Detailed Austin Real Estate Market Analysis – July 4, 2025
Austin’s housing market continues to correct, with inventory swelling, buyer leverage expanding, and price declines deepening. Here’s what the latest data reveals.
The Austin real estate market remains firmly in a correction cycle as the latest data underscores a growing imbalance between supply and demand. With 17,751 active residential listings reported on July 4, 2025, the market is sitting just 325 listings shy of its all-time high set one week prior. This sustained oversupply reflects both elevated seller activity and subdued buyer demand, contributing to deteriorating market fundamentals across the region.
The sheer volume of active listings marks a 14.5% increase compared to July 2024, when inventory peaked at 15,503. This rising inventory is not isolated to a single area but reflects a broad-based expansion across most of the Austin metro and surrounding cities. More concerning for sellers is the percentage of active listings experiencing price reductions. Currently, 57.1% of all active listings have undergone at least one price drop, signaling heightened seller competition and a clear indication that asking prices are exceeding what buyers are willing to pay.
At the city level, areas like Lago Vista, Georgetown, and Round Rock report price reduction rates exceeding 60%, illustrating the widespread nature of price softening. Even traditionally resilient markets such as Austin proper and Cedar Park are seeing more than half of listings undergo price cuts, a far cry from the hyper-competitive market conditions seen just three years ago.
The Activity Index, a leading measure of buyer engagement relative to available inventory, has declined to 19.2%, down from 22.9% a year ago. This 16% drop reflects waning buyer urgency and transactional activity. When coupled with the Months of Inventory figure, currently at 6.31 months—a sharp 18.3% year-over-year increase—the data paints a picture of a market sliding deeper into buyer-favorable territory. It is important to note that by the market’s own definition, inventory levels surpassing 7 months are generally considered indicative of a full buyer's market. With the regional average now exceeding 6 months and several cities, such as Marble Falls, Dale, and Spicewood, reporting double-digit months of inventory, much of the Austin area is either at or approaching buyer’s market conditions.
Supporting this assessment is the New Listing to Pending Ratio, both on a monthly and year-to-date basis. The current monthly ratio sits at 0.67, while the year-to-date figure also matches 0.67, notably below the 25-year historical average of 0.81. Simply put, for every 100 new listings entering the market, only 67 are going under contract—a clear reflection of buyer hesitancy and the oversupply of inventory. The cumulative difference between new listings and pending sales stands at 6,618 so far in 2025, underscoring the market's persistent supply-demand imbalance.
Sales volume is also struggling to keep pace with historical norms. Year-to-date sold properties total 15,009, down 6% from this time last year. While this figure is still 8.6% above the long-term average, much of that surplus is attributable to the rapid population growth Austin experienced over the past decade rather than robust market health. When adjusted for population, the picture is more concerning. Cumulative sales per 100,000 residents sit at 589, down 8.3% year over year and nearly 20% below the long-term average, highlighting that per-capita transactional activity is weakening significantly.
Perhaps most indicative of the correction is the sustained decline in home prices. The median sold price for the Austin area now stands at $445,000, marking a 19.09% decline from the May 2022 market peak of $550,000. The average sold price follows a similar trajectory, currently at $587,332, representing a 13.87% decline from its $681,939 peak. These declines are not isolated to lower-tier homes, though the price compression is most pronounced in the bottom quartile, where median prices are down 5.71% year over year. Interestingly, the top 25th percentile has remained relatively flat, with minimal price erosion, suggesting that higher-end inventory is holding value more effectively, albeit still under downward pressure.
From a long-term perspective, historical appreciation trends suggest that if the current median price of $445,000 represents the market bottom, it would take approximately 55 months—or until December 2029—for prices to recover to the previous peak, assuming the long-term average compound appreciation rate of 4.934% holds steady. This projection underscores the extended nature of real estate recovery cycles following significant corrections and serves as a cautionary reminder to sellers expecting a rapid rebound.
Market health indicators further reinforce the current imbalance. The Market Health Index, which gauges overall market strength, sits at 17.6%, well below the historical average of 30.9%, solidifying buyer leverage. Likewise, the Inventory Stress Index, designed to measure excess supply relative to market absorption, is at 5.02%, significantly lower than the historical average of 12.56%, further pointing to buyer-favorable conditions.
City-specific months of inventory trends offer additional insight. Marble Falls leads the region with 11.0 months of inventory, followed closely by Dale and Spicewood, both at 11.0 months, signaling severely oversupplied local markets. Even the City of Austin itself, long considered the metro's most resilient housing market, has seen inventory rise to 5.62 months, a 7.8% year-over-year increase, pushing it toward neutral territory.
Collectively, the data confirms that Austin’s housing market correction remains underway. Elevated inventory, widespread price reductions, and suppressed buyer activity continue to define the landscape. Recovery to previous price peaks, should they occur, will take years—not months—requiring sellers to recalibrate expectations and buyers to recognize the opportunities presented by expanded leverage.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for July 4, 2025.
