Most homes in the United States have seen a decrease in value over the past year, with Texas experiencing some of the most significant declines. According to Zillow, 53 percent of homes nationwide declined in value this year. In the Texas Triangle—which includes Dallas, Houston, Austin, and San Antonio—over 85 percent of homes have depreciated.
Austin experienced the largest drop in average home value among major U.S. metropolitan areas since the last market peak. The city saw a 20 percent decline in home values, based on Zillow’s Zestimate data. During the pandemic, Austin had rapid growth as a tech hub but has since faced steep losses.
Alongside San Antonio and Dallas, Austin is one of the top five cities with the highest share of listings priced below their previous sale price. San Francisco leads with 14 percent of homes valued below their last sale price; Austin follows closely at 13 percent, while San Antonio and Dallas report 8 percent and 7 percent respectively.
Despite these decreases, Zillow analyst Treh Manhertz said that recent changes do not erase gains made over the past six years: “The vast majority of homeowners still have significant equity.” Manhertz added that this trend represents “a normalization, not a crash.”
However, single-family investors who purchased properties during or after the pandemic are more vulnerable to losses. In Texas—particularly due to activity in Dallas-Fort Worth—2021 saw a high rate of institutional investor purchases that attracted attention from Wall Street firms focusing on counties such as Tarrant and Rockwall.
In Austin specifically, investor-owned homes usually made up less than 20 percent of inventory before surging to nearly one-third during the pandemic period.
The downturn has shifted dynamics for landlords. Professional property owners now face competition from so-called “accidental landlords”—homeowners renting out their properties instead of selling them. This increase in rental listings has contributed to falling rents in Sun Belt cities like Dallas.
