Austin, Texas, which symbolized the pandemic housing boom, is now leading a national property cool-down. The city, which attracted remote workers with six-figure tech salaries and companies like Tesla and Oracle, saw its economy grow at nearly double the national rate, becoming the country's 10th-largest city. However, home prices and apartment rents have fallen more than anywhere else in the United States, marking a sharp reversal from previous years.
This decline is attributed to a period of overbuilding and a slowdown in both job and population growth. The significant influx of well-paid tech workers relocating to Austin had previously fueled the rapid appreciation in the city's housing market.
While the broader Austin market has seen a downturn, the luxury segment, particularly homes priced at $1.5 million and above, and the $2 million+ tier, has shown resilience. Million-dollar-plus transactions have grown at double-digit annual rates over the past three years. Pricing for prime Austin trophy properties ranges from $1,200 to $2,800 per square foot, with top-tier inventory in areas like Westlake and Tarrytown pushing higher. This suggests a divergence, with the luxury segment absorbing market changes differently than the overall housing market, which is down 8% from its 2022 peak price per square foot.
The strongest growth in million-dollar homes in Texas is concentrated in the Austin Real Estate Market and its prime neighborhoods including Tarrytown, Westlake, Rollingwood, and West Lake Hills. The buyer demographic for these luxury properties is largely concentrated in tech-sector wealth from California, with an increasing cross-border presence from Asia and specific European clients. In 2025, homes sold at $1 million or above in Austin generated $4.6 billion, comprising over 2,700 transactions at an average of $512 per square foot.
