The Austin Market Is Stronger Than It Looks

The show might have seemed to be over in the Live Music Capital of the World, but there may be an encore.

Austin drew crowds in the early 2020s as any concerns over the pandemic were more than offset by cheap mortgages, the tech industry’s interest in the Lone Star state and remote workers trading tight coastal homes for roomier styles.

By the end of 2025, the bandwagon was long gone. Apartments built for the next wave of festivalgoers met with sparse demand, leading to vacancy rates almost double the national average of 8.6 percent and the greatest decline in average rent of any of the top 50 metros in the country in January. Redfin found this month that four out of five homes in Austin sold below their original listing price last year, the biggest share of any major metro in the state and one of the biggest in the country. Even the high end felt the chill: the prestigious Tarrytown neighborhood saw its home values decline year-over-year at a greater rate than any other ZIP code in Austin in 2025, with average sale prices dropping 11 percent from $1.7 million in 2024 to $1.5 million last year. One high-volume resi team, Trinity Texas Realty, resorted to hospitality to fill the gap of lower home sales.

But loyal Austin fans aren’t leaving the show just yet.

A closer look at the data reveals persistent demand for Austin apartments, centrally located homes and certain luxury neighborhoods. Austin absorbed 3,177 multifamily units in the fourth quarter of 2025, trailing only New York City, Dallas/Fort Worth, Phoenix and Atlanta nationwide, according to CoStar. Those units represent a hundredth of Austin’s entire multifamily inventory, putting Austin in second place nationally for the strongest absorption as a percentage of supply, trailing Charlotte.

Meanwhile, the multifamily pipeline has slowed dramatically. CoStar projects a 47 percent decline in unit deliveries this year.

On the single-family side, most of the depreciation in the area has taken place in exurbs like Round Rock, Kyle and Georgetown, one of the fastest-growing cities in the country three years ago. Sale prices in Austin city limits generally held flat.

Similarly, prices in certain luxury enclaves also changed little. The average home sale price wobbled by just one percent between 2024 and 2025 in Westlake, and it actually rose marginally in Downtown.

Of course, a vast portion of Austin luxury deals go unrecorded on the Multiple Listing Service, obscuring the full picture of top-tier resi trends. The city’s always been a hotspot for hidden gigs, after all.

Courtroom drama

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.

Downtown divestiture for Nate Paul?

Meanwhile, Paxton associate Nate Paul may soon give up two Downtown Austin properties. A court-appointed receiver is negotiating sales of the 0.9-acre warehouse lot at 99 Trinity Street and a three-parcel assemblage near the Austonian condo tower at 201 and 203 Colorado Street.

Trades and spades in the office sector

Deals were struck and shovels sunk in the office market recently. McKinley Homes bought Sam Houston Crossing I, a distressed building at 10343 Sam Houston Park Drive in Houston, in December. The Gutow Company purchased the 13-story property formerly known as the Atlas Energy Tower at 12001 North Central Expressway in Dallas and disclosed plans to rename it 12001 NCX. Nearby, Hall Group broke ground Friday on a $140 million office building in Hall Park, the company’s ongoing development just south of The Star in Frisco.