The Austin real estate market continues to adjust as 2025 comes to a close, and today’s data confirms a market that has stabilized from its peak stress but has not yet returned to balance. Active residential listings currently sit at 13,858, which is well below the June 2025 peak of 18,146 but still 15.2 percent higher than the same time last year. This matters because even though inventory has come down from its highs, supply remains elevated relative to demand, keeping pressure on prices and negotiations across much of the Austin housing market.
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One of the clearest signals of ongoing seller stress is pricing behavior. Today, 56.7 percent of all active listings across the MLS have experienced at least one price reduction. That means more than half of sellers have already adjusted expectations, often after initial listing strategies failed to attract sufficient buyer activity. In healthier markets, price drops are the exception rather than the norm. In today’s Austin real estate environment, they are the rule.
Breaking inventory into segments helps explain what is happening beneath the surface. Of the 13,858 active listings, 4,114 are new construction and 9,744 are resale homes. New construction continues to play an outsized role in overall supply as builders work through homes that were planned and started during a very different market cycle. Resale sellers are competing not just with each other, but also with builders offering incentives, rate buy downs, and flexible terms that many individual sellers cannot match.
New listings activity remains elevated. From January through December, 49,301 new residential listings have come to market, which is 3.7 percent higher than last year and a full 21 percent above the long term average. This tells us that homeowners are still choosing to sell, even in a slower market, often due to life changes rather than opportunistic timing. However, elevated new listings only help the market if they are met with rising demand, which has not occurred.
Pending listings continue to lag. There are currently 3,560 homes under contract, down 4.8 percent year over year. Cumulative pending listings for the year total 42,669, which is 3.4 percent lower than last year, even though it remains slightly above the historical average. This gap between new listings and pending sales explains why inventory remains high. For the year, there are 6,632 more new listings than pending contracts, reinforcing the supply imbalance that continues to define the Austin housing forecast.
The Activity Index offers one of the clearest views of buyer behavior. Today, the overall Activity Index stands at 20.4 percent, down from 23.7 percent one year ago. New construction is outperforming resale with an Activity Index of 27.39 percent, while resale activity sits at just 17.09 percent. This puts much of the resale market squarely in the contraction or danger zone, where supply outpaces demand and price declines are more likely than price growth.
When Activity Index data is broken into market phases, the picture becomes even clearer. Roughly half of resale markets fall into the contraction zone, and another large share sits in crisis or freeze conditions where buyer hesitation is strongest. These are environments where homes take longer to sell, negotiations favor buyers, and sellers must compete aggressively on price, condition, and terms to secure a contract.
The new listing to pending ratio further confirms these trends. On a monthly basis, the ratio currently sits at 0.77, meaning there are significantly more homes being listed than going under contract. For the full year, the cumulative ratio is 0.73, well below the 25 year average of 0.82. Historically, ratios below average are associated with slower absorption and rising inventory, both of which are present in today’s Austin real estate market.
Months of inventory provides another important lens. Austin currently stands at 4.93 months of inventory, up from 4.23 months one year ago, representing a 16.4 percent increase. While this is not an extreme oversupply by historical standards, it firmly places the market in buyer advantage territory. When inventory approaches or exceeds five months, sellers lose pricing power and buyers gain leverage in negotiations.
Resale only inventory trends reinforce this conclusion. A growing share of resale markets now fall into buyer advantage or buyer control categories, where inventory exceeds 210 days of supply. These conditions typically lead to longer days on market, more frequent price reductions, and an increased likelihood of seller concessions.
Sales activity remains below peak but is not collapsing. In December, 2,447 homes sold across the Austin area. For the year, cumulative sales total 30,214 properties, down 3.8 percent year over year but still 7.5 percent above the long term average. This shows that transactions are still occurring, but they are being spread across a much larger pool of listings.
When population and agent counts are factored in, the slowdown becomes more apparent. Sales per 100,000 residents are down 6 percent year over year and more than 20 percent below average. Sales per 1,000 Realtors are down nearly 23 percent below average, even though they are slightly higher than last year. This explains why competition among agents remains intense and why pricing strategy has become so critical for listings.
Price trends continue to reflect a slow, grinding correction rather than a sharp decline. The average sold price in December is $600,009, down about 12 percent from the May 2022 peak. The median sold price stands at $445,468, representing a 19 percent decline from the $550,000 peak. Importantly, the median price is now only about 1 percent below where it was 36 months ago, suggesting that much of the correction has already occurred.
Price performance also varies by segment. Over the past year, the bottom 25 percent of the market has seen prices decline by about 3.4 percent, while the top 25 percent is nearly flat. This indicates that affordability constrained buyers remain under pressure, while higher end markets are stabilizing sooner.
Looking ahead, long term appreciation expectations help frame the Austin housing forecast. The Austin market’s 25 year compound appreciation rate is approximately 4.94 percent. If today’s median price represents the bottom of the cycle, it would take roughly 56 months, or until mid 2030, to return to prior peak values under normal appreciation conditions. This reinforces the idea that real estate recovery is typically measured in years, not months.
Finally, market efficiency remains below normal. The absorption rate, measured as sold listings divided by active listings, is just 15.62 percent compared to a historical average above 31 percent. The Market Flow Score sits at 5.56, below its long term average of 6.58. Together, these indicators show a market that is functioning, but slowly, with supply still dictating outcomes more than demand.
In summary, the Austin real estate market at the end of 2025 is stable but subdued. Inventory is elevated, pricing power favors buyers, and recovery will depend on sustained improvements in affordability and buyer confidence. For now, realistic pricing, patience, and data driven decision making remain essential for navigating today’s Austin housing market.
