A multi-million dollar home in Austin, Texas, is now listed at more than half of its previous asking price, according to a listing on Realtor.com.
Located on Lake Austin, the 4,236-square-foot condo's list price dropped $2.4 million in January.
Why It Matters
Overall home prices in Austin have decreased in recent months, with the median home listing price down 7.1 percent year-over-year, per Realtor.com. As of December, the median price sat at $585,000.
Austin's real estate market, fueled by a tech boom and population growth, saw property values skyrocket in recent years. However, with the Federal Reserve's interest rate hikes aimed at curbing inflation, mortgage costs have escalated, dampening demand in the mid-market.
What To Know
Located at 4408 Long Champ Drive within the Austin Country Club on Lake Austin, the three-bedroom, three-and-a-half-bath home had a 53 percent price decrease in January. The home was listed for sale in July 2024 at $4.9 million, dropping just under 58 percent in price since then.
Other luxury homes in the area have seen similar decreases—a nearby home recently dropped by $1.75 million and is currently listed at $9.25 million, while another dropped $200,000, now listed at just under $2.5 million, according to a Newsweek analysis of listings.
Austin's housing market boomed during the pandemic, but Levi Rodgers, a real estate broker and the founder of VA Loan Network, told GoBankingRates that prices are starting to "stabilize."
Despite recent reductions in luxury home prices in Austin, Marco Santarelli, founder and CEO of Norada Real Estate Investments, says Texas' luxury market as a whole has been performing well.
"The luxury housing market is experiencing notable growth, particularly in properties priced at $1 million and above. Texas recorded the sale of 12,888 homes priced at $1 million or more, marking a 10 percent increase from the previous year," Santarelli said.
Santarelli recently released housing market predictions for Texas, forecasting a "moderate slowdown" over the next two years. Nevertheless, Santarelli told Newsweek that Texas' luxury market is expected to continue growing.
"... Luxury home prices [are] anticipated to increase faster than their non-luxury counterparts for the first time in years."
What People Are Saying
Marco Santarelli, founder and CEO of Norada Real Estate Investments, told Newsweek: "The key challenges for investors this year will be rising mortgage rates leading to affordability concerns, possible inventory shortages, and construction costs and labor shortages. Economic volatility can also impact the Texas markets. It has a strong economy, but sectors like energy remain sensitive to global fluctuations."
Nick Gerli, CEO of real estate data platform Reventure App, told Newsweek in November: "Austin's downturn is probably in the 6th or 7th inning... Values are down almost 20 percent from peak, and inventory has spiked to [the] highest level in nearly a decade. I suspect there will be a modest correction over the next year, with the market bottoming in late 2025."
Matthew Walsh, an economist at Moody's Analytics, previously told Newsweek about U.S. housing prices as a whole: "For the year ahead, we expect continued slowing in house prices...To put some numbers to it, by the end of 2025, we expect somewhere between 1 to 1.5 percent-year over-year price appreciation."
What Happens Next
Looking ahead, housing prices are forecasted to fall in 31 cities throughout the state in 2025, including Austin. This downturn may provide opportunities for buyers who were previously priced out of the market while challenging sellers to adapt to more competitive pricing strategies.
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