Austin Real Estate Market Update – June 4, 2025

Austin Real Estate Market Update – June 04, 2025

Austin Housing Market in Correction: Inventory Builds, Prices Fall, Buyer Demand Lags

The June 4, 2025 edition of the Austin Daily Real Estate Briefing by Team Price Real Estate reveals a market that is still firmly in correction mode reflecting a softening market with rising inventory, declining prices, and a persistent imbalance between new listings and buyer demand. Below is a detailed report analyzing the current conditions.

As of June 4, 2025, there are 17,163 active residential listings across the Austin area, slightly down from the recent peak of 17,337 on May 26, 2025. This still places the market near historic highs. For context, the prior peak in July 2024 was 15,503 active listings. This elevated inventory level is a critical indicator of ongoing market imbalance. Additionally, 53.0% of all active listings have undergone price reductions, showing a continued pattern of seller concession in response to tepid demand. This metric indicates pricing weakness, especially as only 2.3% of listings have seen price increases.

The Activity Index, which measures pending listings as a percentage of active plus pending inventory, currently stands at 21.6%. This is down from 25.2% one year ago, marking a -14.5% year-over-year decline in market absorption. A healthy, balanced market typically sees an Activity Index closer to 35% or higher, so this figure suggests ongoing buyer hesitation and elevated days on market. The current Months of Inventory (MOI) is 6.11, up 21.0% from 5.05 at this time last year. The MOI figure is crucial as it reflects the time it would take to sell the current inventory at the current pace of sales. An MOI above 6.0 typically signals a buyer’s market, and Austin has officially crossed that threshold.

From January through May 2025, the market has seen 24,986 new listings, which is 35.6% above the 25-year historical average for this period. This surge represents an 8.5% increase year-over-year. However, pending sales are not keeping pace. There have been 19,015 pending listings so far in 2025—6.1% above average historically, but -6.7% below last year’s levels. The disparity between new listings and pending sales is stark: a cumulative gap of 5,971 listings year-to-date, the widest margin since 2004 when the difference peaked at 6,565. This imbalance is a strong signal of excess supply in the system and further downward pressure on pricing.

The New Listing to Pending Ratio for the month is 0.58, meaning that for every 100 new listings, only 58 go under contract. For the year to date, the ratio is 0.66. By comparison, the 25-year average is 0.81, which underscores how far today’s market is deviating from historical norms. Ratios below 0.70 suggest an expanding inventory environment and declining market velocity. Simply put, the market is building more supply than it can absorb.

This trend is further confirmed by sales density metrics. Only 2,895 properties were sold in May 2025. Year-to-date, 11,942 homes have sold—a figure that is 9.6% above the long-term average, but down -9.0% from 2024. Adjusted for population, cumulative sales per 100,000 residents are 18.9% below average. Realtor productivity is also declining, with 642 sales per 1,000 agents—a 23.6% drop from historical norms. This erosion in agent productivity reflects both increased competition and reduced overall buyer activity.

Price trends continue to reflect the effects of this market softness. The average sold price in May 2025 was $593,142, down -13.02% from the May 2022 peak of $681,939—a loss of $88,797. The median sold price is currently $450,000, which is down -18.18% from its May 2022 high of $550,000—a $100,000 loss. These figures highlight the depth of the correction underway, particularly when considered in real (inflation-adjusted) terms.

Tracking market pricing against the 36-month prior period also confirms the extent of the correction. The median price is now -18.18% lower than it was three years ago. If we assume this $450,000 median is the market bottom and apply the historical compound appreciation rate of 4.981%, the market would not return to its peak of $551,386 until approximately August 2029—52 months from now. This estimate assumes no further depreciation and reflects a long recovery horizon.

From a segmental standpoint, the lower quartile of the market (bottom 25th percentile) saw a -3.2% year-over-year decline in median price and a -3.6% drop in price per square foot. The upper quartile (top 25th percentile) showed slightly more resilience, with a -1.6% median price decline and a -2.8% price per foot drop. This suggests that the more affordable segments are under greater pressure, likely due to higher interest rates disproportionately affecting entry-level buyers.

Geographically, the trend is also uneven. Of the 30 cities tracked, only 11 have seen year-over-year appreciation in median price, 18 have experienced declines, and one (Jarrell) is unchanged. This indicates that price correction is widespread across the region.

Two proprietary indicators—Market Health Index (MHI) and Inventory Stress Index (ISI)—provide additional confirmation of market softness. The MHI is currently 19.3%, well below the 30% threshold that indicates a seller’s market. The ISI stands at 6.3%, with values under 10% suggesting buyer leverage due to inventory oversupply. Both indicators affirm that Austin is operating in a clear buyer's market.

In conclusion, the June 2025 Austin housing market reflects a region still undergoing a structural correction. Supply continues to outpace demand, price reductions are widespread, and pending sales are not keeping pace with listings. Although sales volumes are modestly above long-term averages, they are declining year-over-year and are underperforming relative to population and agent headcount. Prices are down significantly from their 2022 peaks, and based on current appreciation trajectories, a return to those highs may not occur until late 2029. These conditions collectively paint a picture of a market still searching for equilibrium—defined by high inventory, slow absorption, declining prices, and diminished buyer urgency. For agents, brokers, and clients alike, this is a market that demands strategic pricing, detailed market knowledge, and a sober assessment of supply-demand fundamentals.

Embedded PDF: Austin Daily Real Estate Briefing for June 04, 2025 — includes updated statistics on inventory, pricing, buyer demand, and market trends across the Austin area.

Austin Real Estate Market – Frequently Asked Questions (June 4, 2025)

1. What is the current state of the Austin real estate market as of June 2025?

The Austin real estate market as of June 4, 2025, is firmly in correction territory. Active residential listings have reached 17,163, just 174 below the all-time high of 17,337 recorded on May 26, 2025. More than 53% of listings have seen price reductions, while only 2.3% show price increases. The Activity Index, which measures market absorption, is at 21.6%, down from 25.2% one year ago. Months of Inventory has climbed to 6.11, a 21.0% year-over-year increase. These indicators collectively point to a buyer’s market, with supply significantly outpacing demand and sellers adjusting pricing expectations to meet current market conditions.

2. How much have Austin home prices declined from their peak?

Home prices in Austin have experienced a substantial decline since their peak in May 2022. The average sold price has dropped from $681,939 to $593,142—a decrease of 13.02% or nearly $89,000. The median sold price has seen an even sharper decline, falling from $550,000 to $450,000, representing an 18.18% drop or $100,000. This decline has occurred over a three-year correction and reflects both reduced buyer demand and elevated inventory. Price declines are evident across the market, with both the top and bottom quartiles showing negative trends in price per square foot.

3. How does the current inventory compare to historical norms in the Austin housing market?

Inventory in the Austin housing market is significantly above historical norms. Year-to-date from January through May 2025, there have been 24,986 new listings—35.6% above the 25-year average for this period and 8.5% higher than the same time last year. In contrast, pending sales during the same period total 19,015, which is only 6.1% above the historical average and 6.7% below 2024. This imbalance has resulted in a 5,971-unit surplus, the largest year-to-date listing gap since 2004. The New Listing to Pending Ratio for May stands at 0.58, and the year-to-date figure is 0.66—well below the 25-year average of 0.81, confirming a sustained buildup of unsold inventory.

4. What is the market forecast for Austin home prices based on historical appreciation?

Assuming the current median sold price of $450,000 marks the bottom of the market correction, future projections based on the 25-year compound annual appreciation rate of 4.981% suggest that the market would need approximately 52 months—until August 2029—to return to the previous peak value of $551,386. This forecast reflects a gradual recovery trajectory assuming stable economic conditions, no additional price declines, and a return to typical appreciation patterns. It emphasizes the long-term nature of the correction and the need for strategic positioning by both buyers and sellers in the current climate.

5. Are all segments of the Austin market declining equally, or are some areas faring better?

The correction is widespread but not uniform across all price segments and locations. In the bottom 25th percentile of the market, prices have declined by 3.2% year-over-year, with price per square foot down 3.6%. In the top 25th percentile, prices have declined by 1.6% and price per square foot by 2.8%. This indicates that more affordable properties are experiencing greater pricing pressure. Additionally, of the 30 tracked cities in the Austin area, only 11 have shown year-over-year appreciation in median sold price, while 18 have declined and one has remained flat. These disparities underscore the importance of hyper-local market analysis when evaluating opportunities in Austin real estate.

Have More Questions About the Austin Housing Market? Team Price Real Estate tracks the Austin market daily and publishes the most comprehensive, up-to-date real estate data available. If you have questions about specific neighborhoods, property values, or market timing, we’re here to help. Reach out to us directly—we’re happy to walk you through the numbers and what they mean for your situation.

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