As of Wednesday, December 24, 2025, active residential listings across the Austin area sit at 13,593 homes. While this is down meaningfully from the 2025 peak of 18,146 listings reached in late June, inventory remains elevated compared to last year. Active listings are up 15.2 percent year over year, signaling that the market continues to carry more supply than demand can comfortably absorb. This matters for both buyers and sellers because excess inventory tends to extend days on market, increase negotiation leverage for buyers, and pressure sellers to adjust pricing more quickly.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for Wednesday, December 24, 2025.
Price reductions remain a defining feature of the current Austin real estate environment. Today, 56.4 percent of all active listings have experienced at least one price drop. That means more than half of sellers have already revised expectations downward. This level of price adjustment is not typical of a strong or balanced market. Historically, widespread price reductions reflect a disconnect between initial list prices and what buyers are willing or able to pay. For sellers, this underscores the importance of pricing correctly from the start. For buyers, it reinforces that patience and negotiation remain effective strategies in today’s market.
Breaking down inventory further, new construction accounts for 4,064 active listings, while resale properties make up 9,529. New construction continues to play a large role in total supply, but resale inventory is where pricing friction is most visible. Builders can use incentives and financing tools to stimulate demand, while resale sellers are often more constrained, relying on outright price reductions to attract buyers.
New listings continue to flow into the market at a strong pace. Cumulative new listings from January through December total 49,638, which is up 4.4 percent year over year and more than 21 percent above the long term average. This is a critical data point. Even though active inventory has declined from its summer peak, sellers are still entering the market at historically high levels. This steady inflow of supply prevents inventory from tightening and limits the ability for prices to rebound quickly.
Pending listings tell a different story. Current pending listings total 3,280, which is down 7.8 percent compared to the same time last year. Cumulative pending transactions for the year stand at 43,169, down 2.3 percent year over year, even though this figure remains slightly above the historical average. The gap between new listings and pending sales continues to widen, creating a year to date difference of 6,469 homes. This imbalance confirms that supply is consistently outpacing demand.
The Activity Index, which measures the percentage of active listings going under contract, provides one of the clearest signals of market health. Today, the Austin market Activity Index is 19.4 percent, down from 23.2 percent last year. This represents a 16.1 percent decline in buyer engagement. In practical terms, fewer homes are converting to pending status relative to the number of homes available for sale.
When viewed through market phase classifications, resale activity is concentrated in weaker conditions. A significant share of the market now sits in the contraction or danger zone range, defined by Activity Index readings between 15 and 20 percent. An additional portion is already in the crisis or freeze zone below 15 percent. These ranges are associated with stalled transactions, rising inventory, and continued downward pressure on prices. Only a small fraction of the market remains in expansion or equilibrium phases.
The new listing to pending ratio further reinforces this picture. For December, the monthly ratio stands at 0.83. While this is close to the long term average, the year to date ratio is 0.74, well below the 25 year average of 0.82. Over time, ratios below the historical norm indicate that listings are accumulating faster than they are being absorbed. This pattern is consistent with what we see across inventory, pricing, and buyer activity data.
Months of inventory has risen accordingly. Austin now sits at 4.84 months of inventory, up from 4.14 months last year, a 16.8 percent increase. While this does not yet reflect extreme oversupply, it firmly places the market in a buyer leaning environment rather than a seller driven one. Resale specific months of inventory data shows many areas operating in buyer advantage or buyer control territory, where excess supply leads to longer marketing times and declining prices.
Sales activity provides additional context. In December, 2,387 homes closed across the Austin area. For the full year, cumulative sold properties total 30,184, down 3.9 percent year over year, though still above the long term average. However, when adjusted for population growth, sales per 100,000 residents are down 6.1 percent year over year and more than 20 percent below average. This highlights a key structural issue in the Austin housing forecast: population growth alone is no longer sufficient to drive proportional increases in home sales.
Pricing trends continue to reflect a market that is correcting from its 2022 peak. The average sold price in December is $594,257, down nearly 13 percent from the May 2022 peak of $681,939. The median sold price tells an even clearer story. At $440,000, the median price is down exactly 20 percent from the May 2022 peak of $550,000. This correction has been broad based, affecting most segments of the market.
Comparing price tiers reveals that lower priced homes are experiencing greater pressure. The bottom 25th percentile of homes saw prices decline 5.34 percent year over year, while the top 25th percentile declined just 0.13 percent. This divergence reflects affordability constraints, where entry level and mid range buyers are more sensitive to interest rates and monthly payments than higher income buyers.
From a longer term perspective, Austin’s 25 year compound annual appreciation rate of 4.886 percent provides important context. If the market has reached a pricing bottom near the current $440,000 median, it would take roughly five years, or until late 2030, to return to prior peak levels assuming historical appreciation rates. This projection highlights why short term expectations of rapid price recovery may be unrealistic.
Demand relative to supply remains subdued. The absorption rate, measured by the sold to active ratio, is currently 15.99 percent, well below the historical average of 31.58 percent. This confirms that inventory is turning over at roughly half the pace seen in healthier market conditions. Buyers remain selective, cautious, and highly price sensitive.
Interestingly, the Market Flow Score stands at 7.31, above its historical average of 6.59. This suggests that while overall demand is weaker, the market is still functioning efficiently in terms of transaction flow among motivated buyers and sellers. In other words, deals are happening, but primarily where pricing aligns closely with market realities.
For buyers, this Austin market update continues to favor patience, negotiation, and disciplined underwriting. Price reductions, seller concessions, and longer decision windows remain common. For sellers, success increasingly depends on realistic pricing, strong presentation, and understanding that the market is no longer forgiving of overpricing. For investors, the data points to continued opportunity in select segments, but also underscores the importance of conservative assumptions and long term horizons. For real estate agents, the environment rewards market knowledge, data driven guidance, and proactive communication.
As 2025 comes to a close, the Austin housing forecast remains defined by elevated supply, cautious demand, and a market still working through the excesses of the prior cycle. The data does not signal a collapse, but it clearly reflects a prolonged normalization process that is still underway.
