Austin Housing Market Forecast for 2024 – 2025: A Rebound Ahead?

How much further, and for how long, will Austin-area home prices fall?

That’s one of the biggest questions when it comes to the Austin, Texas real estate market. And some forecasts for 2024 – 2025 suggest that the “bottom” of the market might be on the near horizon.

But one thing is clear. Home prices across much of the Austin-Round Rock metro area continue to decline, as of February 2024. So buyers who are considering a purchase might be better off taking a wait-and-see approach for a little while longer.

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 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.

Austin Real Estate Market Trends in Early 2024

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

• The median home price for the Austin-Round Rock metro area declined by -7.3% over the past year, according to Zillow.
• The median sale price in the city of Austin declined by -3% over the past year, according to Redfin.
• Austin-area homes listed for sale at the start of 2024 were spending a median of 77 days on the market before going under the contract, according to Realtor.com.
• Last month, about 22% of homes for sale in the area had a price reduction.

The “median days on market” metric, in particular, says a lot about the current state of the Austin housing market in 2024. According to a February 2024 report from Realtor.com, Austin-Round Rock had the third-highest median DOM among the nation’s 50 largest metro areas.

To put it differently: the Austin area currently has one of the slowest real estate markets in the country, when measured by the typical time it takes to sell a house. Home buyers could capitalize on this later in 2024.

A Positive 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.

But at least one forecast for the Austin housing market sees a rebound on the horizon.

That prediction came from Zillow, in February of 2024. While the company has recorded a price decline over the past year, they also predicted that house values would rise over the next 12 months.

Here is Zillow’s latest prediction for the Austin-Round Rock metro area housing market:

From January 2024 to January 2025, home prices will rise by 3.3%.

Of course, this forecast represents an educated guess rather than a sure thing. So we shouldn’t get too wrapped up in these numbers. It’s not like Zillow’s economists have a crystal ball or second sight.

The point is, housing analysts expect the Austin real estate market to bottom out later this year, followed by a period of rising home prices.

Better Conditions for Home Buyers

In many ways, the latter part of 2024 could bring a golden opportunity for home buyers in the Austin area.

We’ve covered one of the reasons already. After declining for most of the past 18 months (see chart above), house values are expected to rebound this year and turn north. This gives Austin home buyers a chance to come in at the bottom of the market.

The “bottom” refers to the period in a real estate cycle when home prices have reached their lowest point after a period of decline. It’s like the trough of a wave before prices start rising again. According to some forecasts, the Austin housing market could be entering that trough.

Other factors benefiting Austin-area home buyers:

• Home are staying on the market for a long time, which makes sellers more motivated to cut a deal.
• Mortgage rates have dropped by more than one percent from the 20-year high we reached back in November.
• There are fewer buyers in the market right now, which means less competition for those who are.
• Housing market inventory has increased over the past year, giving buyers more options.

The way things are shaping up, the second half of 2024 could be a great time to buy a home in markets like Austin, Round Rock and Georgetown. Lower prices, a slower pace, and less competition could make the house-hunting process a lot easier.

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.