2022 in Stories

Austin's hottest real estate stories of 2022: Dramatic market shift and big developments

As we head into 2023, Austin is still one of the hottest markets in the U.S.

Photo by Carlos Alfonso on Unsplash

Editor's note: As 2022 comes to a close, we're looking back at the stories that defined Austin this year, starting with the red-hot topic of real estate. Following unprecedented growth during the pandemic, Austin's market is poised for a dramatic swing, but that's not all that happened this year. From massive mansions to tall towers and the first "residential winery" in the state, here are the hottest real estate headlines of 2022.

1. $45 million Lake Travis mansion makes a splash as most expensive home for sale in Texas. A Lake Travis estate fit for a celebrity hit the market at $45 million this spring. The property came with big-as-Texas bragging rights, as it was the priciest home on the market in Texas at the time. In 2013, the estate was listed for sale at just $15 million.

2. Posh Tarrytown estate hits the Austin market at $18.75 million. A newly remodeled, private estate in the coveted Tarrytown neighborhood hit the market at $18.75 million this fall. Originally built in the 1960s, the estate sits on just over an acre of land and boasts a reimagined 21st-Century interior while remaining true to Austin’s classic, rare brick exterior.

3. Austin housing market to see most dramatic shift in 2023, forecast shows. A summer forecast envisioned a massive shift in Austin’s homebuying market next year. By July 2023, the Austin metro area is projected to witness the most dramatic swing from a sellers’ market to a buyers’ market among the country’s 100 largest metro areas, according to the Knock real estate platform.

4. Real estate expert says Austin’s housing bubble may be about to burst. In March, researchers at the Federal Reserve Bank of Dallas warned that a housing bubble was on the horizon in the U.S. In June, one real estate expert said Austin led the country’s on-the-bubble housing markets.

5. Austin’s first ‘supertall’ tower could be the tallest building in Texas. Plans are underway for what would be the first “supertall” building in Austin — and perhaps the tallest building in Texas. In April, Augustine Verrengia, civil market leader at civil engineering firm WGI, said the height of a 74-story tower on tap for 98 Red River St., near the Austin Convention Center, would exceed 1,000 feet. He claims it would earn status as the tallest building in Texas.

The 74-story tower would exceed a height of 1,000 feet. Courtesy of Augustine Verrengia/Linkedin

6. Austin shines as a 'supernova' real estate market in this 2023 forecast. The Austin real estate market may be changing, but it is still one of the hottest in the U.S. as we head into 2023. The Urban Land Institute (ULI)'s annual Emerging Trends in Real Estate report, released in October, named Austin the No. 4 U.S. market to watch in 2023, behind Nashville (No. 1), Dallas-Fort Worth (No. 2), and Atlanta (No. 3).

7. New vineyard development will uncork more than 1,000 homes in Austin suburb. A residential development anchored by a winery and resort is taking shape in Williamson County. The first phase of what will eventually be more than 1,000 homes is underway at the more than 600-acre Vineyard at Florence, a $500 million mixed-use development just east of the tiny town of Florence. Dallas-based Hoque Global has been marketing one-acre to three-acre home lots at The Vineyard at Florence since last August.

The Vineyard at Florence is the first “residential winery" in Texas. Courtesy of the Vineyard at Florence

8. Burgeoning Austin suburb boasts second-hottest neighborhood for U.S. homebuyers. The population of Leander soared 123 percent from 2010 to 2020, and the growth shows no signs of letting up. A new report from residential real estate platform Opendoor provides further evidence of the continued popularity of the Williamson County suburb. Leander’s 78641 ZIP code ranked second on Opendoor’s January list of the country’s 10 most popular ZIP codes for homebuyers.

9. Oscar winner flips the script with quiet purchase of Austin mansion. Oscar-winning movie star Emma Stone joined the cavalcade of celebrities who’ve been scooping up homes in the Austin area. Real estate website Dirt.com reported in April that Stone purchased an estate in Central Austin’s much-sought-after Tarrytown neighborhood for an undisclosed amount last May.

10. Austin ranks among 20 U.S. cities where middle class can’t afford housing anymore. Austin’s housing pain is real, and evidence of the high price of housing in the metro area keeps mounting. A spring study from the 24/7 Wall St. website listed Austin among the 20 places in the U.S. where the middle class can no longer afford housing. Austin ranked 18th among the 20 metro areas in that category.

real estate report

How Austin fits into Zillow's predicted housing market growth in 2025

Photo by Justin Wallace on Unsplash

Potential homebuyers in Austin may see improving mortgage rates and home prices in 2025, according to Zillow.

It looks like a few more people are about to turn their online home shopping daydreams into reality in 2025. Zillow, the famous real estate listings website, says in a press release that next year will likely bring "a gradual but bumpy decline in rates, impacting sales and price growth."

It attributes the forecast to "erratic and dramatic mortgage rate movements" throughout 2024, which will continue to affect the market. The website's housing market predictions report estimates that 2025 will see about 100,000 more sales than 2024, that home value growth will be "low and slow" at 2.2 percent, and that inventory and new listings will continue recovering from pandemic weakness.

On a local scale, Zillow's latest data shows Austin has already experienced a 3.4 percent drop in annual average home values from 2023 to 2024, which will continue fluctuating in 2025.

As of November, Zillow's home value index says the average home in the Austin metro is worth $443,995. That figure is greater than the Austin Board of Realtors' median home sales price in Austin-Round Rock-San Marcos, which came out to $435,000 last month, reflecting an estimated 2.4 percent increase for just the month of November year-over-year from 2023.

Pick the right season to buy
Potential buyers may see better opportunities for purchasing a home during the fall and winter, which is a typically slow season for home sales. Across 36 out of the 50 biggest U.S. metro areas, Zillow's heat market index showed a drop in competition from October to November.

"There's a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path," said Zillow chief economist Skylar Olsen in the release. "Those shopping this winter have plenty of time to choose and a relatively strong position in negotiations."

Zillow suggests buyers may have the ability to negotiate "from a position of safety" during the slow winter months. This is especially true for Austin-area buyers, who only saw 10.4 percent of homes sell for more than their listing price in October. The website says buyers can take advantage of opportunities to buy contingent on inspections or repairs, and they may avoid bidding wars during this time.

"While the number of options available to shoppers today are lower than they will likely see in the spring, there's also less competition in the field," the report says. "The [national] share of homes that sold for more than list price was below 28 percent in October (the latest data available), continuing a downward trend that began in July."

Buyers will head to the Southwest
Eyes are also turning to the American Southwest as the top region for homebuyers in 2025, as 13 major metro areas – including Austin and San Antonio – are now considered “buyer’s markets” where buyers have more negotiating power than sellers.

However, this prediction depends on the gravity of falling mortgage rates. Homebuyers should also keep a close eye on mortgage rates in 2025, which could drop unpredictably like they have been for the last three weeks in a row. If the rates dip further than expected, that doesn’t bode as well for buyers.

“It is anticipated that a significant mortgage rate dip would bring more buyers than sellers back to the market, increasing competition and tilting negotiating power in favor of sellers,” Zillow says.

Small-home living is gaining traction
As Austin and other major cities are battling for more high density housing, buying trends are also leaning towards smaller (and more affordable) homes.

Zillow even goes as far to say that the “pandemic-era need” for large houses is officially a thing of the past.

"The term 'cozy' is appearing in more listing descriptions — 35 percent more in 2024 compared to 2023 — reflecting current design trends that have shifted away from cavernous open floor plans, toward contained spaces that have their own style and purpose," the report says.

housing market zillow