The Austin housing market is adjusting under the weight of higher supply, softer buyer activity, and pricing that remains nearly a quarter below peak values.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for October 3, 2025.
Austin real estate continues to reflect a market searching for balance. Active residential listings stand at 16,480, up 13.5% year-over-year and still well below the summer high of 18,146 recorded in June. More than 59% of homes on the market have experienced at least one price drop, evidence that sellers are needing to adjust expectations to match current demand. For buyers, this is the strongest negotiating leverage seen in years. For sellers, the takeaway is clear: pricing competitively from the start matters more than ever in today’s Austin housing market.
Active Listings and Inventory Trends
The growth in listings is unmistakable. Compared with September 2024, inventory is up by nearly 2,000 properties. Over the first nine months of 2025, 41,387 new listings have come to market, which is 5.6% higher than last year and a significant 24.6% above the long-term average. Supply continues to expand faster than demand can absorb it.
This imbalance is reflected in the Months of Inventory (MOI), which now sits at 5.82 months, a 12.7% rise from last year’s 5.16 months. The MOI metric essentially measures how long it would take to sell the current inventory at the current pace of sales. A market balanced between buyers and sellers typically hovers around 4 to 6 months. Today’s figure puts Austin firmly in a market that leans toward buyers.
At the city level, the changes are even more striking. Georgetown, Liberty Hill, and Leander are each carrying over five months of inventory, while parts of Bastrop and Marble Falls are showing double-digit months of supply. The numbers point to a slower sales cycle and the need for sharper strategies from sellers and their agents.
Buyer Demand and Pending Activity
While supply rises, demand has slipped. Pending listings in September 2025 totaled 3,754, down 6.1% year-over-year compared with the 3,999 seen in September 2024. Cumulatively, 34,403 homes have gone under contract so far this year, representing a 1.8% decline compared to last year.
The Activity Index, which tracks buyer engagement, dropped from 21.6% in 2024 to 18.6% in 2025, marking a 14.1% decrease. This is a clear signal that while homes are available, buyers are proceeding more cautiously. New construction homes are performing better, posting an Activity Index of 24.64%, compared with 16.21% for resale homes. Builders with incentives and buy-down offers continue to capture a larger share of buyers in this environment.
Sales Performance and Pricing
Closings also reflect the slowing demand. September saw 2,475 completed home sales, part of a cumulative 23,068 sales year-to-date. That’s 3.5% fewer than the same period in 2024, though still 6.3% above the long-term average.
Price performance remains a defining feature of the Austin real estate forecast. The average sales price in September 2025 was $550,594, down 19.26% ($131,000) from the May 2022 peak of $681,939. The median sales price sits at $417,000, representing a 24.18% ($133,000) decline from the May 2022 peak of $550,000. Compared with 36 months ago, the median is down 11.28%, underscoring that Austin housing values are still working through the correction phase.
From a long-term perspective, the 25-year compound annual appreciation rate remains at 4.66%. If current conditions hold, it would take 77 months—or until January 2032—for Austin housing to return to a peak value near $551,822. This is a sobering but realistic outlook for investors and homeowners looking ahead.
Market Efficiency and Flow
Two additional metrics confirm today’s supply-heavy environment. The Absorption Rate, which compares the number of sold homes against total active listings, is currently 16.97%, barely half of the historical average of 31.76%. In other words, a much smaller share of inventory is being sold each month.
The Market Flow Score (MFS) stands at 5.36, below its historical average of 6.59. The MFS combines several turnover and absorption metrics into a single number, where higher scores represent stronger momentum. Austin’s current reading reflects a market where supply is outpacing demand and properties are lingering longer before finding buyers.
What This Means for Buyers
For buyers, the October 2025 Austin market update points to opportunity. Inventory is higher than in previous years, and with nearly 60% of active listings cutting price, buyers have more leverage than they’ve had since before the pandemic. The widening gap between new listings and pendings also suggests more choices and less competition when making offers.
Buyers considering new construction may find especially favorable terms, as builders continue to offer concessions to move inventory. For resale buyers, patience and negotiation are key, as sellers adjust to today’s slower pace.
What This Means for Sellers
For sellers, the Austin housing forecast stresses the importance of competitive pricing. With supply outpacing demand, homes that are overpriced risk sitting on the market and ultimately requiring price cuts. The fact that the majority of homes listed this year have reduced their asking price confirms that buyers are unwilling to stretch. Sellers must rely on strong presentation, accurate pricing, and realistic timelines.
If a home is well-prepared and priced appropriately, it can still attract interest, but days on market are lengthening. Those entering the market now should plan for longer marketing windows and be ready for negotiations.
What This Means for Investors
For investors, this environment signals selective opportunity. With median values still 24% below the 2022 peak, acquisitions made today may carry long-term upside, though the return to peak values is projected to take more than six years at historic appreciation rates.
Cash flow analysis is crucial. The combination of higher supply, slower absorption, and declining prices makes for a disciplined acquisition environment. Cap rates are improving in several zip codes, and investors who understand Austin’s cyclical nature may find opportunities to lock in assets at a relative discount.
What This Means for Agents
For real estate agents, today’s Austin market update underscores the importance of guiding clients with data. Sellers need context for why pricing strategies must be more aggressive. Buyers need education on how today’s conditions create leverage they haven’t seen in years. Investors need careful modeling that accounts for slower appreciation timelines.
Agents who master these insights and communicate them clearly will stand out in a crowded but shifting marketplace.
