After a period of rapid growth in the early 2020s, Austin’s residential real estate market experienced a downturn by the end of 2025. Factors such as an influx of new apartments and waning demand led to vacancy rates that were nearly double the national average of 8.6 percent. In January, Austin recorded the steepest decline in average rent among the top 50 metropolitan areas in the United States. According to Redfin, four out of five homes sold in Austin last year went for less than their original listing price, which was the highest share among major Texas metros and one of the largest nationwide.
Luxury neighborhoods were not immune to these trends. Tarrytown saw its home values drop more than any other ZIP code in Austin during 2025, with average sale prices falling from $1.7 million in 2024 to $1.5 million last year—a decrease of 11 percent. Trinity Texas Realty responded to slower home sales by expanding into hospitality services.
Despite these challenges, some indicators suggest ongoing demand for housing in Austin. The city absorbed 3,177 multifamily units during the fourth quarter of 2025, ranking just behind New York City, Dallas/Fort Worth, Phoenix and Atlanta nationally, according to CoStar data. As a percentage of total supply, this absorption rate placed Austin second only to Charlotte among major U.S. cities.
The pipeline for new multifamily construction has also slowed significantly; CoStar projects that unit deliveries will decline by 47 percent this year.
Most declines in single-family home prices occurred outside city limits—in suburbs like Round Rock, Kyle and Georgetown—while prices within Austin generally remained stable.
Some luxury markets showed resilience as well: Westlake’s average sale price changed by only one percent between 2024 and 2025, while Downtown saw a slight increase. However, many high-end transactions are not reported on public listings platforms like the Multiple Listing Service.
In related news from elsewhere in Texas real estate:
– The developers behind Colony Ridge near Houston agreed to invest $48 million in infrastructure improvements and $20 million toward law enforcement support as part of a federal lawsuit settlement dating back to 2023.
– Allegations against Colony Ridge included deceptive advertising practices targeting Hispanic buyers and predatory mortgage terms.
– Texas Attorney General Ken Paxton had previously raised concerns about crime and immigration issues at Colony Ridge.
– Nate Paul may soon relinquish two properties in Downtown Austin following court proceedings involving a receiver managing sales negotiations.
– Recent activity in Texas’ office sector includes McKinley Homes acquiring Sam Houston Crossing I (a distressed property) in Houston; The Gutow Company purchasing and renaming Atlas Energy Tower at North Central Expressway in Dallas; and Hall Group breaking ground on a $140 million office building at Hall Park near Frisco’s The Star development.
“Colony Ridge — the Houston-area master-planned community that’s been taking lumps left and right, politically — received another blow this week.”
“Settling a federal lawsuit begun in 2023, the developers of Colony Ridge agreed to invest $48 million in infrastructure improvements and $20 million in law enforcement support.”
“The Biden administration alleged in the original suit that Colony Ridge targeted Hispanic buyers with deceptive advertising and predatory mortgages. Republican leaders floated suspicions that Colony Ridge was facilitating cartel crime and ‘allowing illegal aliens to run rampant on its streets,’ according to Texas Attorney General Ken Paxton.”
