Austin Real Estate Market Update: December 2024
December 2024 closes out a year that brought Austin's housing market back to earth after the pandemic-era frenzy. The Keenan Group tracked every shift across 1,000+ transactions. The correction that started in mid-2022 has largely run its course, and what we are seeing now looks more like a healthy, functioning market than anything resembling a crash. Buyers have options again, sellers need to earn offers rather than collect them, and pricing has reconnected with reality. For anyone making a move in early 2025, this is actually a productive environment - if you understand where things stand.
Current Market Snapshot
As of December 2024, Austin's metro area sits at roughly 3.5 months of active inventory, up from the barely-functional 1.5 months we saw in 2022 but still short of the 6-month mark that economists consider a truly balanced market. The luxury segment ($1M+) is running at 4 to 5 months of supply, which gives high-end buyers meaningful selection without creating the oversupply that drives panic discounts.
The Austin metro median price has settled around $450,000, down approximately 10% from the 2022 peak. That number has been stable for the past six months, suggesting we have found a floor rather than continuing to slide. Homes in the $1M+ range have held value better than the broader market, partly because luxury buyers tend to be less rate-sensitive and partly because prime locations in central Austin and Eanes ISD do not produce surplus inventory.
Days on market tell the real story of how the market feels. The metro-wide average runs 55 to 65 days. Luxury properties take 70 to 90 days. But well-priced homes in strong locations still sell in 21 to 30 days, while overpriced listings sit past 100 days and eventually take a price cut. The gap between realistic pricing and aspirational pricing has never been more obvious.
Price Segments Analysis
The market behaves very differently depending on price point. Under $500K remains the most competitive tier. First-time buyers and relocating professionals create steady demand, multiple offers are common, and well-maintained homes move in 30 to 45 days.
The $500K to $1M range has reached genuinely balanced conditions. Buyers can negotiate, take time with inspections, and expect 45 to 60 days on market. This is where move-up buyers are most active, and where sellers who prepare their homes properly still do well.
Above $1M, the advantage shifts to buyers. Price negotiation is expected, marketing times stretch to 60 to 90 days, and quality of finishes, location, and condition separate the homes that sell from those that linger. In the $2M+ tier, buyers are highly selective, negotiation is significant, and only truly distinctive properties generate urgency. Marketing times of 90 to 120+ days are typical.
Neighborhood Performance
The strongest submarkets share common traits: excellent schools, central locations, and limited supply. Eanes ISD continues to drive demand in Westlake and West Lake Hills, with families willing to pay a significant premium for those campuses. Central Austin neighborhoods like Tarrytown and Bryker Woods carry a location premium that holds through any cycle. Lake Travis waterfront benefits from the simple math of fixed shoreline and growing demand. Northwest Hills offers strong schools and larger lots at prices below Westlake, making it a consistent value play. Mueller's walkability and mixed-use design keep demand steady from buyers who prioritize lifestyle over lot size.
The more challenging segments include far-suburban developments where commute times have become a real concern, older homes requiring significant renovation investment, overbuilt areas where new construction competes directly with resale inventory, and HOA-heavy communities where rising fees erode affordability.
Interest Rate Impact
Mortgage rates remain the dominant force shaping buyer behavior. Conventional 30-year rates sit in the 6.5% to 7% range, with jumbo loans at 6.75% to 7.25% and adjustable-rate mortgages around 6%. These numbers feel high to anyone who bought or refinanced during the 2020-2021 window, but they are historically normal. The long-term average for a 30-year mortgage is roughly 7.5%.
What has changed is buyer strategy. Rate buydowns - where the seller or buyer pays upfront to reduce the rate for the first few years - have become a standard negotiation tool. Adjustable-rate mortgages are making a comeback for buyers who plan to refinance or move within five to seven years. And almost every buyer we work with has a refinance plan built into their purchase strategy, treating the current rate as temporary.
What This Means for Sellers
Pricing strategy is everything in this market. Competitive pricing from day one is essential - the days of aspirational list prices and bidding wars are over for most segments. If a home has not generated serious interest within 30 days, a price adjustment is needed. Pre-listing inspections, fresh paint, updated flooring, and professional landscaping provide measurable returns. Professional photography is non-negotiable. Staging continues to show positive ROI, particularly in the $750K+ range where buyers expect a polished presentation.
Timing matters, but every season has its advantage. Spring brings the highest buyer activity. Summer captures family relocations tied to school calendars. Fall attracts serious, motivated buyers with less competition from other sellers. Winter rewards sellers willing to list when inventory is lowest.
What This Means for Buyers
Buyers are in the strongest negotiating position since before the pandemic. Inspection contingencies are standard again, seller concessions toward closing costs and rate buydowns are common, and there is time to make thoughtful decisions without the panic of 24-hour offer deadlines. The smart approach is to get a fully underwritten pre-approval (not just a pre-qualification), know your non-negotiable priorities, and move with confidence when the right property appears. Fair, well-structured offers win - lowball offers just waste everyone's time.
2025 Outlook
We expect continued price stability through 2025, with modest inventory increases as more homeowners gain confidence to list. Rate sensitivity will remain a defining feature of buyer behavior, and homes that combine quality finishes with strong locations will continue to command premiums. The wild cards are interest rate movements, tech industry performance, new corporate relocation announcements, and the pace of new construction deliveries entering the market.
The Keenan Group Perspective
After 25+ years and $1B+ in Austin transactions, we have seen multiple cycles. This market rewards realistic expectations, quality preparation, expert representation, and patient execution.
The fundamentals driving Austin remain strong: a diversified tech economy, sustained population growth, high quality of life, and no state income tax. Short-term fluctuations do not change the long-term trajectory. Austin has come out stronger after every correction, and this one is no different.
Ready to discuss your situation? Contact us: 512-415-7653 | keenan@compass.com
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