Out-of-state buyers looking at Austin often bring assumptions shaped by an earlier version of the market. Texas has no state income tax, Austin still benefits from a strong employment base, and the region remains attractive to buyers relocating from other major metros. But the financial outcome of a purchase depends much more on the specific property than on those broad market advantages.
Property taxes, insurance costs, water access, infrastructure exposure, and price performance can vary significantly by address and submarket. Austin prices have also changed materially since their 2022 peak. For buyers, the most useful approach is to evaluate the parcel, neighborhood, and carrying costs together rather than relying on a single Austin-wide narrative.
Why "No State Income Tax" Does Not Settle the Tax Question
Texas replaces income tax revenue with property and sales taxes, so the savings is a transfer rather than a discount. The Texas Comptroller describes a system relying principally on sales taxation, while local governments levy property taxes for schools, counties, roads, and special districts.
Tax Foundation's 2026 compilation, built on 2024 Census housing data, put statewide effective rates on owner-occupied housing as follows. These are statewide ratios, not any Austin address's rate.
The breakpoint moves with income. On a $1M property, the California differential of roughly $7,100 is matched by California income tax at about $115,000 of taxable income for a single filer. A move out of Florida clears nothing, since neither state levies an individual income tax and Texas averaged 8.20% in combined state and local sales tax against Florida's 6.98%. Whether a household comes out ahead is arithmetic for a CPA working from actual income and both addresses.
Austin Prices Have Shifted Since the 2022 Peak
The Texas Real Estate Research Center found Austin-area median prices rose nearly 60% between 2020 and the 2022 peak, then fell 22% by mid-2025 to roughly $440,000, still 23% above 2020. More recent metro sales data compiled from Unlock MLS put the July 2026 median near $435,000, up 1% year over year.
The measures disagree because they answer different questions. Medians shift with what sells in a given month, while FHFA's repeat-sales index for Austin-Round Rock-San Marcos follows properties that transact more than once and showed a 0.34% year-over-year gain alongside 15.25% growth across five years, positive because the run-up exceeded the correction. Broad peak-to-post-peak declines ran roughly 20% to 27% depending on geography and method, while values generally stayed above 2020 levels.
Affordability reads the same way. Austin may still be more affordable than markets such as San Francisco or New York, but current pricing remains well above Austin’s pre-2020 levels in many areas. The metro median blends five counties, every housing form, and every price tier, so it says nothing about what a $1M-plus home in West Austin, Barton Creek, or Lakeway should cost, which is why useful benchmarks are drawn submarket by submarket.
The Technology Economy Supports Demand, It Does Not Guarantee It
Austin's employment base is large. The Bureau of Labor Statistics counted roughly 1.422 million nonfarm jobs in the metro in its latest 2026 table, including about 48,500 information jobs and 294,600 in professional and business services. Direction within it has not been uniform:
Opportunity Austin's May 2026 indicators showed professional and business services, construction, and financial activities adding jobs.
Information employment fell 3.4% year over year.
Metro unemployment rose, per Bureau of Labor Statistics data, from 3.5% in June 2025 to 4.1% in June 2026.
Announcements warrant more caution, because an announcement is investment intent, not delivered demand:
Tesla's Austin-area factory workforce reportedly fell from 21,191 in 2024 to 16,506 in 2025.
Samsung's Taylor plant, targeted for 2024, had reached only limited operations by 2026, with sources disagreeing on whether meaningful production begins in 2026 or 2027, and full-scale operation targeted for 2028.
Oracle moved its headquarters designation to Austin in 2020, then said in 2024 that Nashville would ultimately become its world headquarters.
A projected job count does not convert into near-term absorption of homes above $1M.
The Seller's Tax Bill Tells You About the Seller
A listing's current tax figure records the previous owner's exemptions and assessment history. It does not transfer with the deed. Travis Central Appraisal District explains that the residence-homestead limitation holds growth in assessed value to 10% or current market value, whichever is lower, and that the limitation is owner-specific. A buyer does not inherit the seller's capped assessment; it begins in the tax year after the first year the current owner qualifies, which means occupying the home through January 1 before the cap does any work.
The cap is also narrower than its reputation. It limits qualifying assessed value, not the appraisal district's determination of market value, so a notice can show market value climbing well past 10% while assessed value stays limited. Budgeting a first year from the seller's bill is the most expensive misreading on this list; the county appraisal district can confirm which taxing units apply to a parcel.
The homestead rules also changed in late 2025. A November 2025 Texas constitutional amendment increased the mandatory school-district residence-homestead exemption from $100,000 to $140,000. For qualifying homeowners, this reduces the value subject to school-district property taxes, although it does not change the property’s market value or apply to every taxing unit.
Insurance Is Underwritten at the Parcel, Not the Metro
Premiums in Texas have moved sharply. The Federal Reserve Bank of Dallas reported that the median Texas homeowner paid 60% more for coverage in 2024 than in 2019, against a 30% national increase, and, citing Texas Department of Insurance data, statewide average premium growth of 18.7% in 2024 slowing to 4.3% in 2025. Texas FAIR Plan materials projected policies in force rising 14.5% during 2025, to 134,504. The plan serves applicants who cannot obtain qualifying private coverage, so that expansion signals statewide pressure.
None of that makes Austin uninsurable, and no metro figure predicts the outcome at one address. Wildland-urban-interface exposure, roof age, hail and wind claim history, distance from responding fire services, and flood zone all sit inside the underwriting decision. A bound quotation on the actual property, obtained during the option period, is the answer that counts.
Water, the Grid, and I-35 Are Not One Austin Story
"Lake Travis is low, so Austin is running out of water" compresses several systems into one sentence. LCRA manages lakes Buchanan and Travis together under a state-approved Water Management Plan that curtails interruptible stored water during drought while prioritizing firm municipal supply. Groundwater is a different question: as of August 19, 2026, the Barton Springs-Edwards Aquifer Conservation District, serving parts of southern Travis and Hays counties, remained in Stage 3 Exceptional Drought, continuous since July 2022.
The grid needs the same updating. Winter Storm Uri in 2021 was a genuine failure, but it does not describe current summer performance: EIA reported that ERCOT served a record 91.1 GW hourly peak on July 22, 2026, roughly 6% above August 2023's 85.5 GW record, without an emergency declaration. TxDOT's Capital Express Central fact sheet anticipated construction beginning in mid-2024 and states that the timeline is subject to change; the widely repeated 2032 completion date is a secondary-source projection, making I-35 a long-duration access question rather than a short inconvenience.
Testing the Story Against the Parcel Before You Shop
What this means for you is that nearly every widely held belief about this market is directionally useful and locally unreliable. The metro number is the wrong unit of analysis. Tax outcome depends on the taxing units serving one parcel and the income left behind, price movement on the submarket and index, insurability and water supply at the address.
The sequence is short. Pull the parcel's taxing units from the appraisal district and model the tax at your purchase price, not the seller's. Get a real insurance quotation on the actual property. Identify the water provider by address. Then judge price against comparable sales in that submarket.
Kacy Dolce is a Broker Associate with Christie's International Real Estate Lone Star who helps buyers relocating to West Austin, Barton Creek, Lakeway, and the Lake Travis corridor understand how local knowledge can shape a real estate strategy. With lifelong Central Texas roots and global reach, Kacy helps buyers evaluate candidate properties with greater confidence. If you're planning a move to the area, connect to build a buying strategy around your goals and timeline.
Frequently Asked Questions
Does Texas non-disclosure mean there is no reliable market data?
Texas does not generally require sale prices to be publicly disclosed, but Realtors and brokers can access sales data through the MLS. Appraisal districts may also use MLS data, comparable sales, and voluntary disclosures.
Is there published data on $1M-plus tier declines?
No authoritative public dataset separating peak-to-trough movement into $1M to $1.5M, $1.5M to $3M, and $3M-plus tiers across Travis, Williamson, and Hays counties surfaced in the research for this article. Treat any tier-specific decline percentage as unverified until its dataset is named.
Does population growth protect Austin from oversupply?
Population growth does not repeal supply and demand. Austin gained residents through the same period in which sale prices corrected from their 2022 peak and apartment rents fell after a heavy construction cycle. Growth supports aggregate demand without protecting any one tier.
Did the 2025 amendment change what a new buyer owes?
The November 2025 amendment raised the mandatory school-district residence-homestead exemption from $100,000 to $140,000, reducing taxable value once a buyer qualifies. It does not lower market value, apply to every taxing unit, or replace the appraisal cap.
Market data, pricing, and neighborhood details in this post reflect research at the time of publication and are subject to change. Please verify current figures independently.