Austin Housing Market 2025: A Deepening Correction with Clear Buyer Advantage
The Austin housing market continues to move decisively through its correction cycle, with July 3, 2025, data reinforcing what has become a consistent and undeniable trend. The latest numbers point to elevated inventory, widespread price reductions, subdued buyer activity, and weakened pricing power for sellers. From a real estate analyst’s perspective, these are hallmarks of a market where leverage has fully transitioned to buyers—and where a protracted recovery cycle remains the most likely trajectory.
Active residential listings across the Austin area now stand at 17,679, marking only a slight decline of 397 properties from the record high set on June 27, 2025, when inventory briefly touched 18,076. This marginal dip is insignificant within the broader context, as active listings remain at historic highs, and more than half—56.9%—of all listings have recorded at least one price drop. This figure reflects deep seller concessions and is a visible symptom of supply outpacing demand.
The Activity Index, a reliable gauge of market demand, currently sits at 19.4%, representing a sharp 15.4% year-over-year decline from 22.9% at the same point in 2024. Historically, the Austin market maintained an Activity Index well into the 30% to 40% range during its peak years. The present reading, paired with 6.28 Months of Inventory, underscores that buyer leverage has become structurally embedded, not merely a short-term fluctuation.
Examining the year-to-date figures provides even clearer confirmation of the market's ongoing rebalancing. From January through June 2025, cumulative new listings totaled 29,525—a 7.1% increase over 2024 and a staggering 31% above the 25-year average. This influx of new inventory, however, has not been matched by buyer absorption. Pending listings for the same period reached only 22,871, reflecting a 5.6% year-over-year decline, albeit still 4.5% above the long-term average. The net effect is a widening supply-demand gap, now quantified by a cumulative difference of 6,654 more new listings than pending sales.
Perhaps most concerning for sellers—and telling for market analysts—is the New Listing to Pending Ratio, which remains deeply depressed. The year-to-date ratio stands at 0.67, well below the 25-year average of 0.81. On a monthly basis, the ratio holds at 0.66, reinforcing that the market is experiencing sustained under-absorption relative to historical norms.
The Months of Inventory metric adds further clarity. Compared to July 2024, when inventory stood at 5.32 months, today's 6.28 months reflects an 18.2% increase. Year-to-date, the Months of Inventory figure is up nearly 29% compared to 2024. This trend, combined with lagging pending sales, continues to push Austin into clear buyer's market territory, a sharp contrast to the highly competitive conditions seen just a few years prior.
Sales velocity and pricing data confirm the depth of the correction. Total sold properties for June stood at 2,776, with year-to-date sales at 14,981—down 6.2% year-over-year, but still 8.4% above the long-term average. However, when viewed through the lens of population growth and agent count, the weakness becomes more apparent. Year-to-date cumulative sold properties per 100,000 residents is down 8.4% year-over-year and sits nearly 20% below the long-term average. Likewise, cumulative sold properties per 1,000 Realtors is down 2.3% from 2024 and remains a significant 24.1% below historical norms, signaling fewer sales opportunities per agent in an oversupplied market.
Home prices continue their downward trajectory, providing buyers with increased negotiating power. The average sold price across the Austin area now stands at $587,763, representing a 13.81% decline from the market's peak in May 2022, when the average price reached $681,939. The median sold price has fallen even more sharply, now resting at $445,000—a 19.09% drop, or $105,000 below the May 2022 peak of $550,000.
When tracking the median sold price against figures from 36 months prior, the market shows a negative 16.82% differential. This statistic reinforces the reality that, for most homeowners who purchased during the 2021 to 2022 peak cycle, current property values remain significantly underwater on an inflation-adjusted basis.
From a longer-term perspective, Austin’s 25-year compound real estate appreciation rate stands at 4.934%. Applying this historical growth rate to current market conditions suggests that, even if the market has indeed found its bottom at a $445,000 median price, it would take approximately 55 months—or until December 2029—to return to the previous peak of $550,342. This timeline underscores the structural nature of the correction and dispels any notion of a short-term rebound.
A deeper dive into price segmentation reveals further evidence of market bifurcation. The bottom 25th percentile of homes saw a 5.52% decline in price and a 4.91% decline in price per square foot year-over-year. In contrast, the top 25th percentile experienced a much more modest 0.39% price decline and a 0.52% decline in price per square foot. This suggests that entry-level and more affordable segments are bearing the brunt of price corrections, while higher-end properties have shown relative resilience.
City-level appreciation data mirrors this fragmented picture. Of the 30 tracked cities in the Austin area, 13 have recorded positive year-over-year median price appreciation, while 17 have seen declines. This patchwork of market conditions further illustrates that while the overall trend favors buyers, pockets of relative strength remain.
Two additional indicators cement the buyer-advantaged narrative. The Market Health Index (MHI) currently reads 17.6%. Historically, an MHI below 30% signals a definitive buyer's market, and today’s figure is well below that threshold. Similarly, the Inventory Stress Index (ISI) sits at 5.02%, with readings below 10% indicating inventory levels favor buyers. Combined, these metrics reflect market conditions that are highly favorable for buyers and increasingly challenging for sellers, particularly those who purchased at or near peak valuations.
In sum, the Austin housing market remains entrenched in a broad correction cycle. Elevated inventory, subdued demand, price declines, and weakening sales efficiency all point to a structural rebalancing unlikely to reverse course in the near term. While sellers face headwinds, buyers benefit from increased selection, negotiating leverage, and softened pricing. However, the recovery timeline—potentially stretching to the end of the decade—suggests that both buyers and sellers must adopt a long-term, data-driven perspective when navigating this market.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for July 3, 2025.
