The Austin real estate market continues to reveal its shifting balance between supply and demand, offering important insights for buyers, sellers, and investors alike. Today’s data highlights how active listings, pending contracts, and pricing trends are converging to define what may be the most important stage of the current housing cycle.
Active residential listings stand at 17,405, down from the summer high of 18,146 reached on June 30. This marks a pullback of 741 homes from that peak but still represents a 15.5 percent increase compared to the 15,065 listings available at this time last year. What’s notable is the quality of this inventory: nearly 59 percent of all listings have experienced at least one price reduction, showing that sellers are adjusting expectations in order to remain competitive. For buyers, this means options remain plentiful, and negotiation power is stronger than in recent years. For sellers, it underscores the reality of pricing sensitivity in today’s Austin housing market.
The flow of new inventory has been steady. Year-to-date, 36,260 new listings have come to market, which is 2.2 percent higher than last year and nearly 21 percent above the long-term average. While supply has been increasing, buyer demand has not kept pace at the same rate. Pending contracts year-to-date total 29,352, a decline of 6.8 percent compared to last year, though still slightly above average for this time of year. This imbalance—36,260 new listings against 29,352 pending contracts—results in a gap of nearly 7,000 homes. That gap translates into a lower absorption rate and ultimately contributes to a softer price environment.
The Activity Index, which measures the ratio of homes going under contract relative to active listings, reflects this shift. Today it sits at 19.8 percent, compared with 21.3 percent at this point last year, a 7 percent decline. To put this into perspective, an index closer to 25 percent signals a more active, balanced market, while one below 20 percent suggests sluggishness. The current level indicates buyers are being selective, and homes are sitting longer before finding contracts. It’s also worth noting that new construction continues to make up a significant share of the pending market, at nearly 28 percent, while resale activity lags at just under 17 percent.
The monthly new listing-to-pending ratio currently sits at 0.68, which means that for every 100 new listings entering the market, only 68 are going under contract. Historically, the 25-year average is 0.82, which points to a healthier balance. For 2025 year-to-date, the ratio holds at 0.69, confirming that the market is leaning toward oversupply relative to demand. This ratio is a leading indicator: when it dips below historical norms, it signals downward pressure on prices and extended time on market.
Months of inventory also highlight the current shift. Standing at 6.19 months, the market is noticeably heavier on supply than last year’s 5.32 months, a 16 percent increase. In practical terms, anything above six months leans toward a buyer’s market, and Austin is now brushing that threshold. From January through August, months of inventory have climbed nearly 24 percent. Cities like Cedar Park and Liberty Hill have seen inventory double since the same time last year, reflecting how quickly supply is outpacing demand in certain submarkets.
Sales volume continues to show the strain of this imbalance. In August, 2,756 homes closed, bringing the year-to-date total to 20,567, which is 4.6 percent below last year. While sales are slightly above the long-term average, the density of closings per population and per Realtor is significantly lower than historical norms. Sales per 100,000 residents are down nearly 22 percent compared to average, and sales per 1,000 Realtors are down more than 25 percent, signaling that competition among agents for fewer transactions is fierce.
Price performance remains central to the current Austin real estate forecast. The average sold price now stands at $606,630, a decline of 11 percent, or $75,000, from the peak of May 2022. Median prices tell a similar story: at $456,000, the market is down 17 percent from the $550,000 peak, reflecting a $94,000 decrease. Looking at longer-term trends, today’s median is 8 percent lower than where prices were three years ago. However, using Austin’s 25-year compound annual appreciation rate of just over 5 percent, the projection is that it will take about four years—until mid-2029—for the market to return to peak values if today indeed marks the bottom of the cycle.
Breaking down the data further, the top quartile of the market is still showing strength. High-end properties posted a year-over-year gain of just over 6 percent in median prices, even while their price-per-square-foot declined modestly. Meanwhile, homes in the bottom quartile saw a 1.5 percent decline in median price and a 3.6 percent drop in price-per-square-foot. This divergence suggests that wealthier buyers are still active, while more price-sensitive segments of the market are pulling back.
Absorption rates further confirm the slower pace. The sold-to-active ratio currently sits at 16.15 percent, well below the historical average of nearly 32 percent. A ratio above 20 percent indicates a strong seller’s market, while below 10 percent reflects extreme buyer leverage. At 16 percent, Austin is in a middle zone that leans toward buyers but is not entirely stagnant. The Market Flow Score, another measure of turnover speed, is currently 4.38 on a 0-to-10 scale, considerably below the historical average of 6.6. This again points to a market that is moving slower than normal.
For buyers, today’s Austin housing forecast offers an opportunity to shop with leverage. With nearly six months of inventory and more than half of active listings undergoing price reductions, buyers can negotiate more confidently than in previous years. For sellers, realistic pricing and strong presentation are non-negotiables; the market punishes listings that overshoot on price. Investors should be encouraged by the projected return timeline, as history shows Austin real estate has always rebounded after corrections, though patience will be required.
In conclusion, the Austin housing market is navigating a period of higher supply, cautious demand, and continued price adjustments. Active listings are abundant, price reductions are widespread, and inventory is near buyer’s market territory. While this may challenge sellers, it creates opportunities for buyers and investors positioning for long-term gains. The Austin real estate market has proven resilient over decades, and today’s numbers suggest we are still in the adjustment phase before the next cycle of appreciation begins.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for August 19, 2025
