AUSTIN, Texas — After a red-hot Austin housing market, a new report from Zillow shows us just how quickly it's cooling off. The average home value in the Austin area is down 12% since the record highs we saw in June.
But for some, taxable property values are still rising, and thousands of Central Texans are now looking at whether to protest their appraisals.
Houses flying off the market, selling for hundreds of thousands over asking – Austin was a seller's dream during the pandemic.
"Buyers in pandemic-era hotspots like in Austin and Phoenix are seeing their markets return faster to normal," said Orphe Divounguy, a senior economist with Zillow.
Divounguy said with the surge in demand Austin saw during the pandemic, unaffordability was through the roof. But as things cool off, Austin is in a good spot.
"The good news for buyers there is they'll face less competition, but also they have more inventory, more homes to choose from when compared to markets on the other side of the country that are faced with massive housing shortages," Divounguy said.
Melanie and Caleb Sexton built their home in Round Rock in 2018.
"We wanted to buy a house. And of all the places to really move, Austin was a great location to relocate," Caleb Sexton said.
Back when they built their home, it was worth about $280,000. Fast-forward four years later and their home was just appraised at $407,649.
Their neighborhood in Round Rock is a good mix of newish builds but with some styles that differ, making each unique.
The Sextons say they've seen their appraisals higher this year when they know homes similar to theirs in the neighborhood are going for tens of thousands less than the values they're getting. So now, the couple is thinking about protesting their appraisal.
"I think it's something to consider because it's not reflective of what's going on in the real estate market. And again, we don't want to see our taxes go up," Melanie Sexton said.
Divounguy said higher values mean property owners are sitting on record home equity, and the Austin area is seeing an increase in inventory.
Zillow reports Austin had more than 10,000 units available last month, compared to last year when only 7,700 units were available.
"Long gone are the days where you could just put a sign in front of the front yard and expect a bidding war to set the price for you. It's not going to happen. So working with an agent is going to be very helpful," Divounguy said.
Even though the market is slowing down, Divounguy said local buyers and sellers are in a sweet spot compared to the rest of the nation.
Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.