can also see the resulting downturn that continues to this day.

Austin Real Estate Market Trends in Early 2024

We used data from Zillow, Redfin, Realtor.com, and the Multiple Listing Service (MLS) to create a snapshot of current real estate market conditions in the Austin area. Here’s a look at what’s happening as of June 2024:

• More homes available: As of spring 2024, the Austin metro area had about a 4-month supply of homes for sale, which was higher than the national average of 2.5 months. Local home buyers should have plenty of options during the second half of 2024.
• Slower home sales: Overall, the Austin-Round Rock real estate market is moving at a slower pace these days. The median “time on market” for listings ranged from 40 to 50 days over the past couple of months, compared to the national median of 30 to 35 days.
• Less competitive: Over the past few months, only a small percentage of homes in the Austin area sold for more than the original list price. This marks a major shift from two years ago, when most homes were selling above the list price. The reason: there’s much less competition among buyers.

The “median days on market” metric, in particular, says a lot about the local real estate scene. When measured in this manner, Austin-Round Rock currently has one of the slowest housing markets in the country among the major metro areas.

A Negative Price Forecast Stretching Into 2025

Given the trends mentioned above, you might expect home prices in Austin to keep falling through this year and possibly into 2025. And you might be right on the money.

A recent forecast from Zillow predicted that home values in the Austin-Round Rock metro area would decline a bit further over the next 12 months or so.

Specifically, they expect the median home value to decline by around 3.8% from May 2024 to May 2025.

Housing market predictions are far from certain. So we shouldn’t get too wrapped up in the exact numbers being projected here. It’s not like Zillow’s economists have a crystal ball or second sight.

But they do expect to see additional price declines through the first part of 2025, and that’s something local home buyers need to know about.

A Great Market for Renters

If you’re moving to Austin but aren’t sure if you want to buy a home, you’ll be happy to know that it’s ranked as one of the best markets for renters.

Rental prices in the Greater Austin area have declined significantly over the past year or so. Additionally, renters in the area typically enjoy a lot of perks and amenities.

Let’s start with prices. According to the April 2024 Rental Report from Realtor.com, the Austin-Round Rock metro area experienced one of the biggest declines in monthly rents over the past year. That was based on an analysis that included the nation’s 50 largest metropolitan areas.

According to their rental market update:

“The median asking rent for Austin, Texas in April was $1,494, which is down $195 (-11.5%) from its September 2022 peak. That’s the largest percent savings, compared to the market’s peak, among the 50 biggest metro markets.”

One reason for this: an increase in multi-family homes that have converted some renters to homeowners.

In terms of monthly cost, renting beats buying a home in Austin — and by a wide margin. A person could rent a nice apartment in this market for a lot less than the average monthly mortgage payment costs.

And you can also get a lot for your money when renting a place. According to a June 2024 report from Forbes Advisor, the Central Texas city ranked high for amenities such as on-site parking, in-unit laundry, and air conditioning.

Austin Is Now the 10th Largest City in the U.S.

Population growth has a lot to do with the current trends and housing market forecasts for the Austin area. The entire Central Texas region has experienced tremendous population growth over the past three or four years, partly due to a pandemic-fueled migratory shift.

Last year, Austin officially joined Houston, San Antonio and Dallas as one of the 10 most populous metropolitan areas in America. This is based on data reported by the U.S. Census Bureau.

“These population estimates show the city of Austin gaining momentum in population growth and continuing to contribute to the rapid growth in the region,” explains City of Austin Demographer Lila Valencia.

The Census Bureau graphic above shows the 15 fastest-growing large cities in the United States. These figures pertain to the one-year period from July 2021 to July 2022. Three of the top five cities shown in this graphic (Georgetown, Kyle and Leander) are located within the greater Austin metropolitan area.

This is partly why 2024 – 2025 forecasts for the Austin real estate market predict a rebound for home prices in the coming months. House values in the area have fallen sharply over the past year. But population growth and other demand-related factors will soon bring that downturn to an end.

Austin-Round Rock-Georgetown Metro Area

Are you planning to move or relocate to the Austin metro area in the near future? If so, you’ll find the following metropolitan overview helpful:

The Austin-Round Rock-Georgetown Metropolitan Area, often simply called Greater Austin, is a thriving region located in Central Texas. Known for its tech innovation, live music scene, and natural beauty, this metro area has consistently claimed top spots in “best places to live” rankings.

Major Cities

• Austin: The state capital of Texas, Austin is the central hub of the metro area. It boasts a unique combination of creativity, technology, and outdoor lifestyle. Austin is home to the flagship campus of the University of Texas and an abundance of live music venues.
• Round Rock: Located north of Austin, Round Rock is known as the “Sports Capital of Texas” and offers a strong family-oriented atmosphere. In addition to its sporting focus, Round Rock is the headquarters of Dell Technologies, a major employer in the region.
• Georgetown: This charming city features a picturesque historic square and beautiful Victorian architecture. It’s home to Southwestern University, the oldest university in Texas, adding to its historic and cultural appeal.

Population

The Greater Austin area is home to over 2.3 million residents and is among the fastest-growing metro areas in the United States. This growth is driven by the region’s appealing lifestyle and booming economy, among other factors.

Geography

The Austin metro area sprawls across portions of five counties within the Texas Hill Country. This scenic region is dotted with rolling hills, natural springs, and the Colorado River winding through the landscape.

Economy

Greater Austin features a dynamic and diverse economy with these key sectors:

• Technology: Nicknamed “Silicon Hills,” Austin is a major center for high-tech industries with companies like Apple, Dell, Google, and Meta (Facebook) having large presences.
• Government: As the state capital, government is a significant employer in the region.
• Education: The University of Texas at Austin is a major research institution and economic driver.
• Healthcare: Austin has growing healthcare and biotech industries.
• Live Music: Known as the “Live Music Capital of the World,” Austin supports a lively music scene fueling tourism and creativity.

Other Things to Know When Relocating

• Culture and Attractions: Greater Austin offers countless ways to stay entertained – live music venues, outdoor festivals (ACL, SXSW), museums, food scenes, and an abundance of recreational areas.
• Outdoor Recreation: Zilker Park, Barton Creek Greenbelt, and numerous nearby lakes and rivers provide ample opportunities for hiking, swimming, kayaking, and more.
• Traffic: Traffic congestion can be a challenge, especially during peak commute times. Last year, the stretch of I-35 that passes through Austin was ranked as the fourth most congested roadway in Texas.
• Cost of Living: While lower than some major cities, housing market costs in Austin have increased significantly over the past decade (but have declined over the past three years).

Additional Resources

• Visit Austin: https://www.austintexas.org
• Round Rock Visitors Center: https://goroundrock.com
• Georgetown Visitors Center: https://visit.georgetown.org

Disclaimer: This report contains predictions and forecasts for the Austin, Texas metro area housing market extending into 2024. Such views are the equivalent of an educated guess and should be treated as such. The Home Buying Institute makes no claims about future real estate or economic conditions.