Home Sellers: Are You at Risk of Losing Money?

The U.S. housing market is shifting, and home sellers face increasing risks of selling at a loss. Below is a detailed analysis of the current market trends, with a focus on Texas and the Austin Metro area.

National Trends

• Redfin reports that 6% of U.S. home sellers are at risk of selling at a loss, up from 4.4% last year.
• This represents a 36% increase in risk year-over-year [(6% / 4.4%) – 1].
• For detailed data on the 50 largest U.S. metro markets, view the detailed table.

Texas Market Overview

• Alex AI reports that 8.56% of Texas home sellers are at risk of selling at a loss.
• This is 50.2% higher than the national average.
• Every Texas metro market has a higher risk than the U.S. average.
• For detailed data, analysis, tables, and charts on the 5 largest Texas metro markets, view the detailed report.

---

---

Austin Metro: A Buyer’s Market

• The Austin Metro has fully shifted to a buyer’s market, with only a few micro markets resisting the trend.

Austin Sellers’ Risk of Loss vs. U.S. Sellers

Below is a breakdown of the risk of loss for Austin Metro home sellers compared to the U.S. average, based on various factors:

By Date of Purchase Metro Area Compared to US

• After Pandemic (Dec 2022 or later):
  • 47.5% risk of loss
  • 190% higher than the U.S. average
• During Pandemic (Nov 2020 to Nov 2022):
  • 32.2% risk of loss
  • 258% higher than the U.S. average
• Before Pandemic (Before Nov 2020):
  • 0.5% risk of loss
  • 72% lower than the U.S. average

By Property Type Metro Area Compared to US

• All homes (regardless of purchase year):
  • 13.8% risk of loss
  • 142% higher than the U.S. average
• Single-family homes:
  • 13.2% risk of loss
  • 200% higher than the U.S. average
• Condos:
  • 18.6% risk of loss
  • 94% higher than the U.S. average

If Prices Fall Metro Area Compared to US

• 1% price drop:
  • 15.0% risk of loss
  • 134% higher than the U.S. average
• 3% price drop:
  • 16.9% risk of loss
  • 109% higher than the U.S. average
• 5% price drop:
  • 18.9% risk of loss
  • 87% higher than the U.S. average

Why Is This Happening?

Several factors are contributing to the increased risk of loss for sellers:

• More sellers than buyers in the market.
• High interest rates discouraging buyers.
• Economic uncertainties impacting buyer confidence.
• Aspirational list prices leading to longer market times.
• As a result:
  • Homes are staying on the market longer.
  • Discounts are increasing.
  • Pricing is fluctuating.

Submitted by Diane Hart Alexander, MBA, MHA, Alex Chair.

---

---

AUSTIN METRO % ALL HOMES FOR SALE RISK OF LOSS BASED ON PURCHASE DATE OF PURCHASE

If bought after July 2022, 47.5% of homes for sale are at risk of selling for a loss.

---

RISK BASED ON MARKET PRICE CHANGES

In Metro Austin, the overall risk of homes on market selling at a loss is 13.8% based on data from May 31, 2025.

If prices fall by 1%, risk of selling at a loss increases to 15.0%. If prices fall by 2%, risk increases to 16.9%. If prices fall by 5%, risk becomes 18.9%.

---

SINGLE FAMILY VS CONDO RISK

In Metro Austin, the overall risk of a condo on market selling at a loss vs a single family home on the market selling for a loss is 34.8% HIGHER.

---

🛠️ Why Are Sellers Losing Money?

Several factors are driving these losses:

🔹 Aspirational pricing: Pricing above the market to test the market typically results in taking longer to sell and selling for less than market value. Alex Real Estate refers to this as the “Aspirational Pricing Syndrome.”
🔹 High purchase prices: Buyers who purchased during the 2020-2022 pandemic boom paid top dollar due to low mortgage rates and bidding wars.
🔹 Rising mortgage rates: Rates near 7% in 2025 make it harder for buyers, reducing demand.
🔹 More inventory: Texas has 16.2% more homes for sale than last year, giving buyers more choices and bargaining power.
🔹 Economic uncertainty: Buyers working with real estate experts like Alex Real Estate are more precise in valuations than ever, leaving sellers with fewer offers.

---

🛠️ What Can Texas Sellers Do?

Sellers can take action to avoid losses:
🔹 Price competitively: Set realistic prices based on current micro data and market trends.
🔹 Work with experts: Partner with expert real estate teams supported by AI and MBAs focused on micro market data, research, analysis, valuation, pricing, negotiations and marketing like those at Alex Real Estate to navigate the market.
🔹 Improve your home: Get your home make ready. If you are an Alex client, we provide you a project plan with ROI estimates by project item to maximize your investment return.
🔹 Be patient: It is taking longer to sell.

---

🛠️ Contributing Organizations

🔹 Redfin: Provided the core data and analysis on the U.S. housing markets
🔹 Alex Real Estate and Alex AI: Provided the research, analysis and graphics on the Texas housing markets
🔹 Mark Worley, Redfin Data Journalist
🔹 Asad Khan, Redfin Senior Economics
🔹 George Alexander, Alex Real Estate Associate Broker and Director Alex AI

---

🛠️ My Perspective

As a Real Estate AI expert, I see the housing market as a complex system where data and technology can make a difference. Tools like Redfin’s Home Price Index and Alex AI’s research, analysis and visualizations show how AI can predict trends and guide decisions. Texans must act now—use data-driven strategies to price homes correctly whether you are a buyer and/or a seller. Don’t wait for a market shift further against you!

Text “Stats” to George Alexander at 713.918.9951 to explore this article or anything related to Texas real estate.