The market for condos in once-bustling downtown Austin, Texas, is brutal, explained Compass real estate agent Ross Melby.
"No pulse at all," he told Homes.com.
In a new building called The Linden, where the smallest condos are priced at more than $1 million, Melby listed a one-bedroom unit with sunset and Texas Capitol views for $899,000. But it barely had three showings in two months. Even after he lowered the price to $849,500, prospective buyers balked, and the lack of urgency frustrated his investor client, who wanted to sell immediately.
So Melby devised a plan for an expedited sale — sort of an auction, but without an auctioneer.
With his client's permission, he reduced the price to $595,000, well below market value, and gave buyers 10 days to make offers. The first four days, he heard crickets or silence, he said. But by the end of the specified period, he had four offers, and last month, the owner accepted an all-cash deal for $834,000, within the range the client had been hoping for all along.
"I don't know if this was an anomaly or the way to sell real estate going forward," Melby said.
Buyers have leverage
The Austin Board of Realtors declined to comment on the strategy. However, as listings flood the market and buyers gain leverage across much of the country, agents would do well to launch expedited sales, according to Terry Story, a longtime agent for Keller Williams Realty Services in South Florida.
Story said the only reason more transactions aren't structured this way is seller reluctance, though more agents need to counsel their clients on the benefits of a fast sales strategy.
"I tell everyone: In order to sell in a market like this, you have to be in the bottom 20% of pricing and in the top 20% of beauty," she told Homes.com. "When it's priced low, you're getting all eyeballs on it, and those interested will bid it up, always."
While Austin, home to the University of Texas, was once one of the hottest housing markets in the country, it's not as strong now as it was just after the pandemic, according to Danny Khalil and Itziar Aguirre, Texas market analysts for Homes.com.
"Austin still is one of the most popular destinations for domestic migration in the country, but it also featured one of the biggest run-ups in pricing during the early part of the decade," Khalil said in an email. "This is part of a broader trend of normalization, as some of the housing markets seeing price growth right now were not the hot markets of the pandemic years."
In July, Austin property listings rose more than 19% compared to a year earlier, pushing down the median sale price 4.2% from July 2024, according to Homes.com data. Only San Antonio, Texas, had a larger decline among the 40 largest U.S. housing markets.
Overbuilding hurts Austin
Relatively high mortgage rates and overdevelopment have been major factors in the cooling of Austin home sales, noted Ken Johnson, the Walker Family Chair of Real Estate at the University of Mississippi, in an email to Homes.com.
"Until Austin works through its supply issues relative to demand, the market will remain on its steady downward path," he said.
In deciding to use an auction technique, Melby said he wanted to be completely transparent. He mentioned in the listing that the 1,192-square-foot unit was priced below market and outlined how the process would proceed. His client could accept an offer at any time but was under no obligation to accept any at all, Melby said.
The eventual buyers lost out on another condo and turned their attention to Melby's listing in The Linden, according to their real estate agent, Kelton Finley of Douglas Elliman.
The Linden, with 117 units, opened last year. It's about two miles from Darrell K Royal-Texas Memorial Stadium, an important consideration for his clients, big fans of UT football who wanted a second home when they come in for games, Kelton said.
The Longhorns are the nation's top-ranked team, according to the Associated Press preseason Top 25 rankings.
Would-be buyers apply pressure
Finley warned his buyers beforehand that this sale would be unlike most others, and they didn't mind, he said.
"It just worked," Finley told Homes.com. "Sometimes it doesn't work. There's no doubt it was a good deal."
Finley declined to identify his clients. Texas is a non-disclosure state, so sellers' names are not listed on public records.
During the 10-day offer period, Melby said, buyers with quintessential Texas drawls tried to pressure him into selling the condo to them for $595,000 on the spot.
"I told them, 'I appreciate it, but you are welcome to submit an offer,'" Melby recalled. "It was never going to sell for that amount."
Melby said he was fortunate his client trusted him to sell the condo how he saw fit. He just picked up another downtown Austin condo listing in which the seller wants to use an expedited sale.
"We all won," Melby said. "I think it's pretty great in today's world."
