Tagline: Austin’s housing market continues to rebalance as inventory climbs, buyer urgency softens, and prices hold near a 13% correction from peak.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for October 8, 2025.
Austin’s real estate market is showing clear signs of stabilization, even as it continues to navigate through an extended correction phase. As of October 8, 2025, there are 16,409 active residential listings, a 13.8% increase from last year’s 14,423. This total remains below the summer high of 18,146 seen at the end of June but still represents one of the largest active inventories in the past decade. Nearly 59% of all active homes have had at least one price drop, a sharp indicator that sellers are adjusting expectations to meet today’s slower-moving demand.
Pending contracts continue to lag. The Austin-area now records 3,868 pending listings, down 5.2% from last year. The Activity Index, which measures the ratio of pending to active listings, has fallen to 19.1%, down from 22.1% a year ago. For context, a balanced market typically reflects an Activity Index between 25% and 30%, meaning Austin remains firmly in a “softening to contraction” phase. New construction maintains stronger traction at 25.1%, while resale activity sits at 16.7%, signaling that new-home builders are outpacing traditional resale sellers in absorption.
The Months of Inventory (MOI) — one of the most telling indicators of supply-demand balance — has increased to 5.79 months, up 13.1% year over year from 5.12. Historically, Austin’s long-term MOI average has hovered closer to 4.5 months. This suggests a clear shift toward buyer-favorable conditions, especially in resale segments. While city-level inventory rose only 2.2% compared to October 2024, the year-to-date change across Austin is up 23.4%, showing how sustained new listings have added long-term supply pressure.
Even with inventory high, new listing momentum is flattening. Year-to-date, 42,303 new listings have entered the market, down slightly (-0.9%) from last year but still 16.6% above the 25-year historical average. Meanwhile, cumulative pendings total 35,112, which is 8.5% lower year-over-year and slightly below the long-term average. This imbalance between new listings and pendings — a gap of over 7,100 units — has kept the New Listing-to-Pending Ratio elevated at 0.71, just below the long-term norm of 0.82. On a monthly basis, the ratio sits at 0.53, reflecting that for every two new listings entering the market, only about one is going under contract.
Sales velocity continues to moderate. There were 2,523 homes sold in October, contributing to 25,673 cumulative sales so far this year. That total is 3.1% lower than the same period last year, though still 7.4% above the 25-year average. However, when measured per 100,000 residents, the market’s sales density sits at 1,003 — 20.8% below historical norms, underscoring the population-adjusted slowdown in turnover. In contrast, the number of sales per 1,000 Realtors is 1,390, slightly up 2% year-over-year but still down sharply (-23.3%) from the long-term average, showing that while agents are producing, competition remains fierce.
Home prices have mostly leveled out after two years of correction. The average sold price in Austin for October is $612,147, down 10.2% from the May 2022 peak of $681,939. The median sold price is now $475,000, a 13.6% drop from its $550,000 high. When viewed through a long-term lens, today’s median price is only about 1% higher than it was three years ago, highlighting how the market’s rapid 2021–2022 appreciation has now been almost entirely unwound. Using Austin’s 25-year compound annual appreciation rate of 5.21%, it would take approximately 37 months — until late 2028 — for prices to return to their prior peak, assuming normal appreciation resumes.
Not all price segments are moving equally. Over the past year, homes in the bottom 25th percentile saw prices fall 3.4%, with price-per-square-foot dropping 3.8%, while homes in the top 25th percentile managed a modest 2.5% price gain despite a slight (-1.1%) dip in $/sqft values. This bifurcation signals that demand for well-located, move-in-ready, higher-end properties remains resilient, while entry-level homes continue to bear the brunt of affordability constraints and high borrowing costs.
City-level data reflects a widespread softening pattern. Of the 29 cities tracked, nine posted year-over-year price gains, while 20 declined. Markets such as Georgetown, Liberty Hill, and San Marcos have seen inventory climb more than 40% year-to-date, while Cedar Park and Buda remain closer to balance. On the opposite end, areas like Smithville, Spicewood, and Dale now have over 10 months of inventory, indicating minimal buyer absorption and ongoing downward price pressure. Across the metro, the absorption rate — the percentage of active listings sold within a month — stands at 17.4%, nearly half the historical average of 31.8%. This gap illustrates how much the market has slowed compared to Austin’s long-term pace.
Meanwhile, the Market Flow Score (MFS) — a composite indicator of turnover velocity and absorption — is at 5.6, down from the historical norm of 6.6. While not an outright crisis, this lower score reflects a sluggish but stable market environment where buyers have more time, sellers must stay competitive, and agents must navigate higher days on market and increased negotiation pressure.
Looking ahead, the Austin housing forecast for late 2025 and early 2026 suggests continued moderation. Seasonal slowdowns are already visible, and with over half of active listings cutting prices, buyer sentiment remains cautious. However, stability in interest rates and the steady pace of new construction activity are likely to keep the market from tipping into a full freeze. The longer-term view remains healthy — Austin’s 25-year trendline of steady 5% appreciation, coupled with regional population and job growth, continues to support gradual recovery once equilibrium returns.
For now, this is a buyer-skewed market defined by excess supply, lower absorption, and a stretched timeline for price recovery. Sellers must prioritize presentation and pricing accuracy to compete effectively, while buyers hold the advantage of choice and negotiation leverage that has been absent for much of the past decade.
