The Austin real estate market enters February with conditions that continue to favor buyers more than sellers, while offering investors and agents a clearer view of where pricing and demand truly sit. Active residential listings currently stand at 12,807 homes, up 10.2 percent from this time last year. While this is well below the prior inventory peak of 18,146 reached in June 2025, it remains elevated enough to create meaningful competition among sellers. More than half of all active listings have already experienced at least one price drop, which confirms that pricing remains the primary lever sellers must adjust to generate activity.
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This inventory is not evenly distributed. Of the 12,807 active listings, 4,054 are new construction while 8,753 are resale homes. New construction continues to post higher activity levels, with an Activity Index near 26 percent, while resale activity lags at just under 20 percent. That spread matters because it shows where demand is still flowing and where friction remains. Builders continue to offer incentives and flexible pricing, which helps sustain absorption. Resale sellers do not have that same flexibility and must compete directly with both builders and other resale listings.
New listing activity year to date reflects a market that is active, but not overheated. Cumulative new listings from January through early February total 3,633 homes. That figure is down 5.1 percent from last year, yet still nearly 20 percent above the long term average. This means sellers are participating, but they are entering a market that already has excess supply. The result is slower absorption and longer decision timelines for buyers.
Pending listings tell a similar story. Current pending listings total 3,568 homes, up just 1.0 percent year over year. On a cumulative basis, pending sales are down 9.0 percent compared to last year and sit 2.5 percent below the historical average. Demand has not disappeared, but it has clearly cooled. Buyers are active, yet selective, and they are moving at a pace that reflects both affordability constraints and broader economic uncertainty.
The Activity Index, which measures the percentage of active listings going under contract, continues to trend lower. Overall activity stands at 21.8 percent, down from 23.3 percent one year ago. This places much of the resale market in the softening and contraction phases. A growing share of homes are now operating in zones where supply outweighs demand and price reductions become more common. Nearly 43 percent of resale listings fall into conditions associated with buyer paralysis or accelerated price correction, a sharp contrast to the market dynamics seen during the peak years.
One of the clearest indicators of imbalance is the new listing to pending ratio. The current monthly ratio is 0.66, meaning there are roughly three new listings for every two homes going under contract. Historically, the Austin market averages closer to 0.82. Year to date, the cumulative difference between new listings and pending sales stands at 791 homes. This widening gap reflects growing excess inventory and reinforces the negotiating advantage buyers now hold.
Months of inventory further confirms this shift. Austin currently sits at 4.57 months of inventory, up 12.3 percent from last year. While this level does not yet indicate severe distress, it firmly places the market in a balanced to buyer leaning environment. When isolating resale inventory, a significant portion of the market now exceeds 210 days of supply, which historically aligns with buyer advantage or outright buyer control conditions. Sellers in these segments must price competitively and remain flexible to achieve a sale.
Sales volume remains under pressure. Total sold properties for January came in at 1,456, down 22.6 percent from last year and slightly below the long term average. When adjusted for population growth, sales per 100,000 residents are down more than 24 percent year over year. On a per agent basis, productivity is also lower, with sales per 1,000 Realtors down 17.1 percent. These metrics highlight how the market slowdown is being felt across buyers, sellers, and industry professionals alike.
Pricing trends continue to normalize after the sharp run up of 2020 through 2022. The average sold price in January was $549,362, down nearly 19.5 percent from the May 2022 peak. The median sold price tells an even clearer story, currently at $409,990, which is more than 25 percent below the peak of $550,000. Compared to 36 months ago, median prices are down nearly 9 percent, signaling that the market has not only corrected but has reset closer to historical norms.
Price performance varies significantly across price tiers. Over the past year, the bottom quartile of the market has seen prices decline by about 5 percent, while the top quartile has posted modest gains of just over 3 percent. This divergence suggests that affordability constrained segments continue to face pressure, while higher end buyers remain more insulated. Even so, most cities across the Austin metro are still down year over year, with only a small handful showing price appreciation.
Long term projections provide important context for buyers and investors. Assuming the market has reached a cyclical bottom near current median price levels and resumes its historical compound appreciation rate of approximately 4.4 percent annually, it would take roughly 83 months for prices to return to prior peak levels. That timeline points to late 2032 as a reasonable expectation for full price recovery, assuming no major economic disruptions. This reinforces the idea that short term speculation is risky, while long term ownership remains a more stable strategy.
Demand relative to supply remains subdued. The current absorption rate, defined as sold listings divided by active listings, sits at 13.25 percent. Historically, Austin averages closer to 31.5 percent. This lower absorption rate confirms that inventory is turning over more slowly and that sellers cannot rely on market momentum alone. The Market Flow Score, which combines multiple efficiency metrics, currently reads 2.25 compared to a long term average of 6.58. In practical terms, the market is operating at roughly one third of its typical efficiency.
For buyers, this environment offers leverage, options, and time. Negotiations are common, price reductions are widespread, and inventory levels provide meaningful choice. For sellers, success hinges on realistic pricing, strong presentation, and a willingness to adjust quickly. For investors, the data supports a disciplined, long term approach rather than short term appreciation expectations. For agents, the market demands stronger advisory skills, data driven guidance, and clear communication with clients.
The Austin housing market has moved into a phase defined less by emotion and more by fundamentals. Supply, demand, pricing, and time are once again aligned with historical patterns. While the path forward may feel slower, it is also more predictable, which ultimately creates a healthier foundation for the next cycle.
