Homes at Risk of Selling at a Loss: Austin’s Post-Pandemic Reality

Austin’s real estate market has been on a wild ride. The pandemic boom saw prices skyrocket, creating an intense, competitive environment. But what goes up must eventually level out. The breakneck pace has cooled, and for homeowners who bought at the peak, the new reality can be challenging.

As we moved through 2024 and into 2025, the market shifted. Inventory has climbed, giving buyers more options and more leverage than they’ve had in years. This has increased the number of homes at risk of selling for less than their purchase price.

A recent analysis from Redfin shows that nationally, about 6% of sellers are in this “at-risk” category. However, the situation is more pronounced in specific areas. Austin stands out among major metropolitan areas, particularly for homes bought after mid-2022.

If you’re a homeowner or a potential buyer in Austin, what does this mean for you? This guide will break down why recent buyers are more vulnerable, pinpoint the Austin neighborhoods where this risk is highest, and offer actionable strategies for both buyers and sellers to navigate this evolving market.

Why Are Pandemic-Era Homebuyers More Vulnerable?

The current market dynamics put homeowners who purchased during the 2020-2022 peak in a precarious position if they need to sell now. Several factors contribute to this vulnerability.

They Paid Peak Prices Amidst Fierce Competition

Between 2020 and 2022, a combination of record-low interest rates and a massive influx of demand pushed home values to all-time highs, especially in cities like Austin. The fear of missing out (FOMO) kept prices elevated even as the initial frenzy began to subside. However, as interest rates climbed, demand cooled, and home values in some areas began to recede from those peaks. This shift disproportionately affects anyone who bought at the top and now finds themselves needing to sell.

They Have Thinner Equity Cushions

Homeowners who bought before 2020 have benefited from years of significant appreciation. They have a substantial equity cushion, which allows them to negotiate on price and still sell for a profit. In contrast, those who bought between 2020 and 2022 have had less time for their equity to grow. This makes them much more sensitive to even minor price fluctuations and the standard costs of selling a home.

Redfin’s data illustrates this trend clearly:

• Only ~1.8% of pre-pandemic sellers nationwide are at risk of selling at a loss.
• This figure jumps to ~9% for those who bought during the 2020–2022 pandemic boom.
• For those who purchased after mid-2022, the risk is even higher, at ~16.4%.

The Data: A Tale of Two Markets – National vs. Austin

To understand the full picture, it’s helpful to compare the national trends with what’s happening specifically in Austin.

National Real Estate Snapshot (May–July 2025)

• 6% of U.S. sellers are at risk of selling at a loss, according to Redfin’s predictive models for active listings.
• Competition has softened considerably. The typical home sold in July went for about 1% below its asking price, with the number of under-ask sales reaching multi-year highs.
• Inventory and the time homes spend on the market are returning to more normal levels. Realtor.com reported that the national months of supply in June were approaching what is considered a “balanced” market.

Austin’s Unique Market Situation

The Austin market tells a more dramatic story.

• Roughly 14% of active listings in Austin are at risk of selling at a loss. This is more than double the national average and a significant increase from about 6% a year ago.
• The risk is heavily concentrated among recent buyers. A staggering 47.5% of Austin listings for homes bought after July 2022 are at risk. For homes bought during the pandemic, that number is 32.2%. In stark contrast, only 0.5% of pre-pandemic purchases are at risk.
• The market balance has decidedly shifted in favor of buyers. Unlock MLS data shows between 6.1 and 6.9 months of inventory across the metro area in July, with Austin proper hitting 6.9 months. A market with over 6 months of inventory is generally considered a buyer’s market.
• Selling below the list price is now common. In February 2025, approximately 80% of homes in the Austin area sold for less than their original asking price.

The takeaway is clear: The risk of selling at a loss in Austin is most significant for those who bought during or immediately after the pandemic boom. This is especially true in areas where new construction has surged, creating intense competition for sellers.

Where is the Risk Concentrated? Neighborhoods & Price Points

The risk of selling at a loss isn’t uniform across the city. It’s clustered in specific neighborhoods and price bands, influenced by factors like new construction and buyer demand.

1. New-Construction Heavy Suburbs

Suburbs that experienced a new-build boom are now seeing the effects of increased supply. Areas like Leander, Georgetown, Lago Vista, Kyle, and parts of Hutto, Manor, and Liberty Hill have witnessed widespread price reductions and builder incentives. Data from spring/summer 2025 showed that over 50% of active listings in the metro area had price drops, with some builders cutting prices by more than 10-15%. This intense competition from new builds puts immense pressure on resale sellers, especially if they bought recently at a higher price point.

2. Entry-to-Mid Price Tiers Competing with Builders

When a home buyer can purchase a brand-new, turnkey home with incentives like rate buydowns and closing cost credits, it changes the game for nearby resale properties. Resale homes in the $350,000–$600,000 range must be priced very competitively or offer superior features like a better lot or location to attract buyers. Builders’ aggressive incentives and large inventory pipelines amplify this pressure, making it difficult for individual sellers to compete.

3. Condos and Properties with Leasing Restrictions

Nationally, condos have a higher share of sellers at risk than single-family homes, and this pattern holds true locally. This is often exacerbated in communities with strict HOA rules that limit or prohibit leasing. When sellers don’t have the option to “rent and wait” for the market to improve, they are more likely to accept a lower offer to sell the property quickly.

4. Outlying Areas with Smaller Buyer Pools

In neighborhoods farther from the city center, commute times are longer and access to major job centers is weaker. As a result, homes in these areas tend to stay on the market longer, and price cuts become more frequent. Properties in these micro-markets that saw rapid appreciation during 2020–2022 are now feeling the pressure as the buyer pool thins out. Data from Unlock MLS confirms that months of inventory are higher in several surrounding counties, reinforcing this dynamic.

Understanding the “At-Risk” Metric

It’s important to understand what Redfin’s “at-risk” number truly represents. This estimate is calculated by comparing a home’s expected sale price (based on current list-to-sale price ratios) to the seller’s original purchase price.

It’s a predictive measure, not a guarantee. It doesn’t mean every one of these homes will sell at a loss. Some owners may choose to take their homes off the market, rent them out, or simply wait for conditions to improve. However, it serves as an effective early-warning signal, identifying which group of sellers is most exposed if they need to sell in the current market.

The Buyer’s Playbook: How to Find a Smart Bargain

For buyers, the current market presents a fantastic opportunity. You don’t have to search for the absolute bottom of the market to find a great deal. Here are some proven tactics to identify value and minimize risk.

1. Target “Post-Pandemic Purchase” Listings

Look at the public sales history of a home. If you see it was purchased between 2021 and 2023 and is now back on the market, the seller is likely in that at-risk group. If you also see multiple price cuts or that the home has been on the market for a while, you may have significant negotiating leverage. This is especially true in areas with a lot of new construction competition.

2. Analyze the Micro-Market Dynamics

Austin’s average close-to-list price ratio is currently in the low-to-mid 90s, but this varies by neighborhood. When you see comparable homes closing 3–6% below their original list price, it’s a strong signal that there’s room to negotiate. We can help you analyze hyper-local comps, builder incentives, and pending sales to determine a smart offer price.

3. Use Builder Competition to Your Advantage

In areas with a lot of new construction, let us help you compare incentives. Builders are offering everything from rate buydowns and closing cost credits to upgraded design features and discounts on quick move-in homes. We can then compare the total cost of ownership for a new build versus a nearby resale, factoring in potential repair costs for the older home.

4. Prioritize Fundamentals That Hold Value

Certain features retain their appeal in any market cycle. Look for homes on cul-de-sac lots, with mature trees, or within walking distance of parks and schools. Low-traffic streets are always a plus. For condos, prioritize buildings with flexible leasing rules and financially stable HOAs. These are the properties that will hold their value over the long term.

5. Time Your Offers Strategically

Sellers often become more motivated the longer their home sits on the market. Listings that have been active for more than 30–45 days or have come back on the market after a previous deal fell through are prime targets. This is where you can negotiate on more than just price. Consider asking for seller credits towards closing costs, a rate buydown, or allowances for repairs, appliances, or landscaping.

6. Don’t Skip Your Due Diligence

A low price can sometimes hide underlying problems. Never skip a thorough home inspection, and make sure you investigate insurance costs and any potential flood risks. The goal is to find great value, not to buy a project filled with expensive surprises.

The Seller’s Playbook: How to Minimize or Avoid a Loss

If you bought your home between 2021 and 2023 and need to sell now, you’re facing a challenging market where buyers have the upper hand. But you’re not powerless. Here’s how to navigate the situation strategically.

1. Price for Today’s Market, Not Yesterday’s

It’s crucial to be realistic. Your competition includes brand-new homes with attractive builder incentives and neighboring resales that have already cut their prices. If you need to sell, the best way to maximize your net proceeds is often to price your home correctly from day one. This captures the attention of serious buyers early on and helps you avoid the costly process of “chasing the market down” with repeated price cuts.

2. Compete with Builders on Monthly Payments

If you’re selling near a new construction community, a simple price match might not be enough to win over a buyer who is being offered a rate buydown. A buydown can significantly lower a buyer’s monthly payment, making the new home more affordable. We can help you structure your offer to compete by offering seller credits that the buyer can use for their own rate buydown. This allows you to compete on the effective monthly payment, not just the sticker price.

3. Use Staging and a Pre-Inspection to Your Advantage

In a market with ample inventory, presentation is everything. A home that is move-in ready stands out. Professional staging can make a huge difference, and providing a clean pre-inspection report with receipts for any completed repairs can de-risk the purchase for a cautious buyer. This can give you a significant edge and help you avoid deep negotiations on concessions.

4. Timing is Everything (Again)

With over six months of inventory on the market, seasonality is once again a major factor. If you have the flexibility, we can analyze your neighborhood’s absorption rate and pending sales trends to help you choose a listing window with the least amount of competition.

5. Know When to Pivot

If you’re not getting showings or offers, it’s time to re-evaluate your strategy. This could mean a price adjustment, refreshing your listing with new photos, or even temporarily taking the home off the market to reset the “days on market” clock. Redfin notes that many would-be sellers are choosing this path rather than accepting a loss, which is a viable option if your financial situation allows.

Will This Market Shift Destabilize Austin Long-Term?

The short answer is no, it’s unlikely. The current risk of selling at a loss is concentrated among a specific group of recent buyers, not a systemic issue affecting the entire market.

Here’s why:

• Most sellers are not at risk. Even with Austin’s elevated numbers, the vast majority of homeowners are not in the at-risk category. Owners who purchased before 2020 are overwhelmingly insulated with significant equity.
• The market is balanced, not distressed. With 6-7 months of supply, we are in a balanced-to-soft buyer’s market, not a glut of distressed properties. This feels more like a necessary market correction than a crash.
• Austin’s core demand drivers remain strong. The city continues to attract people with its job opportunities, vibrant culture, and high quality of life. These fundamentals support long-term demand for housing.
• Price trends vary by submarket. While the overall metro median price has cooled, some areas like Travis County and the City of Austin have actually posted modest price gains. This shows that the market is nuanced, with different outcomes depending on location and property type.

The real story is that we are in a digestion phase, processing the effects of the pandemic boom and a major interest rate shock. This phase is redistributing leverage from sellers to buyers, creating opportunities for those who are prepared, and demanding a more strategic approach from sellers. It does not, however, erase Austin’s long-term appeal.

Let’s Create a Plan for Your Address

Every neighborhood, and even every street, is different. If you are thinking about buying or selling a home in the Greater Austin area, it’s more important than ever to have a hyper-local, data-driven strategy.

Reach out to us at Eleven Oaks Realty for a custom analysis of your neighborhood. We can provide:

• A micro-comparison of your target area versus nearby builder competition.
• Live comparable sales from the last 60–90 days, plus insights on pending escrows.
• A “loss-risk” screen of active listings, or a realistic net proceeds model if you’re selling.
• Strategic options tailored to your situation, whether it’s deciding between offering credits vs. a price drop, timing your listing, or developing a staging plan.

Ready to talk strategy? Let’s walk through the numbers and design a plan that fits your life and your goals. Call or text us at (512) 827-8323 or email us at info@11OaksRealty.com to schedule a no obligation consultation.

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