As of Monday, December 29, 2025, active residential listings across the Austin area stand at 13,457. While that number is well below the mid-year peak of 18,146 reached in late June, it remains meaningfully higher than last year. Active inventory is up 15.6 percent compared to December 2024, a reminder that supply pressures have not disappeared even though listings have pulled back from summer highs. More than half of all active listings, 56.2 percent, have recorded at least one price reduction, reinforcing that sellers are still competing for a limited pool of motivated buyers.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for December 29, 2025.
This elevated level of price adjustments continues to shape today’s Austin real estate environment. Sellers who entered the market with 2022 expectations are now confronting a reality where buyers are more deliberate, financing costs remain elevated, and affordability remains strained. The fact that nearly six out of ten listings have reduced their price signals that sellers are adjusting, but often later than the market would prefer. This delay continues to slow transaction velocity.
Inventory composition also matters. Of the 13,457 active listings, 4,037 are new construction while 9,420 are resale homes. New construction remains a meaningful portion of total supply, which has helped prevent a sharper inventory contraction. Builders have been more willing to offer incentives and price flexibility, which has supported activity in that segment and created competitive pressure on resale sellers who are less flexible.
New listings activity in 2025 remained historically elevated. From January through December, the Austin market recorded 49,716 new listings. That total is up 4.6 percent year over year and sits 22 percent above the long-term average. This sustained listing flow explains why inventory remains elevated despite a noticeable pullback from the summer peak. Sellers continue to test the market, even as absorption slows.
Pending listings tell a different story. Active pendings currently stand at 3,305, down 5.1 percent compared to this time last year. For the full year, cumulative pending listings totaled 43,277, a 2.1 percent decline year over year, although still 6.7 percent above the long-term average. This divergence between new listings and pending contracts is one of the clearest signals of today’s market imbalance. More homes are entering the market than are going under contract, which naturally pushes inventory higher and pricing lower.
The Activity Index, which measures the percentage of listings under contract relative to total available supply, highlights this slowdown even more clearly. The overall Activity Index for 2025 stands at 19.7 percent, down from 23.0 percent in 2024, representing a 14.4 percent decline year over year. Resale activity is notably weaker, with a resale Activity Index of just 16.7 percent. New construction continues to outperform with an Activity Index of 25.98 percent, reflecting stronger builder incentives and more aggressive pricing strategies.
When broken down into market phases, most resale segments fall into contraction or crisis categories. Roughly half of resale markets sit in the 15 to 20 percent Activity Index range, where sales stall, inventory builds, and price declines become more common. Another large portion has slipped below 15 percent, a level historically associated with buyer paralysis and accelerating price corrections. Very few areas are operating in balanced or expansionary conditions.
The New Listing to Pending Ratio provides further confirmation. For December, the monthly ratio sits at 0.84, while the year-to-date ratio stands at 0.74. The 25-year historical average is 0.82. A ratio below the long-term average means that listings are outpacing buyer commitments. Over the full year, new listings exceeded pending contracts by 6,439 homes. This surplus represents future inventory pressure unless buyer demand improves meaningfully.
Months of Inventory continues to drift higher. Austin closed December 2025 at 4.81 months of inventory, up from 4.14 months one year ago, an increase of 16.3 percent. While this level does not signal a distressed market, it clearly favors buyers more than sellers. Resale inventory tells an even more important story. Many resale submarkets now sit in buyer advantage or buyer control territory, defined as more than seven months of supply. In these areas, pricing power has firmly shifted away from sellers.
Sales volume reflects this cautious demand environment. The Austin area recorded 2,074 closed sales in December. For the full year, total sales reached 29,878, down 4.8 percent year over year but still 6.3 percent above the long-term average. When adjusted for population growth, the slowdown becomes clearer. Cumulative sales per 100,000 residents totaled 1,166, down 7.1 percent year over year and more than 21 percent below the historical average. Sales per 1,000 Realtors also remain depressed, highlighting intense competition among agents and fewer transactions per license holder.
Pricing continues to normalize after the historic run-up of 2020 through 2022. The average sold price in December was $588,234, down nearly $94,000 or 13.7 percent from the May 2022 peak. The median sold price closed the month at $439,900, representing a 20 percent decline, or roughly $110,000, from peak levels. Median prices remain 2.24 percent below where they were 36 months ago, a rare occurrence in Austin’s long-term history.
Price performance varies significantly by price tier. Over the past year, the bottom 25 percent of the market saw prices decline 4.39 percent, while the top 25 percent experienced modest growth of 0.79 percent. This divergence reflects affordability constraints and stronger demand resilience at higher price points where buyers are less sensitive to interest rates.
Despite slower sales and falling prices, not all indicators point to weakness. The absorption rate, calculated as sold listings divided by active listings, currently sits at 16.73 percent. While this is well below the historical average of 31.58 percent, it suggests steady movement rather than a complete freeze. More notably, the Market Flow Score stands at 7.49, above the historical average of 6.59. This indicates that while demand is selective, transactions that are priced correctly continue to move through the system efficiently.
Looking ahead, long-term appreciation math provides important context. Austin’s 25-year compound annual appreciation rate is approximately 4.885 percent. If current pricing represents a cyclical bottom near $439,900, it would take roughly 60 months, or until late 2030, to return to prior peak levels under normal appreciation conditions. This projection underscores why timing, patience, and realistic expectations matter for both buyers and sellers in the current Austin housing forecast.
For buyers, today’s market offers leverage, selection, and negotiating power that did not exist just a few years ago. For sellers, success hinges on pricing accurately from day one and understanding that the market rewards realism, not optimism. For investors, yield, cash flow, and long-term fundamentals matter far more than short-term appreciation assumptions. For agents, data fluency and honest guidance are no longer optional.
Austin real estate is not broken, but it is recalibrating. Inventory has normalized, pricing has corrected, and buyers are back in control of the decision-making process. As we move into 2026, the Austin housing market update makes one thing clear. The era of automatic appreciation is over, and the era of disciplined, data-driven decision-making has fully arrived.
