Price Drops Surge Across Austin Housing Market in May 2025

Austin Real Estate Sees Widespread Price Drops Across MLS in May 2025

Across the Austin-area housing market, sellers are increasingly reducing asking prices to attract buyers. As of mid-May 2025, over half of all active residential listings in the MLS—50.1%—have had at least one price drop. This shift comes as inventory continues to climb, with 16,577 active listings and Months of Inventory reaching 5.91, suggesting a market that favors buyers.

The City of Austin has 5,257 active listings, and 51% of them have experienced price reductions. This trend is not limited to Austin proper. In the surrounding suburbs and fast-growing communities, even higher rates of price drops are being observed. Liberty Hill, for example, has seen price drops in 57.3% of its listings. Lago Vista shows an even steeper trend, with 58.1% of properties reducing their prices. Jarrell leads the region with a staggering 60.9% of listings marked down, while Manchaca tops the chart with 78.9% of listings showing price cuts.

Other notable cities with high levels of price reductions include San Marcos at 56.6%, Elgin at 55.4%, Driftwood at 55.3%, and Kyle at 51.9%. These figures reflect broader market conditions, where buyers are less willing to meet initial asking prices, especially in areas with a large amount of new construction or rapid inventory growth. Even high-demand areas such as Leander and Round Rock have over half of their listings seeing price adjustments—52.8% and 51.5% respectively.

At the same time, only 2.7% of active listings across the MLS have increased in price, while 47.2% have remained unchanged. This indicates that most sellers are either holding firm or being forced to drop prices, while very few are finding enough leverage to raise them. In Liberty Hill, Jarrell, and Kyle, the percentage of listings with price increases barely reaches double digits, further confirming the current pricing pressure.

From a market behavior standpoint, this level of discounting signals a market adjusting to demand-side limitations. As affordability remains a concern and interest rates continue to influence buyer activity, sellers who hope to move their property must be more flexible with pricing. With the Activity Index sitting at 23.4%, it’s clear that buyer engagement remains soft, reinforcing the need for competitive pricing.

As more homes sit on the market and active inventory grows, the prevalence of price reductions may continue to rise. This dynamic presents opportunities for buyers, while challenging sellers to reassess their pricing strategies. For now, the data paints a clear picture: price reductions are not just common—they are becoming the norm in the Austin housing market. 

What percentage of homes in Austin have dropped their prices in May 2025?

In May 2025, approximately 51% of active listings in the City of Austin have had at least one price drop. This reflects increasing seller flexibility amid higher inventory and slower buyer activity.

Which areas near Austin are seeing the most price reductions?

Manchaca leads with 78.9% of listings showing price drops, followed by Jarrell at 60.9%, Manor at 60.2%, and Lago Vista at 58.1%. These suburban and exurban markets are seeing the sharpest adjustments.

What does a high percentage of price drops indicate about the housing market?

A high volume of price reductions usually points to a cooling market where supply outpaces demand. It can signal that sellers initially priced too high or that buyers are less willing to meet those prices due to affordability or economic conditions.