Greater Austin Residential Real Estate - June 2025 Market Update

There are signs that the Austin market is stabilizing

The good news - There are signs the Austin market may be stabilizing. But remember—real estate is hyper-local.
Even neighboring streets can perform differently. This report offers a broad overview of what’s happening across the Greater Austin region. If you’d like a more specific update on your neighborhood, give me a call. I’d be happy to talk.

What happened from 2020 to 2022

As many of you know, the Greater Austin real estate market saw an unprecedented boom from 2020 to mid-2022. Fueled largely by pandemic-related shifts, home prices surged 50% to 70%. It was an ideal time for sellers—but a real challenge for buyers. Nearly every home received multiple offers, and bidding wars were common.

Market peaked in May-June 2022

By June 2022, the momentum began to slow. By late July, it was clear that prices had peaked and would begin to correct.    In January 2023, The Real Deal, a national real estate news site, reported that Reventure Consulting CEO Nicholas Gerli called Austin “arguably the largest housing bubble in America based on fundamental data.” Gerli predicted a 30–40% decline in home prices over a three-year period. We’re now two and a half years into that timeline. While prices haven’t dropped that dramatically, we have seen an average and median decline of 15–18%.

Since then, Austin has continued to attract national attention—most recently in The New York Times, which reported:

“Even Austin is stuck, despite starting construction on 102,000 single-family homes between 2020 and 2024,” according to data from Zonda. “The median sale price has fallen 18% since the peak in April 2022,” as reported by Unlock MLS.

Why prices declined

The sharp increase in prices during the pandemic was unsustainable. We’re now experiencing a multi-year correction, driven largely by two key factors:

• Incomes haven’t kept up with rising home prices.

• Higher interest rates have sidelined many buyers.

While there are other anecdotal explanations, most economists agree that affordability—measured by the relationship between prices, interest rates, and wages—is the central issue.

The Austin Board of Realtors’ economists believe that for the market to fully recover, prices must drop to levels that bring buyers back despite higher borrowing costs.

So, the big question is: Have prices come down far enough to re-ignite demand?

Signs of Stabilization

I believe the answer may be yes—at least in some parts of our region.  The following charts illustrate that prices have dropped significantly across the Greater Austin area, and that some closer in regions may be showing some modest price increases. Some specific neighborhoods are seeing price increases, but it is very location dependent.

Travis, Williamson & Hayes Counties -
Single Family Home Sales

Sales Prices rose approximately 50% from 2020 to 2022

• Since the peak, they’ve declined about 15%

• 2024 prices were ~2% lower than 2023

• Year-to-date (Jan–May 2025) prices are slightly lower (<1%) than 2024

This slowing rate of decline is one reason to believe the market is stabilizing.

$/Sqft chart also supports the stabilization narrative as well.

• Price per square foot also rose ~50% from 2020–2022

• Then declined ~15% from the 2022 peak
  
  

According to Altos Research:

• Days on market have remained steady over the past three years

• Austin homes are selling 30% faster than homes in other U.S. markets
  
  

Travis County - Single Family Home Sales

In Travis County, prices have stopped declining since 2023

Austin - Single Family Home Sales

• Austin Sales Prices rose approximately 50% from 2020 to 2022

• Since the peak, they’ve declined about 15%

• 2024 saw a slight increase (<1%) over 2023

• In 2025, prices are up 1% from 2024
  
  

According to Altos Research:

• Days on market have remained steady over the past three years

• Austin homes are selling 30% faster than homes in other U.S. markets

Despite the dip, 2025 prices are still well above 2020 levels—a key data point that underscores the long-term resilience of the Austin/Round Rock market.

National Trends Reflect a Brighter Outlook

There are encouraging national indicators, too:

• Mortgage applications are up 20% year-over-year

• Homes under contract have increased from this time last year

Both are leading indicators of market activity.

Lawrence Yun, Chief Economist at the National Association of Realtors, predicts a modest recovery in 2025, noting that:

“The worst of the affordability challenges are likely behind us, with stable mortgage rates, more inventory, and job growth helping buyers re-enter the market.”

My Take

I’m seeing early signs of a stabilizing, more balanced market, especially in neighborhoods closer to downtown Austin. As more buyers return, I anticipate that we will see price increases particularly in some neighborhoods.

The Takeaway

• Inventory remains low. If you’re selling, strategy is everything. Homes that are well-positioned still sell quickly—sometimes with multiple offers.

• If you’re staying put, hang in there. This is my third Austin downturn, and the recoveries are always strong.

• If you’re buying or investing, now could be a smart time to act. Sellers are motivated, and lending tools are more flexible than they’ve been since 2007.

We never know when the market hits bottom until it's already turning—but when it does, it often moves quickly.

(All data is sourced from the Austin Board of Realtors and includes January–May 2025 sales figures.)

If you'd like a personalized update for your neighborhood or are thinking about buying or selling, I’d love to help.