Lakeway Real Estate Market 2026: A Local Agent’s Analysis

The Lakeway real estate market in 2026 is not what it was two years ago. And honestly, that is not a bad thing. If you are a buyer, you have leverage you have not had in years. If you are a seller, you need to hear the truth about what it takes to move a home right now.

I have been working this market since 2009, and I can tell you the current Lakeway market is softer than the surrounding Hill Country areas. That does not mean it is broken. It means it is correcting. Let me walk you through what the numbers actually say, what is happening at the neighborhood level, and what you should do about it whether you are buying or selling.

The Numbers Tell the Story

So lets start with the headline data. As of January 2026, the median home price in Lakeway is sitting around $725,000, up 6.1% year over year. But before you think that sounds strong, look at how homes are actually selling.

The median sale to list price ratio is 92.35%. That means the typical home in Lakeway is selling at about 4% below asking price. Not 2%, not 1%, but 4%. And here is the kicker: 66.67% of listings have dropped their price at some point during their time on market. That is up nearly 6 percentage points from last year.

Days on market have jumped from 86 days last year to 135 days now. That is almost two more months that sellers are waiting for an offer. And sales volume is down. There were 12 homes sold in the most recent 30 day period, down from 23 last year. That is nearly half.

Active inventory is up 7.2% year over year, with 254 homes currently for sale. And 0% of homes sold above list price. Zero.

This is a buyer’s market. Not a balanced market. A buyer’s market.

Why Lakeway is Softer Than Surrounding Areas

Ok, so why is Lakeway feeling more pressure than say, Bee Cave or Dripping Springs? There are a few reasons, and they all compound.

First, Lakeway skews toward higher price points. When you are talking about a $725,000 median, you are dealing with buyers who are much more sensitive to interest rates. At 6.3% rates (where we are hovering in early 2026), the monthly payment on a $725,000 home with 20% down is about $3,560. That is $580,000 financed. Compare that to Dripping Springs, where the median is around $763,000, but new construction is pulling buyers with builder incentives and rate buydowns.

Second, there is aging inventory in some Lakeway neighborhoods. Not all, but some. Homes built in the 1990s and early 2000s are competing with updated inventory in newer communities. Buyers in 2026 want move in ready. They do not want projects.

Third, and this is a big one, new construction in Dripping Springs is pulling buyers away. We are talking about massive new developments like Double L Ranch (2,200 homes planned), Wild Ridge (900 homes), and Big Sky Ranch. These communities offer lower property taxes, newer builds, and amenities that appeal to the same buyer pool that would have considered Lakeway five years ago.

Fourth, interest rate sensitivity at higher price points. When rates were at 3%, a $700,000 home was accessible to a wider pool of buyers. At 6.3%, fewer buyers qualify, and those who do are more cautious about pulling the trigger.

Neighborhood Level Analysis

Not all Lakeway neighborhoods are performing the same. Some are holding value. Some are correcting hard. Let me break down what I am seeing.

Waterfront vs Non-Waterfront

Waterfront homes are still commanding premium prices, but they are not moving fast. There are currently 26 waterfront homes for sale in Lakeway at a median listing price of $749,000. Most waterfront homes are staying on the market for 121 days. That is four months.

But here is the thing. Waterfront on Lake Travis has historically been recession resistant. These properties appreciate steadily regardless of the broader economy. If you have been waiting for an opportunity to buy waterfront, this is it. Sellers are motivated, and you have negotiating power.

Non waterfront homes in Lakeway start in the low $400,000s and go up to the millions. The middle of the market (the $600,000 to $900,000 range) is where you see the most inventory and the most price reductions.

Old Lakeway vs New Developments

Old Lakeway (the original neighborhoods built in the 1970s through 1990s) is seeing slower sales unless the home has been significantly updated. Buyers want granite, open floor plans, and modern finishes. If your home still has carpet in the living room and tile countertops, you are going to sit.

Newer developments like Rough Hollow, Sweetwater, and Lakeway Highlands are performing better, but even these are not immune to the broader market softness. Homes in these communities are still taking 90 to 120 days to sell, and sellers are negotiating more than they have in years.

Which Neighborhoods Are Holding Value

The neighborhoods that are holding value best are the ones with strong HOAs, well maintained common areas, and proximity to the lake or Hill Country views. Think The Homestead, parts of Rough Hollow with lake access, and Sweetwater.

The neighborhoods that are correcting harder are the ones with older inventory, no HOA (which can mean inconsistent upkeep), and no distinguishing features. If your neighborhood looks like every other subdivision in Central Texas, you are competing on price.

The Condo and Townhome Market

Condos and townhomes in Lakeway are a different animal. There are currently 64 condos for sale at a median listing price of $510,000. That is significantly lower than the single family median of $725,000.

But here is the catch. Condo inventory is up, and these properties are sitting even longer than single family homes. Days on market for condos is tracking similar to single family, around 120 to 135 days.

The average going price for condos is $812,694, which tells you there is a wide range. You have affordable condos in the $300,000s and luxury condos pushing over $1 million.

If you are a buyer looking for a lower barrier to entry into Lakeway, condos are worth a look. Just make sure you understand the HOA fees (some are $400+ per month) and what is covered. And make sure you get a copy of the HOA financials and meeting minutes before you close. I have seen too many buyers get surprised by special assessments.

Where the Best Deals Are Right Now

So if you are a buyer, where should you be looking? Here is what I tell my clients.

First, look for homes that have been on the market for 90+ days. These sellers are motivated. They have already dropped the price at least once, and they are likely open to further negotiation.

Second, look for homes that are priced 5 to 10% below recent comps. These sellers get it. They understand the market. And they want to move.

Third, focus on neighborhoods with strong fundamentals but aging inventory. If you are willing to do some cosmetic updates (paint, flooring, countertops), you can buy a home in a great location at a discount and force appreciation through improvements.

Fourth, do not overlook homes in Lakeway that are priced just below the median. The $650,000 to $700,000 range is where you will find the most motivated sellers and the most room to negotiate.

And fifth, if you have been dreaming of waterfront, now is the time. Waterfront inventory is up, days on market are extended, and sellers are negotiating. You might not get a steal, but you will get a fair deal, and that is more than you could say two years ago.

Seller Reality: What It Takes to Move a Home in 2026

Now, if you are a seller, I am not going to sugarcoat this. The market is not what it was in 2021 or 2022. You are not going to list your home on Thursday and have five offers by Monday. Those days are over.

Here is what it takes to sell in Lakeway in 2026.

First, price it right from day one. I cannot stress this enough. If you overprice your home, you will sit. And the longer you sit, the more buyers assume something is wrong with the property. The homes that are selling in 30 to 60 days are the ones priced at or slightly below market from the start.

Second, make your home move in ready. Stage it. Declutter it. Repaint the walls if they are not neutral. Replace the carpet if it is worn. Fix the little things that buyers will notice during the showing. You are competing with 254 other homes in Lakeway. You need to stand out.

Third, be flexible on terms. If a buyer asks for a home warranty or a closing cost credit, consider it. If they want a longer due diligence period because they are relocating from out of state, work with them. The sellers who are getting deals done are the ones who are willing to negotiate.

Fourth, work with an agent who knows the Lakeway market. I am not saying that because I am an agent. I am saying it because the data shows that homes listed by experienced local agents sell faster and for more money than FSBOs or agents who do not specialize in the area. You need someone who knows which comps to use, how to position your home, and how to navigate multiple offer scenarios (yes, they still happen, just not on every listing).

Ed’s 12 Month Outlook for Lakeway

So where is the Lakeway market headed over the next 12 months? Here is my take.

I think we are going to see continued softness through Q2 2026. Inventory will stay elevated, days on market will stay long, and price reductions will remain common. But I do not think we are going to see a crash. The Austin metro median is down 3.3% year over year, and most analysts expect another 1 to 3% decline before stabilization.

Mortgage rates are forecast to end 2026 around 5.9%. If that happens, you will see buyer demand pick up in Q3 and Q4. Not to 2021 levels, but to a healthier, more sustainable level of activity.

The broader Austin market is expected to hit bottom sometime during the second half of 2026. Once that happens, I think you will see Lakeway stabilize and start appreciating again. But the appreciation will be modest. We are talking 2 to 3% annually, not 10 to 15%.

The neighborhoods that will recover first are the ones with strong fundamentals: good schools, lake access, low property taxes, and well maintained infrastructure. The neighborhoods that will lag are the ones with aging inventory and no distinguishing features.

If you are a buyer, I would tell you this: buy in the next six months. You have negotiating power right now that you will not have in 12 months. Lock in a fair price, lock in a rate in the low 6s, and ride out the next few years. Real estate is a long game.

If you are a seller, I would tell you this: be realistic. If you need to sell, price it right and make it move in ready. If you do not need to sell, wait until Q4 2026 or early 2027 when rates drop further and buyer demand picks up.

Specific Advice for Buyers and Sellers

For Buyers

Get pre approved before you start looking. Sellers want to see proof of funds or a pre approval letter with every offer.

Do not wait for rates to drop to 5%. By the time rates hit 5%, prices will have recovered, and you will have lost your negotiating power. Buy now while you have leverage.

Hire a buyer’s agent who specializes in Lakeway. Someone who knows which neighborhoods have the best resale value, which builders to avoid, and which inspection issues are deal breakers vs cosmetic fixes.

Consider a move to Lakeway if you are relocating from out of state. The quality of life, the schools, and the Hill Country lifestyle are hard to beat. And right now, you can negotiate terms you could not negotiate two years ago.

For Sellers

Interview three agents before you list. Ask them how many homes they have sold in Lakeway in the last 12 months. Ask them what their average days on market is. Ask them how they plan to position your home in a soft market.

Do not chase the market down. Price it right from day one. If you price it $50,000 too high and then drop it $10,000 every two weeks, you will end up selling for less than if you had priced it correctly from the start.

Stage your home. I know it is an extra expense. But staged homes sell faster and for more money. That is not an opinion. That is data.

Be prepared to negotiate. The days of “take it or leave it” are over. Work with your buyers. Be flexible on closing dates, repairs, and credits. The sellers who are getting deals done are the ones who are willing to work with buyers.

Final Thoughts

The Lakeway real estate market in 2026 is a correction, not a collapse. Prices are softening, inventory is up, and days on market are extended. But the fundamentals are still strong. Lakeway is still one of the most desirable places to live in Central Texas. The schools are excellent. The lake is a huge draw. And the Hill Country lifestyle is unmatched.

If you are a buyer, you have an opportunity right now that you have not had in years. Take advantage of it.

If you are a seller, adjust your expectations and price your home competitively. The market will recover, but it is going to take time.

I have been working the Lakeway market since 2009. I have seen ups and downs. This is a down. But it is also a healthy correction that is bringing the market back to normalcy. And normalcy is a good thing for long term stability and affordability.

Want to discuss your specific situation? Reach out to Ed Neuhaus for a personalized market analysis and strategy session. I have helped buyers and sellers navigate every market cycle, and I can help you too.