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This City Dodged the 2008 Housing Market Crash, but It’s Bottoming Out in a 2023 Correction

Housing Markets

This City Dodged the 2008 Housing Market Crash, but It’s Bottoming Out in a 2023 Correction

The Lone Star State bypassed a 2008 home price crash, but it's now caught in the middle of a 2023 market correction

June 6, 2023
Austin, TX skyline
Image: f11photo / Stock.adobe.com

In the early 2000s, Sun Belt markets that were initially expected to boom were among the first to crash ahead of the financial crisis, but one exception was Texas. While other metros bottomed out, Austin and Dallas saw home prices fall by just 8.5% and 10.5%, respectively, peak-to-trough compared with a staggering 63.9% drop in Las Vegas during the same housing cycle. 

Over a decade later, Austin is now the epicenter of a post-pandemic housing correction. Between July 2022 and April 2023, Austin home prices as measured by the Zillow Home Value Index dropped 10.02%, the most substantial decrease among the nation’s 400 largest housing markets, according to Fortune.

Where will Austin go from here? It's hard to say.

Moody's Analytics estimates that the Austin-Round Rock-Georgetown, Texas metro area will see a -17.9% peak-to-trough house price decline this cycle, including a -8.8% decline between Q2 2023 and Q2 2024. However, Zillow's forecast model is predicting Austin will rebound +2.2% between April 2023 and April 2024.

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