Austin Mayor Kirk Watson says he’s spreading the word that the key to the present and future of his city’s success is housing supply.
The city has emerged as a shining example of how city reforms can drive affordability, and that’s drawn the attention of other high-growth cities as they seek to address rising housing costs and increasing pressure on infrastructure.
“If [cities] don’t have [housing] the supply, then it impacts affordability, it impacts generational wealth,” Watson said in a fireside chat with Realtor.com® CEO Damian Eales, at the Realtor.com® 2026 SXSW Open House.
Last year at SXSW, Mayor Watson identified housing as one of the key priorities for keeping Austin “weird.” Realtor.com sat down with Mayor Watson to hear more about the ways in which he sees the city hitting those goals and what work is left to be done.
Austin’s changing market
At the height of the pandemic boom, Austin’s market was one of the hottest in the country.
At its peak in May 2022, homes spent a median of 16 days on the market, and the median list price was nearly $630,000, according to data from Realtor.com®.
But three years later, homes now spend a median of 46 days on the market, the median list price has fallen to $525,000, and active listings have ballooned nearly 250%.
“In recent years, the Austin metro housing market has been moving in a distinctly buyer-friendly direction, with prices falling, inventory growing, and the pace of sales slowing,” says Joel Berner, senior economist at Realtor.com.
Importantly, the surge in inventory has also provided essential relief for affordability pressures that last year Watson said threatened the future of the city.
Rents have fallen 10% from their 2022 peak—down from $1625, to $1,460 in 2025. As share of wallet, though, the relief is even bigger. When adjusting for inflation, the difference is over an 18% decline in prices.
Mayor Watson credited the city’s efforts to reduce regulation for bringing down costs.
“Austin was stepping on its own feet,” he said. “We were saying we wanted more supply. We were saying we wanted more affordability, but then we were adding enormous cost—enormous cost to both multifamily and to single family—because we were eating up so much time.”
The first phase of the city’s reforms to permitting saw initial site plan review times drop from a routine 87- to 99-day wait to an average of 32 days—a 56% drop. Follow up review cycles also fell to just under 15 days, nearing the target 14 days, according to an initial report.
“That’s just one example of you take the regulatory part out of it, and you’re going to save money and you’re going to get more building,” Mayor Watson said.
The next chapter of reforms
The Mayor also outlined what he hopes to see come next, particularly as state and federal lawmakers play catch up.
On Thursday, the Senate passed the 21st Century Road to Housing Act—a bill that contains dozens of housing reforms aimed at improving affordability. Watson was quick to highlight the broad, bipartisan support of the bill—which passed in an 89-10 vote—but was less certain of how much it would help in a place like Austin, which has already implemented many of the land use and zoning reforms the bill seeks to impose.
Instead, Watson said he’d like to see more carrot, less stick.
“We need money in order to be able to provide more supply in some instances,” he said. That could come in the form of incentives for adopting supply-side improvements like land use reforms, upzoning, and more.
He says he’d like federal lawmakers to say: “If you do these things, or you have done these things, we will incentivize your doing them, and we will put a gold star on you for having done them by making money available through grants that we then can use in a way to get more more housing on the ground.”
In an exclusive follow-up interview with Realtor.com, Watson also highlighted the difficulty in raising revenue for essential investments in city infrastructure, citing voter skepticism stemming from previous administrations’ lack of fiscal responsibility.
But instead of complaining, he’s listening—one of the most important tools in a mayor’s toolbox, according to Watson—and now, he’s acting.
In early 2026, the Mayor released a draft for a new “decision tree” framework aimed at creating more rigorous protocols for bond elections and providing more transparency for voters.
He also didn’t shy away from the impact that private home listings could be having on Austin’s housing market. These listings never hit the MLS, and are instead shopped on private networks to select buyers. Because Texas is a nondisclosure state, the sale price never becomes public, potentially shielding those properties from increases in property taxes.
“The truth of the matter is that that there’s no question that skews the market,” he said. “It’s succeeding in what its intent is, which is to skew the market for that person, and that makes a difference.”
When asked what Watson was doing to address the problem, he said this is another issue he’d like to see the State Legislature take on, because nondisclosure laws are out of the city’s hands.
“I would say that if the legislature is going to say you’re capped on what the additional revenue can raise, you can only do certain things with your property taxes, then they ought to at least say, we’re going to be clear that you get full value,” he said.
Unintended costs of progress
Speaking broadly, Mayor cast the city’s challenges as a consequence of its success. Nowhere is this best exemplified than by the city’s housing market.
Improved affordability has not come without a cost—especially for those who bought at the peak of Austin’s boom. Today, nearly one in 10 homeowners in Austin has negative equity in their home, according to data from ICE Mortgage Technology—meaning, they owe more on their mortgage than the house is worth.
“The big driver of this underwater mortgage problem is the correction occurring in market prices of homes in Austin over the past 3 years,” says Berner. “People who bought at the top of the market, especially those who did so with small down payments are in danger of owing more on their home than it’s worth.”
“This is a concerning situation to be in, but not one that’s inescapable if the market turns around,” Berner adds.
A key part of that turnaround will be to continue to attracting residents at a rate that the housing stock can sustainably accommodate—something Watson says he’s working hard to do.
