Austin Real Estate Market Analysis – July 2, 2025
"A market entering deep buyer territory with no quick turnaround in sight."
The Austin housing market continues to show unmistakable signs of prolonged correction, with the latest data from Team Price Real Estate painting a clear picture of supply-demand imbalance, buyer leverage, and subdued activity levels across the region. As of today, active residential listings have reached 17,630, marking a significant climb from levels observed just one year ago and only slightly below the record-high of 18,076 set on June 27, 2025. This elevated inventory is not isolated to Austin proper but is reflected across most of the surrounding cities and counties, with Georgetown, Round Rock, and Leander seeing particularly high listing counts.
The pressure on sellers is most evident in the percentage of price reductions. Over 56.8% of all active listings across the Austin area have had at least one price drop, with some cities, such as Lago Vista, Leander, and Georgetown, seeing over 60% of listings experience reductions. The market's willingness—or necessity—to adjust pricing underscores the growing buyer leverage as inventory builds and demand remains soft.
The Activity Index, a leading measure of buyer engagement, is now at 19.6%, down 15.9% from this time last year when it sat at 23.3%. This decline reflects weaker contract activity relative to the total number of active listings, signaling a market where properties are sitting longer, showings are down, and competition among sellers is intensifying. Cities like Hutto, Buda, and Kyle, once competitive hubs of activity, now show Activity Index readings well below the 25% threshold, reinforcing a broad trend of declining buyer urgency.
Perhaps the most telling metric highlighting market imbalance is the New Listing to Pending Ratio. For June 2025, this ratio sits at 0.65, significantly below the 25-year historical average of 0.81. Year-to-date, the ratio is slightly higher at 0.67, yet still far below what would be considered a healthy, balanced market. Put simply, for every 100 new listings hitting the market, only about 67 are going under contract, leaving a growing surplus of unsold inventory month after month.
Months of Inventory, one of the clearest indicators of market conditions, has risen to 6.27 across the region, up nearly 18% from the same time last year. This figure firmly places Austin in buyer market territory, as defined by industry benchmarks that generally consider anything above six months of inventory as advantageous to buyers. Some submarkets, such as Marble Falls, Smithville, and Dale, now report double-digit Months of Inventory, a level not seen since the last major market correction over a decade ago.
Looking at city-level trends, the YoY change in inventory provides further evidence of a widespread market shift. In Marble Falls, Months of Inventory has more than doubled over the past year, surging from 4.98 to 11.0. Similar patterns are seen in Leander, Cedar Creek, and Cedar Park, with inventory swelling 60% to 80% year over year. Even the core Austin market is not immune, where inventory has increased nearly 30% compared to last year.
Buyer activity and transaction volume also continue to decline. Pending listings are down 6.5% year over year, with 4,291 properties currently under contract compared to 4,588 at this point in 2024. Cumulatively, pending sales from January through June sit at 22,830, down 5.7% YoY, though still slightly above the long-term average. The reduction in pending sales, paired with record-high new listing counts—29,525 YTD, a 7.1% increase from last year—has widened the gap between supply and demand, contributing to the current surplus of inventory.
On the pricing front, the market correction remains in full effect. The average sold price now stands at $589,534, down 13.55% from the May 2022 peak of $681,939. The median sold price reflects an even steeper decline, falling 18.20% from $550,000 in May 2022 to $449,900 today. Tracking median prices relative to 36 months prior reveals a 15.91% decline, reinforcing the depth and duration of this market correction.
Perhaps most importantly for those evaluating long-term market trajectories, projections based on Austin's 25-year compound annual appreciation rate of 4.98% suggest it would take approximately 52 months—until September 2029—for the median sold price to return to its previous peak of $550,878, assuming consistent, uninterrupted appreciation from today’s pricing floor. This underscores the structural nature of the current downturn and dispels any notion of a rapid or short-lived market recovery.
The disparity between different price segments further highlights market bifurcation. Over the past year, homes in the bottom 25th percentile have experienced a price decline of 5.66%, while the top 25th percentile has seen modest price growth of 1.25%. However, the price per square foot has declined across both segments, signaling that even higher-end properties are not immune to price pressures when adjusted for size.
Sales density provides additional insight into overall transaction health. The number of sold properties year-to-date totals 14,922, down 6.6% from last year. When adjusted for population growth, the number of sales per 100,000 residents is down 8.8% and remains 20.2% below the long-term average. Similarly, sales per 1,000 Realtors sit 24.4% below the historical norm, pointing to a highly competitive environment among agents and fewer transactional opportunities to go around.
Market health metrics, including the Market Health Index (MHI) and Inventory Stress Index (ISI), paint a stark picture. The MHI currently sits at 17.34%, well below the historical average of 30.9%, indicating diminished transaction volume and absorption rates. Meanwhile, the ISI has dropped to 4.82%, far below its historical average of 12.56%, suggesting limited upward price pressure and reinforcing the buyer-favorable conditions dominating the region.
Taken collectively, the latest data reveals a housing market characterized by excess supply, subdued buyer demand, stagnant pricing, and a long road to recovery. The trajectory toward a more balanced or seller-favorable market appears distant, with most indicators pointing to a multi-year correction cycle already well underway. Prospective buyers are positioned to benefit from favorable conditions, while sellers face increasing competition and pricing pressure.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for July 2, 2025.
