The Austin housing market continues to show resilience but remains weighed down by elevated inventory and a slower pace of absorption. With over 17,000 active listings on the market and more than half of them marked by price reductions, buyers are gaining leverage while sellers must navigate an increasingly competitive environment.

Market Overview
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As of September 2, 2025, active residential listings in the Austin area stand at 17,088, only slightly below the summer peak of 18,146 reached on June 30. Compared to last year’s 14,644, inventory has expanded by 16.7% year-over-year, offering buyers a wider selection of homes. This growth in supply has not been met with equal demand, as reflected in the Activity Index, which fell from 21.5% in 2024 to 19.4% this year, signaling slower buyer engagement.

Notably, 58.2% of all active listings have had at least one price drop, reinforcing the fact that sellers are adjusting expectations to meet current market conditions. This is not isolated to one segment—price reductions are being recorded across Austin, Georgetown, Leander, Round Rock, and nearly every major suburb.

For context, cumulative new listings from January through August reached 37,819, which is 6.6% higher than last year and 25.7% above the long-term average. This reflects a market still seeing strong homeowner willingness to list, but without proportional contract activity. Pending sales are at 4,123, up just 2.5% from last year’s 4,021. However, cumulative pending contracts for the year are down 1.9% year-over-year, even though they remain 5.6% above average.

Housing Prices
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Prices have pulled back substantially from the pandemic-era peak in May 2022, when the median sold price was $550,000. As of August 2025, the median sold price is $448,000, a decline of 18.55% from the peak. The average sold price sits at $589,532, down 13.55% from the May 2022 high of $681,939.

When compared to the last three years, prices today are tracking 9.72% below where they were 36 months ago, reflecting a reset to more sustainable levels. Yet, long-term appreciation remains intact: over the past 25 years, Austin real estate has compounded at an average annual rate of 4.962%. If appreciation resumes at this pace, it would take about 54 months (January 2030) for median values to return to $551,767—the equivalent of the last peak.

Interestingly, the market is showing a split between segments. The top 25th percentile of homes has posted an 8.0% annual price gain, while the bottom 25th percentile is down 2.23% year-over-year. This suggests higher-end homes are holding their value better than entry-level properties, where buyers remain more price-sensitive.

Regional Trends
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Inventory growth is uneven across the metro. Some cities like Smithville, Jarrell, and Dale have seen months of inventory climb sharply—Smithville is now at 14.84 months, up 175% year-over-year. More central and established markets such as Austin proper are trending closer to balanced conditions, with 5.06 months of supply, down 4.6% from last year.

Several suburban areas remain buyer-friendly. Leander, Liberty Hill, and Pflugerville are all showing months of inventory well above 5.0, signaling strong competition among sellers. In contrast, markets like Kyle and San Marcos are holding closer to 3.5 to 5.3 months of supply, offering more balanced dynamics.

Sales activity underscores the challenge of absorbing supply. August posted 2,439 closed sales, bringing year-to-date sold properties to 20,290, which is 5.9% lower than 2024. On a per-capita basis, Austin’s sales density stands at 795 sales per 100,000 residents, down 8.1% year-over-year and 22.7% below the long-term average. Realtor productivity has also softened, with 1,087 cumulative sales per 1,000 Realtors, reflecting both competition and an oversupply of agents relative to sales volume.

List-to-Sale Price Performance
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The absorption rate, which measures the ratio of sold to active listings, is currently 16.04%. Historically, Austin has averaged 31.81%, so today’s market is operating at just over half its normal efficiency. This gap explains why inventory continues to climb despite steady new listings and modest buyer activity.

The Market Flow Score, another key leading indicator, stands at 4.72 on a 10-point scale. Historically, Austin averages 6.59. Lower scores indicate a slower-moving market where buyers face less urgency and sellers must compete harder for offers.

For sellers, this translates to longer days on market, higher probabilities of price adjustments, and an environment where aggressive pricing strategies backfire. For buyers, it represents leverage—negotiation power, wider options, and less pressure to rush decisions.

Peak Value Trends
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One of the most important takeaways from today’s Austin housing update is how far the market has corrected from its pandemic highs. The decline of $102,000 in the median price from May 2022 to August 2025 has effectively reset affordability, though not enough to fully offset higher borrowing costs.

The forward-looking forecast depends heavily on absorption rates. If the market stabilizes at today’s inventory levels and appreciation resumes at Austin’s long-term historical pace of 4.962% annually, recovery to peak values will take over four years. But if inventory continues to expand, that timeline could stretch further, creating more prolonged buyer-friendly conditions.

Conclusion

Today’s Austin real estate market is best described as supply-heavy and demand-light, with buyers gaining negotiating leverage and sellers forced to make pricing concessions. With 17,088 active listings, 58.2% with price reductions, a median price of $448,000, and months of inventory at 6.10, the balance tilts toward buyers for now. For investors, this offers opportunities to acquire property at a discount relative to recent years, though patience will be key as the market works through excess supply.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for September 2, 2025.​