Austin Real Estate Market Update

Austin Real Estate Market Update – January 30, 2026

The Austin real estate market enters the end of January 2026 in a clearly slower and more supply-heavy position than last year, even as some headline numbers appear stable at first glance. Active residential listings now stand at 12,851, which is up 10.6 percent compared to the same point last year. While this is well below the June 2025 peak of 18,146 listings, the current level still represents a market with elevated choice for buyers and ongoing pressure for sellers. More than half of all active listings, 51.1 percent, have experienced at least one price reduction, confirming that pricing resistance remains a dominant theme across the Austin housing market.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for January 30, 2026.

When breaking down active inventory, resale listings continue to make up the majority at 8,854 homes, while new construction accounts for 3,997 listings. This split matters because demand dynamics remain very different between these two segments. New construction is showing an Activity Index of 27.0 percent, which places it closer to equilibrium conditions, while resale homes are operating at just 19.55 percent, squarely in the contraction range. This divergence explains why builders are often able to maintain incentives and absorption while individual resale sellers are facing longer timelines and more negotiation.

New listings activity so far this year totals 3,333 homes, which is down 12.9 percent year over year but still nearly 10 percent above the long-term average. This signals a market where sellers are slightly more cautious than last year, yet overall supply continues to replenish faster than demand. Pending listings tell the other side of the story. Pending contracts total 3,630, up only 1.5 percent from last year, with cumulative pending activity running 15.5 percent below last year and more than 9 percent below historical averages. In practical terms, fewer listings are converting into contracts at a normal pace.

The Activity Index, which measures the percentage of listings going under contract, confirms this imbalance. The overall Activity Index has declined from 23.5 percent last year to 22.0 percent today, a 6.4 percent drop. Historically, readings below 25 percent indicate a market that is slowing rather than expanding. Most resale areas across the region now fall into either the softening or contraction phases, with a growing number of zip codes approaching the danger zone where price pressure tends to accelerate. For buyers, this environment creates leverage. For sellers, it raises the cost of overpricing.

One of the clearest signals of imbalance is the new listing to pending ratio. On both a monthly and year-to-date basis, this ratio sits at 0.67, well below the 25-year average of 0.82. This means that for every new listing coming to market, only about two-thirds are finding a buyer in a reasonable timeframe. The cumulative difference between new listings and pending contracts now stands at 694 homes, reinforcing the idea that inventory is continuing to stack up rather than clear.

Months of inventory provides another important lens. Overall months of inventory have risen to 4.57, up from 4.07 a year ago, representing a 12.1 percent increase. While this level does not suggest a crisis, it does firmly place the market in buyer-advantaged territory. When looking specifically at resale homes, the picture becomes even more pronounced. A full 67 percent of resale markets fall into the buyer control category, defined as more than 270 days of inventory. In these areas, sellers typically need aggressive pricing, strong condition, and flexibility on terms to attract serious buyers.

Sales activity further supports this narrative. Total sold properties year to date number 1,633, down 13.1 percent year over year, though still slightly above the long-term average. On a per-capita basis, sales density is weak. Cumulative sold homes per 100,000 residents sits at 61, which is 15 percent lower than last year and more than 23 percent below historical norms. Sales per 1,000 Realtors are also down nearly 20 percent from average levels, underscoring how competitive and difficult the current environment is for agents.

Price trends continue to reflect the longer correction that began after the 2022 peak. The average sold price for January is $561,265, down 17.7 percent from the May 2022 peak of $681,939. Median sold price paints an even clearer picture, now at $417,000, representing a 24.18 percent drop from the $550,000 peak. Compared to prices from 36 months ago, the median is still down more than 7 percent, confirming that this is not a short-term fluctuation but a sustained reset.

Importantly, price behavior is not uniform across the market. The bottom 25 percent of homes saw prices decline 6.83 percent year over year, while the top 25 percent actually experienced a modest 2.58 percent increase. This widening gap reflects a bifurcated market where higher-quality, well-located homes are holding value better, while entry-level and overbuilt segments remain under pressure. City-level data reinforces this trend, with only seven cities posting year-over-year median price gains while twenty-three are still declining.

From a valuation standpoint, the Home Value Index shows that roughly 73 percent of tracked cities are still considered overvalued relative to long-term norms, with only a small share appearing undervalued. This suggests that even after significant price corrections, the Austin housing market has not fully normalized across most submarkets.

Demand indicators remain subdued. The absorption rate, defined as sold listings divided by active listings, is just 11.69 percent, far below the historical average of 31.53 percent. This low absorption rate indicates that inventory is turning slowly and buyers remain selective. The Market Flow Score, which combines multiple turnover and efficiency metrics, currently sits at 1.47 on a scale where the historical average is 6.57. Scores at this level are consistent with sluggish markets where supply outweighs demand and momentum is weak.

Looking ahead, long-term projections provide important context. Assuming the market has reached or is near its cyclical bottom at today’s median price of $417,000, and assuming Austin returns to its 25-year compound appreciation rate of 4.478 percent, it would take approximately 77 months, or until around May 2032, for prices to recover to their prior peak near $550,000. This projection highlights why expectations for rapid appreciation in the near term are misaligned with historical reality.

For buyers, today’s Austin housing market offers leverage, choice, and negotiating power that has not existed for several years. Price reductions are common, inventory is elevated, and time is on the buyer’s side. For sellers, success requires precision. Homes that are priced correctly and prepared well can still sell, but the margin for error is thin. For investors and agents, the current environment rewards data literacy, patience, and realistic underwriting rather than speculative assumptions.

The Austin real estate market is not collapsing, but it is clearly recalibrating. Supply has eased from its peak, yet demand has not rebounded enough to restore balance. Until absorption improves and inventory clears more efficiently, conditions will continue to favor buyers and disciplined participants who align expectations with data rather than headlines.

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FAQ SECTION

Is the Austin housing market favoring buyers or sellers right now?

The Austin housing market currently favors buyers. Active listings are up more than 10 percent year over year, over half of listings have had price drops, and months of inventory has increased to 4.57. These conditions give buyers more options and negotiating leverage than in recent years. Sellers can still succeed, but only with accurate pricing and strong preparation.

Why are so many Austin homes having price reductions?

Price reductions are happening because supply continues to exceed demand. The new listing to pending ratio is 0.67, well below the long-term average, meaning fewer homes are going under contract relative to new listings. As inventory builds and buyers remain selective, sellers are adjusting prices to stay competitive. This is a typical behavior during market rebalancing periods.

How far have Austin home prices fallen from the peak?

Median home prices in Austin are down about 24 percent from the May 2022 peak. Average prices are down nearly 18 percent from the same period. While this correction has been meaningful, prices in many cities are still above long-term historical valuation norms. This suggests further stabilization rather than rapid appreciation in the near term.

Is new construction performing better than resale homes?

Yes, new construction is showing stronger relative performance. The Activity Index for new construction is 27 percent, which is closer to balanced market conditions, while resale homes are at 19.55 percent, indicating contraction. Builders often use incentives and pricing flexibility to maintain absorption, while resale sellers rely more on price cuts. This creates different strategies for buyers depending on the segment.

When could Austin home prices return to their prior peak?

Based on long-term appreciation trends, it could take over six years for prices to return to their previous peak. Assuming a 4.478 percent annual growth rate, a recovery to peak median prices would likely occur around 2032. This projection highlights the importance of long-term planning rather than short-term speculation. Buyers and investors should evaluate purchases based on fundamentals, not rapid appreciation expectations.

Have a Question or Want to Dive Deeper?

If you’d like a custom breakdown of the data, want help interpreting today’s market trends, or just have a question about buying or selling in Austin, let us know. Fill out the form below and a member of our team will get back to you promptly.