Homeowners across Austin are learning a brutal lesson about buying at the top of the market. 

Ryan McPherson bid $20,000 over asking for a four-bedroom home in East Austin back in 2022, paying $615,000 for a house he’s now bracing to sell for as little as $420,000, a roughly 30% loss.

“Everybody that I worked with, they kept saying Austin only goes up,” McPherson told Business Insider in an interview. 

He’s since moved back to Phoenix and is done waiting for a turnaround. “I’m not going to keep trying to wait this out and pray that there’s a turnaround, because it’s not coming right now,” he said. “I’d rather just stop losing sleep over it.”

He’s far from alone. Austin has posted the steepest home price drop of any major US metro over the past four years, with asking prices down nearly 25% since the 2022 peak, according to a Realtor.com analysis. 

Roughly 79% of homes that sold that year are now worth less than their purchase price.

Remote workers fleeing pricier coastal cities flooded into Austin during the pandemic, drawn by lower taxes and cheap housing. The metro’s population jumped more than 5% between 2020 and 2022, census data shows, making it the fastest growing large city in the country.

“Ironically, affordability was the big draw,” Joel Berner, a senior economist at Realtor.com, told BI.

Asking prices soared 36% year-over-year by August 2021, and typical homes topped $465,000 by spring 2022, Realtor.com figures show. “Prices were getting totally out of control,” Berner said.

Builders piled in, growing Austin’s housing supply by more than 20%, or roughly 211,000 units, between 2020 and 2025, per census estimates. Then the Fed started hiking rates that March, and buyers vanished just as new construction flooded the market.

“Everything was going into multiple offers, and then it really just stopped,” Austin agent Lindsay Neuren said. “That really spooked the market.”

Gary Froniewski bought a North Austin condo in 2022 and figures it’s lost as much as half its value since.

“I expect to take a haircut on this, no matter what,” Froniewski told the outlet. “It’s just a matter of how devastating it ends up being when we’re ready to actually move.”

Others have already taken the hit. Agent Cynthia Mattiza is representing 2022 buyers now pricing their home at a loss. 

“We’re just thankful to receive any offer sometimes,” she said. Fellow agent John Mundell recently helped clients in Buda sell for $30,000 less than they paid.

“They’re kind of screwed,” Mundell said. “But they had to move.”

Sellers who once ignored stained carpets and repairs now have to fix things up themselves before listing, Mundell said, and he’s grown pickier about which homes are worth his time.

“I’d take anything before,” he said. “Now I’m just being a little more selective.”

Some owners are listing homes for sale and rent at once, betting that becoming a landlord beats a loss. McPherson tried it in 2025, renting his home for $2,500 a month against a $4,000 mortgage payment. It bought him time, not a fix.

“Life taught me an expensive lesson,” he said. “Hopefully, I don’t repeat these mistakes.”

Not everyone is gloomy. Berner, who bought his own Austin home in 2023, just won a 12% cut on his property tax assessment.

“If I had a crystal ball and saw that my home would basically not appreciate in the three years that I owned it, and I could have continued renting for about two-thirds of what I pay in my mortgage, I probably would have stayed renting,” he said. “But I didn’t have that crystal ball.”

Pending sales rose 11% year-over-year in June and price cuts are growing rarer, per Realtor.com, and Zonda executive Keith Hughes ranks Austin tops nationally for long-term fundamentals.

“The underlying conditions support a comeback,” Hughes said.

Froniewski isn’t second-guessing his 2022 purchase, even if the timing stings.

“I’m a firm believer that you can’t time the market,” he said. “You never know when the peak is, and you never know when the bottom is.”

Still, he admits: “If I had to sell the house today, I would be in shambles.”