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By Giulia Carbonaro
Senior Reporter
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The Texas cities of San Antonio, Austin, and Dallas are finding themselves "in the crosshairs" of potential home price drops this year, according to real estate analyst Nick Gerli.
Newsweek contacted Nick Gerli and Texas Realtors for comment by email on Friday morning, outside of standard working hours.
Why It Matters
Thanks in part to its relatively cheap home prices and lower cost of living, the Texas housing market boomed during the pandemic years, with an influx of out-of-state people bringing up demand.
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Pandemic hotspots like Austin, Houston, and Dallas saw a significant price appreciation as a result of these dynamics—but after the end of the health emergency, prices started falling in all major metropolitan areas in Texas thanks to a boom in construction in the state.
What to Know
According to Redfin's latest data, the median sale price of a home in the Lone Star State was $350,600 in December, up 2.6 percent from a year earlier. A home in Texas was generally still cheaper than at the national level, where the median sale price was $427,179 in the same month, up 6.2 percent year-on-year.
At the same time, the number of homes for sale had risen by 13.9 percent in Texas between December 2023 and December 2024, while at the national level it had climbed by a more modest 12.0 percent.
"Housing supply in Florida and Texas has skyrocketed, with the number of active listings in these markets up 268 percent from their pandemic low," Gerli, CEO of real estate data platform Reventure App, wrote on X on Thursday.
The number of active listings in the two states, according to the real estate analyst, is at "the highest levels going back at least 8 years," Gerli said. "Inventory has gone up so much in FL/TX that supply is now 21 percent above."
Reventure's data shows that Tampa in Florida and San Antonio, Austin, and Dallas in Texas are now at risk of seeing significant home price declines throughout 2025.
"At this stage, it's unclear when the supply/demand balance will be reached," Gerli told Newsweek. "Inventory in each of these markets is still rising, and demand is subdued," he added. "Home prices are anywhere from 10-30 percent overvalued in these areas, so it could be some time before we see demand restored."
Austin
According to Redfin's latest data, home prices in Austin were still on the rise, year-on-year, in December, when the median sale price of a home in the Texas capital was $535,000, up 2.7 percent compared to a year earlier—and much higher than the median sale price at the state level.
Realtor.com's latest data on the city shows that the median listing home price in Austin was $585k in December, trending down -7.1 percent year-on-year, though the median sold price was $550k.
Despite stubbornly high prices, the former pandemic boomtown of Austin has seen major price declines since the pandemic. In May 2022, the median sale price of a home in Austin reached the peak of $667,000, according to Redfin.
The real estate brokerage also reports that Austin isn't a very competitive market at the moment, with homes receiving two offers on average and selling in around 83 days.
According to Realtor.com, Austin has already turned into a buyer's market, "which means that the supply of homes is greater than the demand for homes." According to the website, there were 7,267 homes for sale in the city in December.
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Dallas
In December, the median sale price of a home in Dallas was $426,000, up 7.8 percent compared to a year earlier, according to Redfin. However, the market in the city isn't very competitive either: homes sold after 56 days on average, compared to 40 days last year, showing that demand is slowing.
Realtor.com reported that the median listing home price in Dallas was $399k last month, trending down -9.1 year-on-year. In the same month, there were 3,324 homes for sale in Dallas, which Realtor.com also described as a buyer's market.
San Antonio
The median sale price of a home in San Antonio was $265,750 last month, up by a modest 0.3 percent from December 2023, according to Redfin. On average, homes in the city sold after 67 days on the market, compared to 54 days last year.
Realtor.com's data shows that the median listing home price was $290k in December, trending down -3 percent year-on-year. Last month there were 15,178 homes for sale in the city, the website reported, making San Antonio another buyer's market.
What People Are Saying
Redfin economist Chen Zhao previously told Newsweek: "Buyers in the weaker Sun Belt markets such as Florida and Texas may be able to negotiate the best deal and have the most selection [this year]. In other markets, inventory will be lower and there will be less room to negotiate."
Nick Gerli, real estate analyst and CEO of Reventure App, previously told Newsweek: "Reventure is forecasting home price declines in 2025 in Texas and Florida especially. Don't be surprised if price reductions cluster in suburban and rural areas, where the homebuilders are most active."
What's Next
Several real estate experts are expecting home prices to come down in some of Florida's and Texas' major metropolitan areas, as the two states embarked on the highest number of new construction projects in the country in the past few years.
Norada Real Estate Investments' Marco Santarelli, who recently published a report saying that home prices are likely to fall in 31 metros in Texas this year, previously told Newsweek that, despite potential price drops, the Lone Star State's housing market is unlikely to experience a crash. On the other hand, price declines are a natural correction of the overheating of the state's housing market during the pandemic.
"While we are moving into a more balanced market, and some areas are expected to see minor price declines, the overall fundamentals of the Texas economy remain strong," Santarelli said. "The population growth, job market, and demand for housing all support a stable market, rather than a dramatic drop."
Update, 1/27/2025 5:10 a.m. ET: This article was updated with a comment from Nick Gerli.
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