Austin’s housing market continues to show the push-and-pull between higher supply and moderated demand, giving buyers more leverage while testing sellers’ pricing strategies.
The Austin real estate market update for Wednesday, August 20, 2025, offers a clear snapshot of how shifting inventory and buyer behavior are reshaping the landscape. Active residential listings stand at 17,334, which is up 15.4 percent compared to this time last year. While this number is slightly below the recent peak of 18,146 recorded at the end of June, it still represents one of the highest levels of available homes we’ve seen in the past two years. For buyers, more options mean greater negotiating power. For sellers, this level of competition requires careful pricing and presentation to attract offers.
One of the most striking indicators in today’s report is that 59.2 percent of all active listings have had at least one price drop. That means nearly six out of every ten sellers have had to adjust expectations downward in order to align with buyer demand. This trend highlights the market’s cooling from its frenzied peak in 2021 and 2022. For real estate agents, these figures confirm what clients are experiencing: buyers are cautious and selective, while sellers are realizing that initial asking prices often overshoot current market reality.
When looking at new listings, the market continues to bring more homes into the pipeline. Year-to-date, 36,370 new listings have been recorded, which is 2.5 percent higher than last year and 21.1 percent above the long-term average. This pace of new supply shows that homeowners are still confident about listing, but the growing gap between new listings and pending contracts is worth attention. Year-to-date, cumulative pending sales stand at 29,498, which is down 6.3 percent compared to last year but still slightly above the historical average. The imbalance has widened to a difference of 6,872 between new listings and pending contracts, confirming that homes are entering the market faster than they are being absorbed.
The Activity Index, a measure of how quickly properties are moving, illustrates this slowdown. Currently at 19.8 percent, it is down from 21.4 percent a year ago, a 7.3 percent decline. The breakdown tells an important story: new construction is posting a stronger activity index of 27.8 percent, while resale homes are at just 16.8 percent. This confirms what many buyers are seeing—builders are offering incentives and moving inventory faster, while resale sellers face tougher competition.
Months of Inventory, one of the most watched indicators for forecasting housing conditions, has climbed from 5.3 months in August 2024 to 6.17 months today. That 16.3 percent increase signals a more pronounced buyer’s market. Historically, Austin has averaged closer to 4 months of inventory during balanced periods. With over six months of supply available, sellers must be prepared for longer marketing times and more negotiation.
Sales volume reflects the challenges. So far in 2025, 20,567 homes have sold between January and August, which is 4.6 percent fewer than last year, though still 6.2 percent above the long-term average. When adjusted for population growth, the slowdown becomes even more evident: 805 homes sold per 100,000 residents, which is 6.8 percent lower than last year and nearly 22 percent below the long-term norm. For realtors, this means more competition for each closing, as more agents are working with fewer transactions overall.
Prices, however, have held better than some feared. The average sold price is now $606,771, about $75,000 below the May 2022 peak of $681,939, an 11 percent decline. The median sold price stands at $457,500, down 16.8 percent from the peak of $550,000 reached in 2022. Compared to three years ago, the current median is 7.8 percent lower. For buyers, these numbers mean greater affordability relative to recent highs, though not necessarily “cheap” homes by historical standards. For investors, the pullback may offer opportunity, especially when viewed through the lens of Austin’s 25-year compound appreciation rate of just over 5 percent annually. Based on that growth rate, if today’s median of $457,500 represents the bottom, the market would need roughly 47 months—taking us to mid-2029—to regain the $550,000 peak value.
The split between high-end and entry-level homes reveals another layer of the story. Over the past year, the top quartile of the market has appreciated by 6.5 percent, while the bottom quartile has slipped by 1.2 percent. In price per square foot, both segments have declined, but the lower tier has softened more. This suggests that luxury buyers remain more active, while affordability constraints weigh heavily on the entry-level segment.
Absorption rates confirm the cooling dynamic. The sold-to-active ratio is 16.2 percent, well below the historical average of nearly 32 percent. This ratio measures how much of the existing inventory is being sold in a given period. At current levels, it is clear the Austin housing market favors buyers. A stronger seller’s market typically requires a ratio above 20 percent, while anything below 10 percent reflects a very sluggish environment. Today’s 16 percent puts Austin in a transitional zone where sellers must compete aggressively for offers.
The Market Flow Score, another forward-looking measure of balance between supply and demand, sits at 4.40. This is significantly lower than the historical average of 6.60, reinforcing the theme that while demand is not absent, it is outpaced by the volume of supply. For real estate professionals, this underscores the importance of preparing clients for longer listing times, the likelihood of concessions, and strategic pricing from day one.
From a housing forecast perspective, the data points toward continued stability at current price levels, but without signs of rapid recovery. Inventory levels remain elevated, buyer activity is cautious, and affordability remains stretched compared to income levels. This balance suggests that while the market may have bottomed in terms of pricing, it could remain sluggish for several years as supply gradually works down.
For buyers, today’s Austin market represents opportunity. With over 17,000 active listings and the majority experiencing price adjustments, the chance to negotiate favorable terms is higher than at any point since 2019. For sellers, the message is clear: realistic pricing and standout presentation are essential to competing in a crowded marketplace. For investors, the long-term fundamentals remain intact, but patience will be required to ride out the current imbalance between supply and demand.
In summary, today’s Austin housing market update shows a city still adjusting after the rapid rise and correction of the past few years. Inventory remains high, demand steady but subdued, and prices off their peaks but not collapsing. Both buyers and sellers must navigate this middle ground strategically.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for Wednesday, August 20, 2025.
