Will Austin real estate ever come back? If so, what rough timeline?

Question

I'm trying to logically, carefully map out my decision around whether or not to sell my rentals in Austin.

1. Austin is now the #1 market for real estate correction after being the steepest climb during COVID: https://www.reddit.com/r/Austin/comments/1bhrm8k/once_americ...

2. Companies are leaving Austin. Whatever math led them to move here, has now been reversed and my thinking is that they will have had high powered actuaries et al behind their decision to leave. <Whatever factors> led them to decide to leave, are going to be the same ones that prevent the appreciation or demand for my rentals in Austin, to stay at a healthy level.

https://www.mysanantonio.com/business/article/austin-loses-t...

https://finance.yahoo.com/news/meta-leaving-austin-office-gu...

3. Airlines are cutting routes and plans due to lack of demand in Austin: https://www.statesman.com/story/business/2024/09/17/american...

4. My rentals will thrive only with a return to the office. I believe WFH is a concept which was long overdue and whose time has come and I do accept my losses. Dell tried to enforce RTO pretty strongly but seems to have failed: https://finance.yahoo.com/news/nearly-half-dell-full-time-21...

Dell employees seem to have called their bluff and dug in their heels and won - they are - at least for now - WFH

There are other factors but above are the top 4. With this background, my questions are:

1. Will Austin real estate ever come back? Not to the highs that it had earlier reached in the bubble, but at least to the point that a new well-priced, high quality listing gets SOME interest (say 10 calls and 4 showings within a month) as opposed to being on the market for 80-100-120 days with no calls? If you think it will never come back, why not? If you think it will come back, why and when?

2. Do you think Austin real estate will come back when rates go down? Or has Austin lost it's charm and verve and energy to the point that even if rates come down, people are less likely to move to Austin or invest in this city?

3. If you are a *non-full priced* real estate agent in the Austin area and are interested in my business selling my multiple rentals in the next few days, please send me a message

Thank you

Aaron Gordy · Answer

The sky is not falling. I don't think that you should make a long term bet based upon a Reddit post, imo. The latest unemployment for the Austin metro is 3.5% according to Texas Workforce Commission. If one drives around the metro one sees a ton of construction for apartments and other forms of housing and retail just to meet the demand. The metro is growing out. A decade or so ago the metro was far smaller. Now it takes an hour easily to get from one side to the other. I will say that the times have changed to a more healthier market. Getting a hundred showings on one house is not the norm like it happened a few years ago. I don't think that its wise to bet against the market continuing its upward trajectory. I will say that if the goal is to beat the steadily normal appreciation then you should do something that forces appreciation with improvements.

Caleb Brown · Answer

I would not panic sell. Are the rentals performing? Do you need the money back for something else? Many areas across the country are seeing this thing. We saw rates dirt cheap and prices shot up. Then they raised rates an an insane rate for 1 year and the market is feeling it. It's only realistic it will take a few years to recover(unless the rates drop cheap again). In my area 2024 was a slow year, it was a little busier then 2023 but market is stagnant. I think 2025 will be similar to 2024, I do think it will pick up a little but nothing crazy. TX was the hot area to be. People are still moving there but it's not going to be near what you saw the past few years.

Ryan Kelly · Answer

@John Gonzalez from my perspective, the correction is mostly over. November saw a 2% year over year median home price increase and sales numbers are in line with last year. Most of the people “moving out” of Austin are moving out of the city limits to the suburbs. From 2020-2023, Georgetown has grown 43%, Leander 27%, and Liberty Hill 187%. Overall, home values are coming back in line with long-term appreciation trends and the correction was necessary after the massive spike during the pandemic. Tech has also been in a hiring freeze for nearly three years, so once they start hiring in numbers again, Austin will be one of the first to benefit.

Robby Sanchez · Answer

As far as the construction stuff. That's not just austin lol that seems to be a texas thing. Traffic does suck. And the tolls piss me off but the opportunity for business here is great. Infrastructure needs lots of work and yes the heat really sucks but i still think the pros out weigh the cons.

Robby Sanchez · Answer

Samsung production is delayed because they didn't get the deal with Qualcomm. But samsung isn't going anywhere and is only a small piece to the bigger picture. I used to live in California and the prices are bad here in austin but not nearly as bad as California. There are plenty of attractions in austin! And great food!

John Gonzalez · Answer

That's encouraging Jordan, thank you for the birds eye view

Robby Sanchez · Answer

I think that it only goes up from here. with elon musk moving to town and along with X and tesla and nueralink and the new samsung factory in taylor and dell, and apple as well as additional big companies like swinerton coming to austin. not to mention the the university population just hit an all time high. austin is coming back! I agree with jordan, I think there are alot of people just waiting on the fence until rates drop a little bit more and before you know it, things will be up and running again. Austin has the ability to turn around quick! if you ask me, right now is the best time to buy before the competition gets feirce again. As far as selling, I would definately hold if you can and let appreciation help you while you wait.

Jordan Moorhead · Answer

@John Gonzalez Austin real estate has already started a slow rebound from what we can see on the sales side. DOM is dropping and prices have started to turn a corner, but we really need interest rates to drop to accelerate that.We have sold quite a few this year and are already lining up listings for the new year. We saw a big pop last January mid month and I expect we'll see the same this coming year!

John Gonzalez · Answer

Thank you, I do hope all this plays out. I worry that Austin's prices have - even with the slowdown - gotten to the point that people are asking: "Why am I paying this much to live here? Traffic is a zoo. The summers are red hot. Austin's got California prices without the California weather, attractions and infrastructure".I've been paying close attention to the Austin area and I don't mean to be a downer but some of this news is not well known:Samsung not exactly setting Taylor Texas on fire:https://www.reuters.com/technology/samsung-delays-taking-del...Austin ranks as the 5th city with the highest number of people leaving:https://cbsaustin.com/news/local/austin-ranks-5th-among-us-c...Ghost unfinished communities: https://www.reddit.com/r/Austin/comments/1gvr5ex/ghost_neigh...

John Gonzalez · Answer

Great points Caleb, thank you so much. 1. In Austin, unless you bought with a large down payment around or earlier than 2014-2015, your rentals do not perform in the traditional sense and certainly do not obey the 1% rule. It is almost always an appreciation play. I was planning to be in for the long term, but Austin's huge crash has me on the ropes. So, no, my rentals are not performing.2. Yes, I do want the money back for other things.3. Thank you for the timeframe. I am not equipped to deal with this for all of 2025. So maybe I will try and sell the most painful one and not all of them?Thanks again