Austin Mayor Kirk Watson He says he is spreading the word that the key to the success of his city now and in the future is the construction of houses.
The city has become a prime example of how urban reforms can drive affordability, and that has drawn attention from other booming cities as they seek to deal with rising housing costs and increasing pressure on infrastructure.
“If [cities] they don’t have it [housing] the supply, then it affects the purchase, it affects the wealth that is generated,” said Watson in a fireside interview with the CEO of Realtor.com®. Damian Ealesat Realtor.com® 2026 SXSW Open House.
Last year at SXSW, Mayor Watson identified housing as one of the key factors in keeping Austin “weird.” Realtor.com sat down with Mayor Watson to hear more about how he sees the city achieving those goals and what work remains.
Austin’s changing market
At the height of the epidemic, Austin’s market was one of the hottest in the country.
At its peak in May 2022, homes spent an average 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 an average of 46 days on the market, the median list price has dropped to $525,000, and active listings have increased nearly 250%.
“In recent years, the Austin housing market has been moving in a distinctly buyer-friendly direction, as prices have fallen, inventory has grown, and the pace of sales has slowed,” it said. Joel Bernerchief economist at Realtor.com.
Most importantly, the increase in property value has also provided significant relief from the affordability pressures that last year threatened the city’s future.
Rent is down 10% from the 2022 peak—down from $1,625, to $1,460 in 2025. As a share of the wallet, however, the relief is even greater. When adjusted for inflation, the difference is more than an 18% drop in prices.
Mayor Watson praised the city’s efforts to reduce costs.
“Austin was very independent,” he said. “We said we wanted more coverage. We said we wanted more affordability, but then we added big costs—big costs for multiple families and single families—because we were consuming more time.”
The first phase of the city’s changes in permitting preliminary site plan review times dropped from an 87- to 99-day wait to an average of 32 days—a 56% reduction. Follow-up review cycles also fell to less than 15 days, closer to the 14-day target, according to the initial report.
“That’s one example of you taking some control out of it, and you’re going to save money and you’re going to get more construction,” Mayor Watson said.
The next chapter of changes
The Mayor also outlined what he hopes to see next, especially as state and federal lawmakers play.
On Thursday, the Senate passed the 21st Century Road to Housing Act—a bill that contains a number of housing reforms aimed at improving housing affordability. Watson was quick to highlight the broad, partial support for the bill—which passed by an 89-10 vote—but wasn’t sure how much it would help a place like Austin, which has already made many of the land use and zoning changes the bill seeks to impose.
Instead, Watson said he would like to see more of a carrot, less of a stick.
“We need money to be able to provide many things in other situations,” he said. That may come in the form of incentives to accommodate supply-side improvements such as land-use change, zoning, and so on.
He says he would like government lawmakers to say: “If you do these things, or if you have done these things, we will encourage you to do them, and we will give you a gold star for doing them by making money available through grants that we cannot use in the way of getting more houses down.”
In an exclusive follow-up interview with Realtor.com, Watson also highlighted the difficulty of raising money for critical investments in the city’s infrastructure, citing voter skepticism stemming from previous officials’ lack of funding.
But instead of complaining, he listens—one of the most important tools in a mayor’s toolbox, according to Watson—and now, he leads.
In early 2026, the Mayor released a draft of a new “decision tree” framework aimed at creating stricter rules for bond elections and providing more transparency to voters.
He also didn’t shy away from the impact the foreclosure listings could have on Austin’s housing market. These listings never make it to the MLS, and are instead bought from private networks to select buyers. Because Texas is an unincorporated state, the sale price is never public, potentially protecting those properties from rising property taxes.
“The truth of the matter is that nothing that is asked has ever distorted the market,” he said. “It succeeds in what it aims to do, which is to distort that person’s market, and that makes a difference.”
When asked what Watson is doing to deal with this problem, he said that this is another issue that he would like the State Legislature to address, because the non-disclosure laws are out of the hands of the city.
“I can say that if the Legislature is going to say that you are participating in the fact that additional money can be raised, you can only do certain things with your property tax, they should at least say, we will make it clear that you are getting the full amount,” he said.
Unintended costs of progress
Speaking at length, the Mayor laid out the city’s challenges as a result of its success. Nowhere is this better demonstrated than in the city’s housing market.
Improved affordability hasn’t come without a cost—especially for those who bought at the height of Austin’s boom. Today, nearly 1 in 10 Austin homeowners have poor equity in their home, according to data from ICE Mortgage Technology—meaning, they owe more on their mortgage than the home is worth.
“The main driver of this underwater mortgage crisis is the correction that occurred in the housing market prices in Austin over the last 3 years,” Berner said. “People who bought at the top of the market, especially those who did this with a small amount of money, are at risk of owing more on their houses than they should.”
“This is the situation we have to be in, but it’s not inevitable if the market turns,” added Berner.
A key part of that change will be continuing to attract residents at a rate that housing stock can’t sustain—something Watson says he’s working hard to do.
