Austin’s housing market continues to walk the tightrope between balance and slowdown—inventory is rising, absorption is weakening, and prices remain below their 2022 peak, signaling an extended correction phase.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for October 9, 2025.
The Austin real estate market on October 9, 2025, presents a textbook example of a cooling cycle moving through its late stages. Active residential listings have climbed to 16,423, up 14.2% year over year, signaling continued pressure on sellers as available inventory expands faster than pending sales. Nearly 59% of active homes have seen at least one price drop, underscoring a market that is recalibrating expectations amid reduced demand.
By contrast, pending listings are down 6.1% year over year, sitting at 3,849—a modest decline but enough to tip the balance toward slower absorption. The Activity Index, which measures the share of active listings that go under contract, has slipped to 19.0%, well below the 22.2% level this time last year and far under the long-term average near 30%. These shifts reflect a broad cooling trend across both resale and new construction segments.
A Market Defined by Imbalance
Cumulative data tells the story clearly. Year-to-date, 42,644 new listings have entered the market—virtually flat at -0.1% year over year, yet 17.5% above the historical average. Meanwhile, cumulative pending contracts total 35,343, down 7.9% year over year and nearly in line with long-term norms. This creates a widening gap between supply and demand—a 7,301-listing surplus—which exerts downward pressure on prices and increases competition among sellers.
The New Listing-to-Pending Ratio for the year sits at 0.71, trailing the 25-year average of 0.82. Historically, a ratio below 0.80 signals sluggish absorption, where new inventory consistently outpaces contracts. The current monthly ratio of 0.52 underscores how sharply demand has slowed compared to the volume of homes being listed.
The Months of Inventory (MOI) metric—a key barometer of balance—has risen to 5.77 months, up 12.9% from last year’s 5.11. This shift places Austin firmly in a buyer-favored environment, though not yet in oversupply territory. Within city limits, the change is less severe, with MOI up only 0.6% year over year. However, several suburban markets show far more dramatic increases: Cedar Creek (+57%), Leander (+55%), and Smithville (+51%) now carry some of the heaviest supply loads in the metro area.
Market Phase Classification
When we examine the Activity Index by market phase, the majority of the Austin area is operating in “softening” or “contraction” phases. Only five cities and twelve ZIP codes remain in “equilibrium,” while twenty cities and forty-one ZIP codes are now in either the Contraction or Crisis/Freeze zones—where buyer activity drops below 20%.
In practical terms, that means roughly half the region’s micro-markets are experiencing price stagnation or decline. Builders, too, feel this effect—new construction activity (24.89%) still outpaces resale absorption (16.68%), revealing that builder incentives continue to compete directly with resale listings.
Pricing Pressure Persists
Despite stronger seasonal listings, prices have held relatively stable—but below peak. The average sold price in October stands at $619,227, down 9.2% from the May 2022 peak of $681,939, while the median price of $475,000 reflects a 13.6% drop from the $550,000 high.
At current levels, the median price is only 1.06% above its level from three years ago, a flatline that underscores how the post-pandemic surge has fully normalized. The bottom 25th percentile of homes is down 4.26% year over year, while the top 25th percentile has eked out a 2.46% gain, suggesting higher-end properties remain more insulated from discounting.
If we assume the market has already reached its cyclical bottom, Austin’s long-term appreciation rate of 5.208% annually suggests it would take approximately 37 months (through October 2028) for the median price to return to its previous peak of $550,697.
Slower Turnover, Fewer Sales per Agent
Sales velocity continues to lag historical benchmarks. Austin recorded 2,278 closed sales in the most recent month, bringing the year-to-date total to 25,442, a 4% decline year over year. When adjusted for population, that translates to 994 home sales per 100,000 residents, down 6.2% year over year and 21.5% below long-term averages.
Even more telling is the sales-per-agent ratio, which stands at 1,375 transactions per 1,000 REALTORS®, flat year over year but still 24% below its historical average. In other words, while agent membership has declined, it hasn’t yet balanced to match lower transaction volumes—a sign of continued margin compression across the industry.
The Absorption Rate, or sold-to-active ratio, is at 17.44%, just over half the 25-year average of 31.76%. This confirms a sluggish demand environment: homes are selling, but at a slower clip, and often only after price reductions or extended marketing times.
Market Flow Score: Sluggish but Stable
The Market Flow Score (MFS), a composite indicator of market efficiency, currently measures 5.62, compared to a long-term average of 6.59. This reading reinforces what the raw data shows—a market that’s functioning but moving slowly. Buyers remain cautious, listings are plentiful, and turnover efficiency remains below par.
Outlook
In the short term, the Austin housing forecast points to a sustained period of stabilization rather than rapid recovery. The inventory build suggests prices will remain flat through winter, with potential for mild appreciation if mortgage rates ease in 2026. However, given the volume of homes still adjusting to new price levels, any rebound will be gradual.
For buyers, this market offers leverage unseen since 2018—ample choices, motivated sellers, and negotiation room. For sellers, competitive pricing and strategic presentation are essential to avoid languishing listings. Investors may find renewed opportunity in value segments, particularly as rents stabilize and interest rate cuts re-enter the national conversation in 2026.
For real estate professionals, this market demands adaptability: pricing strategy, listing timing, and accurate absorption-rate analysis are key. Markets like Austin, Hutto, and Liberty Hill may behave differently than downtown or Lakeway, but all share one common truth—this is no longer a market where momentum alone sells homes.
