Austin Housing Market Analysis – July 1, 2025
A critical data-driven look at today's market conditions and what they signal for buyers, sellers, and investors across the Austin area.
The Austin housing market continues to face significant headwinds as it navigates through one of the most notable market corrections in recent history. The latest data for July 1, 2025, reinforces this trajectory, offering clear evidence of softening demand, excess inventory, and declining price points—all of which point to prolonged buyer leverage for the foreseeable future.
The most immediate indicator of market health—the number of active residential listings—stands at 17,718. While this reflects a modest drop of 358 listings from the record-high of 18,076 reached on June 27, that decline is purely technical, stemming from a typical surge of expired and withdrawn listings as June closed out. Even with that temporary dip, inventory remains near historic highs, nearly 2,200 listings above the previous 2024 peak of 15,503. Elevated inventory levels of this magnitude are clear confirmation of excess supply in the market, a dynamic that is rarely resolved quickly.
Pricing behavior among active listings further illustrates the current pressure on sellers. Approximately 56.7% of all listings across the MLS have experienced at least one price reduction, with certain suburban areas like Leander, Liberty Hill, and Georgetown exceeding 60%. Even the Austin city limits itself is not immune, with 57.3% of active listings undergoing price cuts. In typical market cycles, this level of widespread price reduction signals a strong buyer's market, where sellers face few viable alternatives but to adjust pricing to attract demand.
The Activity Index, another critical measure of buyer engagement, has fallen to 19.9%, representing a sharp 15.4% year-over-year decline. To put this in context, an Activity Index below 30% generally signals weak buyer urgency, consistent with the elevated inventory backdrop. When fewer than one in five listings are going under contract within 30 days, sellers lose pricing power while buyers gain negotiating leverage.
Months of Inventory, arguably the most telling metric of market balance, currently sits at 6.31 months. This figure marks an 18.4% increase from last year, decisively pushing the market beyond neutral territory and into clear buyer market conditions. Austin proper shows an even more severe trajectory, with Months of Inventory up 34.7% year-to-date. Outlying areas such as Marble Falls, Smithville, and Lago Vista exhibit double-digit Months of Inventory, underscoring localized pockets of extreme oversupply.
The imbalance between new listings and pending sales continues to widen. Cumulative new listings from January through June total 29,525, up 7.1% year-over-year and a striking 31% above the 25-year historical average. Yet pending sales for the same period have declined 5.9% compared to 2024, only slightly above the long-term average. This divergence translates into a cumulative difference of 6,738 more listings than pending contracts, leaving a substantial volume of unsold inventory on the market.
The New Listing to Pending Ratio for 2025 stands at 0.67, far below the 25-year average of 0.81. This ratio highlights how the market is unable to absorb new listings at a sustainable pace, contributing to swelling inventory and diminishing seller confidence. Historical data shows that during stable or appreciating markets, this ratio remains near or above 1.0, as buyer activity keeps pace with new supply.
Sales activity paints an equally sobering picture. Year-to-date closed sales are down 7.4% compared to 2024, despite new listings surging. On a per capita basis, cumulative sales per 100,000 population sit 20.9% below the long-term average, while sales per 1,000 realtors are 25% below average. These figures not only underscore sluggish buyer demand but also signal increased competition among agents for a shrinking pool of transactions.
Price trends reflect the natural consequence of these conditions. The average sold price is $592,530, marking a 13.11% decline from the May 2022 peak. Median sold price is now $449,900, down a staggering 18.20% or roughly $100,000 from the market’s high. Looking at median price performance versus 36 months prior, values remain down nearly 16%, reaffirming the depth of the ongoing correction.
From a long-term perspective, assuming the current median price of $449,900 represents the market bottom, it would take approximately 52 months, or until September 2029, to return to the previous peak of $550,000 based on Austin's historical 4.98% annual compound appreciation rate. This projection offers little solace to recent sellers but provides a valuable reference point for patient long-term buyers and investors.
A deeper look into the high versus low-end market segments reveals further fragmentation. The bottom 25th percentile of home prices has fallen 5.52% over the past year, with price per square foot down 5.05%. In contrast, the top 25th percentile has posted slight gains, with price growth of 2.02% and price per square foot holding steady. This bifurcation reflects how lower-priced properties bear the brunt of market corrections, while higher-end inventory remains relatively insulated—though not immune—from downward pressure.
At the city level, appreciation trends are mixed. Thirteen of Austin's cities show year-over-year price increases, while seventeen report declines. This uneven performance underscores a hyper-localized market where some pockets remain competitive while others struggle with oversupply and softening demand.
Two additional indicators further confirm buyer leverage. The Market Health Index (MHI) is currently at 15.8%, well below the 30% threshold that typically defines a neutral market, and the Inventory Stress Index (ISI) remains low at 3.83%, suggesting ample supply relative to demand. Both metrics reinforce the reality that buyers, not sellers, are currently in control.
The cumulative impact of these factors—excess inventory, declining buyer urgency, widening supply-demand imbalances, price corrections, and weakened market health—clearly signals a prolonged buyer’s market across the Austin area. Sellers face increasing pressure to adjust pricing and expectations, while buyers benefit from greater negotiating power, more choices, and the potential for value purchases—particularly in over-supplied suburban markets.
Looking ahead, the path to market stabilization will likely require either a sustained reduction in new listings, a marked increase in buyer demand, or a combination of both. With mortgage rates, affordability, and macroeconomic conditions still in flux, recovery is not expected in the short term. Market participants should plan accordingly, with buyers advised to leverage current conditions and sellers encouraged to adopt realistic pricing and marketing strategies to compete effectively.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for July 1, 2025.
