Austin’s market is now operating under full buyer conditions—inventory is swelling, prices continue to reset, and demand is losing steam.

Today’s data from the Austin-area MLS offers yet another confirmation: this is not a short-term lull. This is a long-term rebalancing. Active residential listings remain near peak territory at 17,516 homes on market, just 630 listings shy of the all-time high set in late June. What’s more telling is that nearly 60% of these homes—59.2%—have experienced at least one price reduction, a signal that seller expectations are still adjusting to the realities of decreased buyer urgency.

While the volume of new listings this year has been strong—33,990 year-to-date, which is 7.7% higher than 2024 and 28.2% above the 25-year average—buyer follow-through is lagging. Cumulative pending sales from January through July total just 27,321, down 2.2% year-over-year. The New Listing to Pending Ratio for the year now sits at 0.69, well below the 25-year average of 0.82, confirming that for every 100 homes listed, fewer are making it to contract than in historical norms.

The Activity Index, which measures active-to-pending transitions as a percentage of the market, is sitting at a subdued 19.5%. That’s nearly 10% below last year’s already cooling pace of 21.7%. It’s also worth noting that new construction activity makes up a disproportionate share of current pendings at 27.10%, compared to just 16.74% for resale properties. Builders continue to be the primary engine behind absorption, largely due to aggressive incentives and more flexible negotiation environments.

Months of Inventory has risen sharply from 5.34 in August 2024 to 6.24 today, marking a 16.9% year-over-year increase. The absorption rate—or Sold-to-Active Ratio—is now 15.82%, well below the historical average of 31.87%. A sustained drop of this magnitude is a clear indicator that supply is outpacing demand, and it aligns with a Market Flow Score of 4.18—on a scale where anything below 5 indicates a market moving increasingly in favor of buyers.

Median and average prices remain in correction territory. The average sold price now sits at $575,468, down from the May 2022 peak of $681,939—a decline of $106,471 or 15.61%. The median sold price has fallen even more significantly, from $550,000 to $435,000, representing a 20.91% drop. Price erosion is not only visible at the market-wide level, but also within subsegments. Homes in the bottom 25th percentile saw a year-over-year median price decline of 0.76%, while top-tier homes posted a modest 1.5% gain. However, both segments experienced per-square-foot pricing drops, confirming that buyers remain highly price-sensitive regardless of market tier.

Sales density is also shrinking. July produced just 2,528 closed transactions, with cumulative year-to-date sales totaling 17,729—down 5.6% from last year. When adjusted per 100,000 residents, the number of homes sold falls to just 695, which is 21.2% below the long-term average. Similarly, homes sold per 1,000 Realtors has dropped to 952, 25.1% below the 25-year baseline, signaling elevated agent competition and a thinner deal pipeline across the industry.

When tracking the current median price against the same metric from three years ago, the market has now retraced 15.53%. Using Austin’s 25-year compound appreciation rate of 4.838%, a home priced at $435,000 today would not return to the May 2022 peak value of $550,000 until approximately August 2030. That’s a five-year climb back to peak, assuming stable growth, which means buyers today are entering the market near its cyclical floor—with both leverage and time on their side.

Regionally, the most dramatic inventory increases are showing up in exurban areas and secondary markets like Smithville (up 111.3% YoY in Months of Inventory), Cedar Creek (up 95.6%), and Jarrell (up 84.1%). While central Austin inventory rose more modestly by 7.2%, the shift still reflects softening demand across nearly every price bracket and geography. The cities seeing year-over-year price appreciation are now in the minority—just 12 out of 30 cities tracked posted gains, while 18 cities recorded declines.

In terms of pricing strategy, it’s clear that sellers are being forced to realign. This is evidenced not only by the broad wave of price drops, but by the New Listing to Pending Ratio of just 0.71 for the month of July, and the year-long cumulative ratio of 0.69. Both suggest that homes are entering the market at price points buyers aren’t ready to accept. And while price reductions are common across all price bands, they are especially prevalent in the $400K–$700K range where much of the move-up market is currently stuck.

Taken together, these indicators present a cohesive picture: Austin is now deep in a supply-driven correction cycle. Sellers who are not urgently motivated to price competitively will likely remain on market through the fall. Buyers, on the other hand, have more leverage than at any point in the past five years. For those who are well-capitalized and willing to hold for 3–5 years, today’s environment presents an opportunity that hasn't been available since pre-pandemic 2019.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for: August 7, 2025​