The Austin housing market continues to balance between elevated inventory and subdued buyer activity, with price levels holding below their 2022 peak and market momentum remaining well under historical norms.
Market Overview
Active residential listings in Austin sit at 16,983, down from the high of 18,146 reached at the end of June but still 16.6% higher than this time last year. Over half of all homes on the market—58.0%—have experienced at least one price reduction, signaling sellers’ growing urgency to compete for fewer active buyers. The supply picture shows clear differences between property types: new construction homes are absorbing at a 26.4% rate, compared with only 16.6% for resale properties. This divide underscores the continued pressure on existing homeowners to cut prices while builders use incentives to keep moving inventory. The rise in inventory has lifted the months of supply to 6.03, a sharp increase from 5.17 months one year ago. Historically, Austin has run closer to a balanced 4–5 months, meaning today’s market leans toward buyers. For context, a supply above six months often tilts in favor of buyers, while anything below four months generally reflects a seller’s advantage. The shift to higher supply represents a notable break from the fast-paced, low-inventory environment that defined Austin real estate in the pandemic years.
Buyer and Seller Activity
Contract activity remains muted compared to historical averages. Pending listings are up just 1.6% from last year, totaling 4,047 versus 3,982 in 2024. However, year-to-date pending contracts are actually 1.6% lower than 2024 and sit only 6.0% above long-term averages. This flattening of contract volume, combined with rising new listings, has pushed the New Listing-to-Pending Ratio to 0.75 for the month and 0.70 year-to-date, well below the 25-year average of 0.82. The gap translates to 6,819 more homes listed than placed under contract so far this year, an imbalance that has kept inventory elevated. The Activity Index, which measures buyer engagement relative to available listings, has dropped to 19.2% compared to 21.5% in 2024—a decline of 10.4% year-over-year. Simply put, there are more homes for sale but proportionally fewer buyers stepping in to write offers. This aligns with what agents are seeing on the ground: showings are happening, but negotiations are tougher, and buyers feel no urgency to rush.
Sales Performance and Pricing Trends
Closed sales volumes continue to lag. Cumulative sales from January through August reached 20,383, which is 5.5% below last year. Although this number is still 5.3% above the long-term average, it reflects that the recovery in buyer demand remains patchy. When adjusted for population, the slowdown looks even sharper: sales per 100,000 residents are down 7.7% year-over-year and sit more than 22% below historical norms. Prices remain well under the pandemic peak. The average sold price in August was $588,255, down nearly $94,000 (13.7%) from the May 2022 high of $681,939. The median sold price now stands at $443,800, marking a 19.3% decline ($106,000) from its $550,000 peak. Looking at the broader market cycle, today’s median price is about 10.6% below where it was three years ago, confirming that this correction has retraced multiple years of appreciation. Long-term projections provide perspective. Using Austin’s 25-year compound appreciation rate of 4.922%, the market would need approximately 57 months (April 2030) to regain the prior peak of $552,132 if today’s price of $443,800 represents the bottom. While not a prediction, this calculation highlights the patience required for price recovery once values fall substantially below highs.
Segments of the Market
The split between entry-level and luxury properties remains stark. In the last year, the bottom 25th percentile of the market has seen prices fall by 3.3%, while the top 25th percentile gained 7.8%. High-end buyers are still active, supported by cash and wealth inflows, while more affordable segments are weighed down by financing costs and affordability challenges. Regional trends mirror this divide. Out of Austin’s 30 tracked cities, 11 recorded year-over-year price gains while 19 posted declines. Areas with higher-priced inventory and stronger employment bases are weathering the slowdown better, whereas outer suburban and starter-home markets are facing deeper adjustments.
Market Momentum and Absorption
The absorption rate, or sold-to-active ratio, stands at 16.8%, barely half the historical average of 31.8%. This weak absorption rate confirms that the market is still oversupplied relative to demand, creating leverage for buyers and lengthening selling timelines. The Market Flow Score (MFS) has registered 5.08 on a 0–10 scale, well below the historical norm of 6.6. A higher score would indicate faster turnover and stronger demand, but today’s number signals a sluggish, supply-heavy environment. While not at crisis levels, it underscores the long road back to balance.
What This Means Going Forward
For buyers, the Austin housing market today offers more choice, greater negotiating power, and the chance to secure homes at nearly 20% below peak prices. Sellers face a different reality: more competition, slower traffic, and the need to price aggressively to attract offers. Investors must weigh the long-term fundamentals—Austin’s population growth, job creation, and steady 25-year appreciation rate—against short-term softness and extended hold times. Agents should recognize that today’s market is shaped less by bidding wars and more by patient negotiation. Success will depend on accurate pricing strategies, clear communication with clients about market cycles, and a willingness to adapt as conditions shift. The Austin real estate market is no longer in freefall, but it has yet to show signs of sustained recovery. Inventory remains high, contract activity is sluggish, and prices are still retracing from pandemic highs. Until absorption improves and the Activity Index climbs back toward historical norms, this remains a buyer-favored market with selective opportunities.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for September 3, 2025.
