Active residential listings currently stand at 13,813, which is 15.0 percent higher than this time last year. While that figure is down 4,333 listings from the June 2025 peak of 18,146, inventory levels remain well above what the market absorbed comfortably in prior cycles. This pullback from the summer high is seasonal, not structural, and does not yet indicate a meaningful tightening of supply.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for December 19, 2025.
More than half of all active listings, specifically 56.5 percent, have already experienced at least one price reduction. That number alone tells a clear story. Sellers are still anchored to yesterday’s pricing expectations, while buyers are operating based on today’s affordability realities. In a healthy, balanced Austin housing market, price drops tend to cluster closer to one third of listings. When more than half of homes require reductions, it reflects persistent resistance at current price levels.
The composition of inventory also matters. Of the 13,813 active listings, 4,091 are new construction and 9,722 are resale homes. Builders remain a major source of supply pressure, often competing aggressively on incentives and pricing, which continues to ripple through the resale market. Resale sellers are increasingly forced to match builder concessions indirectly through price cuts, closing cost credits, or extended days on market.
New listings have not slowed. Cumulative new listings from January through December now total 49,381, which is up 3.9 percent year over year and more than 21 percent above the long term average. This is a critical data point for anyone watching the Austin housing forecast. Even though total inventory has come down from its peak, fresh supply continues to enter the system at a pace that exceeds historical norms. That keeps downward pressure on pricing and extends the timeline for market normalization.
Pending listings continue to tell the other half of the story. Active contracts currently total 3,499, which is down 5.4 percent from last year. New construction accounts for 1,529 of those pendings, while resale makes up 1,970. Cumulatively, pendings year to date sit at 42,764, down 3.2 percent year over year, but still slightly above the long term average. Buyers are active, but they are selective, patient, and far less reactive than they were during the 2020 to 2022 cycle.
This imbalance between new supply and buyer absorption shows up clearly in the Activity Index. The overall Activity Index has declined from 23.5 percent in 2024 to 20.2 percent in 2025, a 14.1 percent drop year over year. New construction activity remains stronger at 27.21 percent, while resale activity lags at just 16.85 percent. That gap is meaningful. Builders can adjust pricing faster and offer incentives that resale sellers cannot always match, keeping resale demand under pressure.
When the resale Activity Index is mapped against market phases, the results are sobering. Nearly half of resale markets fall into the contraction or danger zone range of 15 to 20 percent, while another 40 percent sit in the crisis or freeze category below 15 percent. These are conditions where buyer hesitation dominates, homes sit longer, and price discovery happens slowly and often painfully for sellers. This is not a market that supports aggressive pricing strategies without strong justification.
The new listing to pending ratio reinforces this narrative. The current monthly ratio is 0.77, and the year to date ratio is 0.73, both well below the 25 year average of 0.82. Historically, ratios below the long term average signal that listings are accumulating faster than contracts are being written. Over the course of 2025, new listings have exceeded pending listings by 6,617 homes. That cumulative gap represents excess inventory that must eventually be absorbed through time, pricing adjustments, or both.
Months of inventory continues to trend higher. The Austin market now sits at 4.91 months of inventory, up from 4.23 months last year, a 16.1 percent increase. While this is not yet an extreme oversupply, it firmly places the market outside seller dominated conditions. In the resale segment specifically, a growing share of cities now fall into buyer advantage or buyer control categories, where inventory exceeds 210 days of supply. These are environments where buyers can negotiate price, repairs, and terms with far more leverage than in recent years.
Sales activity reflects this slower environment. December recorded 2,507 closed sales, bringing the cumulative total for the year to 30,286 transactions. That is down 3.5 percent year over year but still about 7.7 percent above the long term average. This nuance matters. The Austin housing market is not frozen, but it is operating below its population adjusted capacity. Sales per 100,000 residents are down nearly 6 percent year over year and more than 20 percent below average. This suggests that population growth alone is no longer sufficient to drive housing demand without affordability improvements.
Pricing trends continue to normalize. The average sold price in December came in at $602,427, down roughly $80,000 from the May 2022 peak of $681,939. Median pricing tells an even clearer story. The median sold price now stands at $449,000, down $101,000 or 18.36 percent from its 2022 high. This reset has pushed prices back to levels more consistent with historical affordability constraints, although monthly payments remain elevated due to higher interest rates.
When comparing current median prices to those from 36 months prior, the market is essentially flat, down just 0.22 percent. This highlights how much of the past three years has been about giving back excess appreciation rather than entering a prolonged collapse. From a long term perspective, Austin real estate still benefits from a 25 year compound annual appreciation rate of 4.971 percent. If current pricing represents the bottom of the correction, a return to prior peak values would likely require roughly 54 months, placing a full recovery closer to 2030 rather than in the near term.
Price pressure is not evenly distributed. The bottom quartile of homes has seen year over year price declines of nearly 4 percent, while the top quartile has experienced relatively modest declines under 1 percent. This indicates that affordability constraints are hitting entry level and mid range buyers harder, while higher priced segments remain somewhat insulated due to stronger equity positions and discretionary demand.
Market efficiency metrics support this cautious outlook. The absorption rate, measured by the sold to active ratio, currently sits at 15.69 percent, roughly half of the historical average of 31.64 percent. This means a much smaller share of available homes are selling in any given period. The Market Flow Score stands at 5.60, below its long term average of 6.58, confirming that inventory turnover remains sluggish and supply heavy.
For buyers, this Austin market update confirms that patience and leverage remain firmly on their side. Negotiation opportunities persist, particularly in resale homes competing with new construction. For sellers, the data is equally clear. Pricing correctly from day one is no longer optional, and chasing the market downward remains a real risk. Investors should expect continued uneven performance by price tier and location, with returns increasingly driven by basis and cash flow rather than appreciation alone.
As the year closes, the Austin housing forecast points toward a market still working through excess supply, slower demand, and recalibrated expectations. Stabilization will come, but it will require time, realistic pricing, and sustained absorption before the next growth phase begins.
