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Mansion Global writes, "Once the poster child for the pandemic housing boom, Austin, Texas, is seeing some of the nation’s steepest price declines for luxury homes, coupled with a growing supply of listings.

Luxury house hunters are now facing less competition and far more choice than even a year ago, marking an opportunity to buy before demand overwhelms supply again. There were 20% more luxury listings on the market in the greater metro area in the first quarter than a year ago, according to data from, which defines luxury as the top 10% of the market by listing price. 

“I have not seen this much great inventory in Austin in a long time, even since before the pandemic,” said luxury real estate agent Kumara Wilcoxon of Kuper Sotheby’s International Realty in Austin.

Wilcoxon said the available supply has given buyers more breathing room when it comes to finding a home at their desired price point. 

“They’re not just jumping at anything they can get at whatever price,” Wilcoxon said. “The good news for buyers is that there are options. There’s an opportunity to get a fair price, even a deal.”

Austin was one of just eight metro areas in the U.S. where the median price of luxury homes fell in the first quarter, according to data from Redfin. Year over year, prices dropped 6.9% to $1.6 million—the second-steepest decline in the country. Redfin defines luxury as the top 5% of the market based on value. By that measure, the city recorded the sharpest increase in active luxury listings in the first quarter of any major U.S. metro.

But don’t be fooled: The price and inventory shifts aren’t because people don’t want to live in Austin, said Daryl Fairweather, chief economist at Redfin. Luxury home sales rose 25.5% in the first quarter, the second-highest year-over-year increase in the nation, suggesting that buyer interest is still strong.

Rather, the trends are the product of a wave of residential construction that started during the pandemic in response to the city’s skyrocketing popularity among buyers at the time, she said.

“Austin is kind of unique among cities and how quickly it changed with the increase in demand coming from all over the country. There are soaring towers and cranes all over,” Fairweather said.

In 2021, interest rates were low, demand was high, and builders who wanted to cash in on the trend started constructing residential properties that are still being finished today.

“I visited Austin in 2022, and I was really struck by how many buildings were being boarded up to be converted into higher-end homes,” Fairweather said.

Having more newly minted properties on the market also puts pricing pressure on older homes. “Sellers can’t get away with charging high prices because they have to compete with new construction,” Fairweather said.

Luxury Activity Is Slowly Picking Up

Bridget Ramey, real estate adviser with Kuper Sotheby’s International Realty, said she’s suddenly seeing movement on high-end properties she listed well over a year ago. 

She recently closed a sale on a $7 million home that had been listed for two years. And in the course of one week, she completed the sale of two other luxury homes that had been on the market for over a year.  

“Buyers are back with a vengeance,” she said.

With more properties to choose from, buyers are much more discerning and have little patience for pie-in-the-sky home prices, Ramey said. “If the listings are not appropriately priced, buyers don’t even want to play ball.”

The city’s luxury home prices have corrected since they peaked in late 2021 and early 2022. “Those numbers were not real, and they couldn’t sustain themselves,” she said.

Even as home prices come down, though, inventory growth has broadened the ultra-luxury segment with more properties exceeding $10 million than there were before the pandemic, Ramey said. “The luxury price point has gained new heights,” she said. “We have a massive amount of inventory in the $7 million to $15 million range.”

Wilcoxon said it’s important to recognize that the market data trends in Texas don’t always tell the full story because there are no state laws requiring homeowners to disclose information regarding the purchase price of their property.

That’s even more true for the luxury market, in which buyers and sellers prefer to keep transactions private. Wilcoxon said over 80% of her listings do not appear in the public record.

What is clear, Wilcoxon added, is that the market appears to be correcting itself. “I consider it to be more like normalizing because we hit such a level of appreciation during the pandemic,” she said. 

New Builds Drive Affordability

One outcome of Austin’s pandemic-driven building boom is that it has increased the availability of entry-level luxury properties in certain areas.

Brokers say a prime example of this trend is the 78704 ZIP code, which is just south of downtown and includes highly sought-after, walkable neighborhoods like Barton Hills, Bouldin Creek, Travis Heights and Zilker. 

Along with retail, restaurants and other urban amenities, the area is full of older, historic homes that are being converted into high-end properties, with many in the $1.5 million ballpark, according to Brian Talley, broker and owner of Regent Property Group in Austin. “There’s a lot of character in those areas. You get to enjoy downtown life without being downtown,” he said.

Meanwhile, Ramey said she recently counted over three dozen available homes in 78704 that were in the $2 million to $3 million range. “If you’re in that price point, you have a lot of inventory. And sellers are pricing accordingly,” she said. “It’s very easy to identify if something is overpriced.”

On the northern side of downtown, Northwest Hills offers an ample supply of more affordable luxury homes, along with top-ranked schools, Talley said. 

He also points to northwest Austin and communities such as Steiner Ranch and River Ranch for more moderately luxury pricing. “It’s hilly, beautiful, and has quick access points to Lake Austin and Lake Travis.

Wilcoxon said there are similarly priced opportunities across metro Austin, especially further outside of town in the Hill Country and areas like Bee Cave, Barton Creek, Dripping Springs, Lake Travis, Spicewood and Wimberley. 

“You see lower prices in these areas,” she said. “The schools are great, there’s a lot of privacy and it’s convenient enough to town.”

Despite uncertainties like interest rate fluctuations and the November presidential election, Ramey said it’s likely summer will bring more transactions as families look to get into homes before school starts. 

“I think a lot of people are just making sure the bottom has hit,” Ramey said. “As long as transactions keep occurring and there’s inventory, I think we’ve found our ground.”

For now, the fact that there are more choices bodes well for buyers who are ready to act, Ramey said. 

“Find something you love, check the boxes, and go ahead and make a move,” she said."

Source: Mansion Global 

Written by: Autumn Cafiero Giusti

Published: May 31, 2024

Posted by Grossman & Jones Group on


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