After a recent boom in construction and a following explosion in inventory, Austin, Texas, is now the strongest buyer’s market in the entire country, according to a new report by Redfin.
Nationwide, there are now 37 percent more sellers than buyers—a near-record gap. But in Austin, there were an estimated 130 percent more sellers than buyers in September, Redfin found—the biggest imbalance in America—up from 81 percent a year earlier.
“Now that there are more homes for sale than buyers in the market, buyers have the upperhand,” Daryl Fairweather, Redfin chief economist, told Newsweek. “They’re negotiating on price, securing concessions and seeing real gains in affordability.”
How Austin Went From Boom To Bust
The Texas capital is one of the few markets in the country where home prices are now below their pandemic peaks, after the city experienced a steep correction starting from the fall of 2022. According to Redfin data, the median sale price of a home in the city was $508,000 in September, down 9.29 percent year-over-year and much below the pandemic peak of $665,000 reached in May 2022.
This is a massive change from the rapid price increases that Austin reported between 2020 and 2022, when demand surged in response to the rise of remote work and domestic migration to the vibrant Southern city.
“Austin was the poster child for pandemic boomtowns, with home prices soaring nearly 60 percent in just two years,” Fairweather said. “Builders saw that strong demand and rushed in to build both multifamily and single family homes.”
“In the first years of the pandemic, sellers had their pick of offers,” Fairweather said. “But when mortgage rates spiked in 2023, demand cooled and prices fell—just as a wave of new construction hit the market.”
In September, according to data from the Federal Reserve of St. Louis, there were over 11,000 homes for sale in the Austin market—up from the lows of 3,000-1,000 between 2021 and 2022.
This rise in inventory is due in part to the construction boom that followed the pandemic surge in demand, and in part to the fact that buyers have withdrawn from the market in response to higher prices and borrowing costs—a phenomenon that has been reported all across the country this year.
But while in other parts of the country—especially the Northeast—a chronic shortage of homes has propped prices up, in Austin new construction projects have prevented this from happening, and prices have been falling.
Austin is “a strong example of how a city can prevent home prices from becoming excessively unaffordable by saying yes to more housing instead of stopping new supply from getting built,” Fairweather said.
What Comes Next for the Texas Capital
Fairweather told Newsweek that she expects prices in Austin to remain soft for a while. “But with new construction slowing,” she said, “the pendulum of power could swing back to sellers.”