Just a few years ago, buying a house anywhere near Austin was out of reach for most ordinary Americans.
Now the Texas boomtown’s decline has been so dramatic that a 23-year-old recent college graduate has managed to buy a family home for less than the national median price.
Austin was the place to be for young professionals and families alike during COVID.
Americans flocked to a handful of Texas, Florida and Arizona hotspots for warm weather, lower taxes, and enough space to avoid lockdown cabin fever.
Now, it seems Austin’s newcomers have realized it isn’t the Southern metropolis paradise they thought it would be, and they’re packing up.
Unfortunately, this trend came after builders developed thousands of new units to account for the sudden demand that popped up during the pandemic.
With supply far outweighing demand, Austin has turned into a firm buyer’s market – giving house hunters more options, more negotiating power and more time to shop around.
One buyer who has benefited from the sorry state of Austin’s housing market is a 23-year-old recent college graduate originally from Nigeria, who bought a house for herself and her two brothers.
Austin was the place to be just a few years ago, but now it seems the Texan city is the place to avoid at all costs
Demand was high during the pandemic, so developers built more houses. Now, buyers are retreating while supply is mounting
The buyer managed to snap up a single-family home just 45 minutes outside of Austin for $392,000 – far below the national median sale price of $430,000.
She told Realtor.com that the home has three bedrooms, outdoor space and a small guest house, which was an important factor for her mother.
As the median age of first-time home buyers ticks up to 40, it’s very rare that someone fresh out of college is able to afford a house in a major city. This sale is a testament to the affordability offered in Austin, at the expense of the city’s housing market and the equity of homeowners.
Realtor.com’s January Housing Report found that Austin’s median list price currently sits at $455,000 for the entire metro area – a steep 8 percent drop from the same time last year.
Homes are also spending more time on the market, with the median days on market increasing by ten days.
Meanwhile, many people – including public figures such as conservative podcaster Joe Rogan and comedian and MMA fighter Brendan Schaub – are leaving Austin, and they’re not doing so quietly.
All of these factors have created the perfect storm for Austin’s housing market.
To call the market ‘unbalanced’ would be an understatement, Redfin’s chief economist, Daryl Fairweather, told the Daily Mail.
During the pandemic, Austin offered vast properties with small price tags in a place without income tax or strict COVID lockdowns
A recent college grad managed to snap up a single-family home just 45 minutes outside of Austin for $392,000 – far below the national median sale price of $430,000 (file image)
‘Austin is the most extreme example of a market that overheated during the pandemic and is now correcting,’ Fairweather said. ‘Builders added a lot of supply when demand was red-hot, and many homeowners who locked in low mortgage rates are now trying to sell into a slower market.’
Indeed, there are 10,000 more homes on sale than there are people looking to purchase in Austin, according to Redfin – making it the strongest buyer’s market in the country.
Aside from being the strongest buyer’s market, Austin has also seen the steepest drop in prices of all major US cities. Prices have plunged 7.3 percent over the past year to $462,000 – far more drastic than the 0.6 percent drop seen on a national level.
This is a far cry from the $655,000 average house price seen at the peak of Austin’s popularity back in 2022.