The Central Austin Real Estate Forecast: Why Tarrytown, Pemberton Heights, and 78704 are Decoupling from the National Narrative
The Modern Market Dilemma If you’ve been reading the national headlines lately, you might think the sky is falling on the housing market. “Sales Down,” “Inventory Up,” and “Prices Slashing” are the clickbait of the day. But for those of us who live, work, and invest in Central Austin—from the historic estates of Pemberton Heights to the modern masterpieces in Zilker—the reality on the ground is far more nuanced.
As we move through the final quarter of 2025 and look toward 2026, Central Austin is proving to be an island of resilience. While the broader Austin-Round Rock MSA has seen a necessary price correction of nearly 18% from the 2022 peak, the "Inner Circle" of Austin neighborhoods is playing by a different set of rules.
The Neighborhood Breakdown: A Tale of Two Coasts (of Lady Bird Lake)
1. The West Side Aristocracy: Tarrytown & Pemberton Heights In Tarrytown and Pemberton Heights, the market isn't just about housing; it's about heritage and scarcity. We are seeing a "flight to quality." Buyers in these areas are less sensitive to interest rate fluctuations and more focused on long-term asset preservation.
Currently, updated 3-4 bedroom homes in Tarrytown are commanding anywhere from $1.8M to over $8M. Pemberton Heights remains the pinnacle of Austin prestige, where classic estates that have been meticulously modernized are rarely hitting the public MLS. Instead, they are moving through private networks—a trend that reinforces why having a hyper-local broker is no longer optional; it’s essential.
2. The South Austin Creative Class: Zilker, Bouldin Creek, and Travis Heights South of the lake, the vibe is different, but the demand is just as fierce. Bouldin Creek and Zilker have become the epicenter of "Modern Austin Luxury." We are seeing significant new construction, such as the One Oak development and boutique builds by Joseph Design Build, which are setting new price-per-square-foot records for the 78704 zip code.
While the "Keep Austin Weird" soul remains, the real estate has gone sophisticated. The inventory in Bouldin Creek has reached a balanced state with about 5 months of supply, giving buyers more room to negotiate than they had three years ago, but the "Hot Home" phenomenon—where a perfectly staged, modern-organic home sells in under 10 days—is still very much alive.
3. The Quiet Luxury: Highland Park West & Balcones Park For those seeking more acreage and mid-century modern bones, Highland Park West and Balcones Park are the current "value plays" of Central Austin. You get the proximity to MoPac and downtown with the added benefit of larger lots and established tree canopies. These neighborhoods have seen a steady 2-4% year-over-year appreciation, avoiding the volatile "pump and dump" cycles seen in the outer suburbs.
Why Inventory is Your Secret Weapon in 2025 For the first time in years, Central Austin buyers actually have options. Active listings in Travis County have climbed to their highest levels since 2022.
What does this mean for you?
For Buyers: You can finally keep your inspection contingencies. You can ask for repairs. You can even negotiate seller concessions or mortgage rate buydowns. The "Take it or Leave it" era of 2021 is officially dead.
For Sellers: Presentation is everything. In a market with 5.7 months of inventory, "average" homes sit. High-end finishes, professional staging, and aggressive pricing strategies are the only ways to win.
The Economic Engine: Beyond Tech Critics point to the tech slowdown as a reason to worry about Austin. However, the diversification of our local economy—with the expansion of the MD Anderson medical complex, the I-35 Capital Express project, and Austin-Bergstrom’s massive growth—provides a floor for property values. High earners are still moving here, but they are more discerning. They want "turnkey."
Conclusion: The Authority Perspective The Central Austin real estate market in 2025 is a "Show Me" market. Buyers want to be shown value, and sellers need to show excellence. Whether you are eyeing a renovated bungalow in Brykerwoods or a waterfront estate on Lake Austin, the window of opportunity is widening. Prices have stabilized, inventory is healthy, and the long-term appreciation of Central Austin remains one of the safest bets in American real estate.