Austin Housing Sees Price Corrections in Post-Pandemic Market

By Katie Borchetta · June 4, 2024

After years of Austin’s housing market experiencing a massive influx, it is now seeing immense pricing corrections in recent months.

The boom in real estate stemmed from a flood of workers, who transitioned to remote working because of the pandemic which gave them the ability to travel to destinations like Austin. Because of the high demand, Austin home prices spiked. However, with the pandemic well in the rearview, the boom seems to be cooling off as mortgage rates increase, new construction levels out supply with demand and people begin to leave the highly populated area. 

During the COVID-19 pandemic prices for the average Austin home increased by $170,000; however, the price per square foot has gone down 9.5% from two years ago. As of April of 2024, the median price of a home in the city was $557,000. 

The market reached its pinnacle in 2022 when the US Census Bureau confirmed the Austin metro population added roughly 140,000 residents between the years 2020-22 and the rapid growth directly affected the market’s inventory. With the low inventory and high demand it was almost a guarantee that you would be paying over the asking price.

The market currently sits at 3.8 months of inventory. The Austin area needs roughly four or five months to feel balanced while the national balance average is five to six. In fact, as of April 2024, housing inventory transcended pre-pandemic levels by 30%.

With migration to the area slowing down, Travis County, according to census data, is one county that is actually experiencing negative net migration from 2022 and 2023. 

This trend of lower listing prices seems to carry right outside the Austin metropolitan area. In Round Rock the average price fell from $497,000 in 2022 to $399,000 in early 2024. While that is a massive decrease, the current average is still roughly $140,000 higher than it was before the pandemic. Across the U.S. as a whole, the price reduction in the market increased from 12.3% in 2023 to 15.5% last month.

In the previous month the average time for a home to stay on the market was 47 days and in Austin specifically, real estate professionals are seeing homes stay up for longer if they are not priced correctly.