Most homes in the United States have experienced a decline in value over the past year, with Texas being particularly affected. According to Zillow, 53 percent of homes nationwide saw their values drop this year. In the Texas Triangle—comprising Dallas, Houston, Austin, and San Antonio—the average share of depreciated homes is more than 85 percent.
Austin stands out among major metropolitan areas for having the largest decrease in average home value since the last market peak. The city, which saw rapid growth during the pandemic due to its tech sector expansion, has faced a 20 percent drop in home values as measured by Zillow’s Zestimate tool.
Additionally, Austin, San Antonio, and Dallas are among the top five cities with the highest proportion of property listings priced below their previous sale price. While San Francisco leads with 14 percent of homes valued below their most recent sale price, Austin follows closely at 13 percent. In San Antonio and Dallas, 8 percent and 7 percent of homes respectively have lost value compared to their last sale.
Despite these declines, experts say that homeowners have generally retained much of the equity gained over recent years. “The vast majority of homeowners still have significant equity,” said Treh Manhertz, an analyst at Zillow. He described this year’s downturn as “a normalization, not a crash.”
However, those who invested in single-family homes during or after the pandemic boom may not be as well positioned. These investors represent a substantial portion of sellers in Texas today.
Texas led the nation in institutional investor purchases in 2021, particularly in areas like Tarrant and Rockwall Counties near Dallas-Fort Worth (DFW). In Austin specifically, investor-owned properties typically made up less than 20 percent of the market before the pandemic but surged to nearly one-third during that period.
The shift has changed dynamics for both professional landlords and so-called “accidental landlords”—homeowners renting out properties instead of selling them. Many Sun Belt cities saw increased rental listings as owners opted not to sell into a declining market; this contributed to falling rents in places like Dallas.
