Austin’s housing market enters fall with more supply, slower absorption, and prices still well below their 2022 peak.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for September 15, 2025.
The Austin real estate market began the week with 17,088 active residential listings, down slightly from the summer high of 18,146 reached in late June but still 15.2 percent higher than the same time last year. A majority of those homes—58.1 percent—have already seen at least one price reduction, underscoring how much sellers are adjusting to today’s buyer-driven environment. Pending listings stand at 4,038, nearly flat compared to the 4,100 recorded one year ago, but the market’s Activity Index has slipped to 19.1 percent, down from 21.6 percent in 2024. These indicators highlight a landscape of rising inventory and softer buyer demand, setting the tone for this week’s Austin housing forecast.
Active Listings and Supply Pressure
The current inventory count of 17,088 represents one of the highest levels of the past two years, even as it has pulled back slightly from the June high. Compared with September 2024, when active listings totaled 14,838, Austin now has about 2,250 more homes on the market. This is not a seasonal blip but part of a longer trend: cumulative new listings year-to-date stand at 39,589, up 1.0 percent year over year and 19.4 percent above the 25-year average. Supply is clearly outpacing demand, a reality reflected in the widening gap between new listings and pending contracts, which now sits at 7,232 homes for the year.
For buyers, this means more choices and stronger negotiating power. For sellers, the challenge is clear: with over half of homes already requiring price reductions to attract interest, standing out in a crowded field requires realistic pricing from day one.
Pending Contracts and Market Demand
While inventory has surged, pending contracts are struggling to keep pace. Year-to-date cumulative pending sales through September sit at 32,357, down 7.6 percent from last year and only 0.3 percent above the historical average. The monthly new listing-to-pending ratio currently sits at 0.55, well below the 25-year benchmark of 0.82. This indicates that for every two homes listed, only about one is going under contract.
This imbalance directly impacts the pace of the market. Fewer contracts per listing create longer days on market, encourage price cuts, and tilt negotiating leverage toward buyers.
Months of Inventory and Absorption
The Months of Inventory (MOI) metric—a key measure of how long it would take to sell all homes at the current sales pace—rose to 6.06 in September, compared to 5.31 at this time last year. That 14.2 percent increase pushes Austin into a more supply-heavy environment. Historically, Austin’s neutral range has been closer to 4 to 5 months of inventory, meaning current conditions are leaning toward a buyer’s market.
The absorption rate, which measures the percentage of active inventory that sells in a given period, sits at just 17.53 percent. This is well below the long-term average of 31.82 percent. In plain terms, buyers have time on their side, while sellers must fight for attention in a slower-moving market.
Prices and Long-Term Forecast
Price trends continue to reflect the market correction that began after the May 2022 peak. The average sold price in September was $570,310, down 16.37 percent—or about $112,000—from that peak. The median sold price tells an even starker story, at $435,000 compared to the high of $550,000 three years ago, representing a 20.91 percent decline.
When measured against 36 months prior, today’s median is 7.45 percent lower, confirming that prices are not only down from the peak but also trending below where they were three years ago. Based on Austin’s 25-year compound appreciation rate of 4.838 percent, it would take about 63 months—just over five years—for the market to return to its peak value of $551,769, assuming steady growth from today’s median of $435,000.
This projection frames the current market as an opportunity for buyers and long-term investors. Those entering now are effectively buying at a discount, with historical trends suggesting eventual recovery, though patience will be required.
Market Segments and Price Tiers
The distribution of price performance shows clear divergence between segments. Homes in the bottom 25th percentile declined 4.52 percent year over year, while the top 25th percentile actually gained 5.15 percent. Price per square foot followed a similar pattern, with the lower quartile down 3.28 percent and the upper quartile up 0.93 percent.
This means higher-end properties have proven more resilient, while entry-level homes—often more dependent on first-time buyers and affordability—have faced greater downward pressure. For agents, investors, and lenders, this signals that strategies must differ by price tier.
City-Level Trends
Across the 30 tracked cities in the Austin region, results are mixed. Ten cities posted year-over-year median price gains, while 20 declined. Notable standouts on the downside include Smithville, where inventory more than doubled year-over-year, and Manchaca, which saw months of inventory drop sharply, reflecting limited demand. In contrast, areas like Leander and Liberty Hill are still posting moderate price appreciation, supported by ongoing new construction activity.
Market Flow and Momentum
The Market Flow Score, a normalized index of supply-demand balance, is currently at 5.52. This remains below the historical average of 6.60, showing that momentum is sluggish and heavily tilted toward supply. Until absorption improves and the Activity Index climbs back above 20 percent, sellers should not expect rapid sales or aggressive bidding wars.
Implications for Buyers, Sellers, and Investors
For buyers, today’s Austin housing market offers leverage. More than half of listings have cut prices, and with over six months of inventory, the conditions favor patient negotiation. For sellers, the message is equally clear: pricing ahead of the market is essential. Listing above market value is almost a guarantee of a future price cut. Investors, meanwhile, can take advantage of discounted pricing relative to 2022 peaks, but must plan for a multi-year horizon before meaningful appreciation returns.
Agents navigating this environment must counsel clients on data-driven decisions. The days of homes selling in a weekend are long gone, replaced by a market where positioning, pricing, and patience matter more than ever.
Conclusion
September’s data highlights an Austin real estate market caught between abundant supply and sluggish demand. With active listings still elevated, pending contracts down, and prices well off their peaks, the market remains in correction mode. But history suggests that over time, steady appreciation will bring values back, making today’s environment one of challenge for sellers but opportunity for buyers and investors.
