Most homes across the country have lost value since last year, and the market shift has hit Texas especially hard.
Fifty-three percent of homes declined in value this year, according to Zillow. The average share of homes that have depreciated in the Texas Triangle — Dallas, Houston, Austin and San Antonio — is over 85 percent.
Austin had the greatest drop in average home value among the top metros in the country since the last market peak. The former tech boomtown, which had meteoric growth during the pandemic, has suffered a 20 percent decline in home values, according to Zillow’s Zestimate function.
Austin, San Antonio and Dallas are also three of the top five cities with the largest share of listings priced below their last sale. San Francisco ranks first with 14 percent of homes valued below their most recent sale price, but Austin is close behind with 13 percent of homes. Eight percent of homes in San Antonio and 7 percent in Dallas have depreciated since their last sale.
The change in the market doesn’t undo the growth of the last six years. In the context of the value surge that homeowners have enjoyed, this year’s decline “is a normalization, not a crash,” Zillow analyst Treh Manhertz said.
“The vast majority of homeowners still have significant equity,” Manhertz said.
That’s not the case for single-family investors who bought homes during or after the pandemic boom — sellers who make up a substantial share of the Texas market.
Thanks in large part to DFW, Texas had the highest rate of homes sold to institutional investors in 2021, drawing Wall Street attention to Tarrant and Rockwall Counties.
In Austin, where the share of investor-owned homes generally hovered under 20 percent, investors swelled to almost a third of the market during the pandemic.
Single-family homes aren’t the golden goose they used to be. The market downturn is pitting professional landlords against “accidental landlords,” homeowners who are renting out their homes rather than attempting to sell. Sun Belt cities saw a significant share of listings turn into rentals, resulting in rent declines in Dallas, among other cities.
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