Austin's hot real estate market is still trying to balance itself out after a full year of cooling prices. But even after that, it's accounting for nearly $17.5 billion in economic activity in 2023, according to the latest report from the Austin Board of Realtors (ABoR).

The final report of 2023 wrapped up the Austin-Round Rock metro area's performance and compared it to 2022's statistics. The findings show the median prices in the Austin area decreased 10.2 percent year-over-year to $450,000.

As another good sign for what's ahead for homebuyers in the coming year, 2024 ABoR president Kent Redding said housing inventory in the Austin-Round Rock MSA has increased to the highest it's been in more than eight years.

"In 2023 the Austin-Round Rock MSA housing market continued its move towards a more sustainable pace," Redding said. "And while there was a drop in closed sales and median close price, these were both symptomatic of higher mortgage rates."

ABoR housing economist Clare Losey, Ph.D., corroborated Redding's statement, further adding that high mortgage rates are the toughest hurdle to overcome for first-time homebuyers in 2023. According to Losey, mortgage rates peaked in late October, causing constant price readjustments for both buyers and sellers.

"While we have seen some leveling off in home prices, the Central Texas region still lacks a sufficient inventory of affordable homes for sale, especially those homes priced below $300,000, which is keeping many would-be first-time homebuyers on the sidelines," she said.

Home sales were down almost all across the board in Central Texas in 2023, but it's not all bad news as Austin moves into 2024, according to ABoR.

Losey predicts home prices and sales will flatten out this year while the housing market battles for consistency and affordability. Compared to five years ago, Losey said there have been massive gains in total sales-to-dollar volume (30.5 percent), active listings (21.9 percent), and inventory (38.4 percent).

"Housing demand is still strong and the uptick in the inventory of homes for sale in 2023 has provided more options for repeat buyers,” she said.

Central Texas housing trends in 2023
In Travis County, there were 13.3 percent fewer residential homes sold overall in 2023 than in 2022, amounting to 13,664 homes. However, prices went down nearly 9 percent year-over-year to $523,800.

Williamson County saw a slightly smaller drop in residential home sales year-over-year in 2023, at 9.6 percent. The median price for those 10,414 homes was $430,000, which is a similar 10 percent drop when compared to 2022.

However, home sales in Hays County plateaued in 2023 at 4,423 homes, which was a mere 0.1 percent difference from 2022. Just like in Travis and Williamson counties, median prices dropped nearly 10 percent to $397,330.

1,421 residential homes were sold overall in Bastrop County, a 6.1 percent drop, with median prices slightly over $350,000.

The most affordable homes in Central Texas in 2023 were located in Caldwell County, ABoR's report shows. Median prices in the area dropped 10.5 percent from 2022 to just under $300,000. Unlike all other Central Texas counties, Caldwell saw nearly a 1 percent increase in residential home sales in 2023, totaling 516 homes.

Housing trends in December 2023
915 homes were sold last month in Travis County, with median prices keeping a steady drop of 2.4 percent year-over-year to $527,500. There were 3,581 active listings on the market; about 14.3 percent more than December 2022.

Over 870 homes were sold in Williamson County, with median prices falling to $425,000 in comparison to last December. There were 577 new home listings, with a total 2,156 active home listings.

Hays County saw a 5 percent drop in both home sales and median prices. 362 homes were sold in the area in December, with a median price of $401,500. Active listings dramatically rose by nearly 18 percent last month to 1,311 homes.

Home sales in Bastrop County fell 12.2 percent with 108 homes sold in December. Median prices stood at $364,450. There were less than 500 active listings on the market and 109 new home listings.

Homes in Caldwell County sold for a median price of $321,990. A total of 38 homes were sold, which was nearly 10 percent less than the previous year, and there were 172 active homes on the market. Caldwell County had 39 new homes on the market in December.