Over the past year, home prices in Austin have been on a rollercoaster ride. Redfin’s data reveals that prices have been inching up since March. However, they are still well below the peak seen in 2022. The market now favors buyers, with developers in Austin even leaving some projects unfinished.
In April, the median home price in Austin was $567,000, showing a slight 0.4 percent increase from the previous year but a significant 16 percent drop from the peak of $667,000 in May 2022. Austin, once a sizzling market and among the most overvalued in the U.S., took a massive hit post-pandemic, experiencing the most significant decline compared to other metropolitan areas nationwide.
According to ResiClub’s data, the Zillow Home Value Index reported an 18.7% drop in home prices in Austin since their peak in May 2022.
Other cities like New Orleans, Louisiana, Lake Charles, Louisiana, and Boise, Idaho, have also seen home prices fall by more than 10 percent from their peak.
After a surge in prices during the pandemic, there has been a slight correction in the U.S. housing market between summer 2022 and spring 2023. This has largely been driven by challenges in property purchasing due to rising mortgage rates.
Austin’s correction has been more pronounced compared to other cities because of the significant exodus of remote workers from coastal areas post-pandemic. This, alongside an upsurge in new construction, boosted Austin’s housing stock.
Despite these challenges, Austin is gradually seeing price increases due to a scarcity of supply on a national scale.
An example of the shifting landscape is Oracle Corp., a major software company that recently announced its move from Austin to Nashville, Tennessee, Austin’s rival city. Interestingly, Oracle only established its presence in Austin in 2020.
The increased demand from newcomers is meeting head-on with Austin’s bureaucratic hurdles. Permit approval processes can stretch over years, causing delays in project completion and exacerbating challenges for developers.
In a video, Knight mentioned that over 57 percent (around 58 million units) of housing inventory in Austin currently sits vacant.