Home prices in the former pandemic boomtown of Austin, Texas, have slowly started to climb back in March and April, according to Redfin data, but are far from their 2022 peak, as the market is flipping in favor of buyers and the city experiences troubles with developers abandoning projects.

In April, the latest data available on Redfin, the median sale price of a home was $567,000, up 0.4 percent compared to a year earlier but down 16 percent compared to the peak of $667,000 reached in May 2022. Austin, once one of the hottest markets in the U.S.—and one of the most overvalued—experienced the biggest drop of any metropolitan area in the country following the pandemic.

In May 2024, according to data compiled by ResiClub using the Zillow Home Value Index, home prices in Austin were down 18.7 percent compared to the May 2022 peak.

The only other cities that experienced price drops beyond the 10 percent mark from their pandemic peak were New Orleans, Louisiana (-13.7 percent); Lake Charles, Louisiana (-11.7 percent); and Boise, Idaho (-10.4 percent).

The U.S. housing market experienced a modest price correction between late summer 2022 and spring 2023, driven by the increasing unaffordability of buying properties in a higher mortgage rates environment.

In Austin, which saw a huge influx of residents during the pandemic driving up prices, the correction was a much more dramatic phenomenon. Prices slid down as coastal and remote workers started leaving the city after the end of the pandemic and new construction projects got on the way, increasing Austin’s inventory.

While a historic lack of supply at the national level has contributed to keeping prices from plunging and is now leading their slow comeback in Austin too, there’s no doubt that the city is not the same place it was during the pandemic years.

Software giant Oracle Corp. announced a month ago that it would be moving out of Austin and creating its “world headquarters” in the city’s archrival, Nashville, Tennessee. The company had arrived in the Texas capital only in 2020.

In recent months, Austin has seen developers abandon several construction projects, as reported by Austin realtor Jeremy Knight in a series of videos on YouTube. In a previous comment to Newsweek, Knight explained that many of these projects started in 2020-2021 as the market was beginning to skyrocket.

“There was a lot of demand with more people moving to Austin. Unfortunately, the city of Austin has a lot of red tape and logistics to get through. Many of these projects take years to get greenlit,” he said.

“Now add the delays with workforce during the pandemic, the backlog, and developers rushing to buy in Austin, and then a turn in the market of 21 percent peak to trough. The valuations many of these developers put on these projects no longer make sense. Now add the fact that interest rates have doubled and nearly tripled since the projects started. Many of these small developers are facing headwinds.”

In a recent video, Knight said that over 57 percent of the inventory on the market is now vacant.