“Austin’s housing market continues to move through a late-cycle correction phase, where supply remains high, absorption rates lag, and pricing is stabilizing well below peak levels.”
Scroll down to view the full Austin Daily Real Estate Briefing PDF for October 10, 2025.
The Austin housing market on October 10, 2025, shows a clear picture of continued adjustment rather than recovery. Active residential listings stand at 16,521, up 13.9% year-over-year from 14,499 in October 2024. Nearly 59% of these listings have had at least one price drop, signaling sustained pressure on sellers to reposition pricing amid weaker buyer activity. The Activity Index, which tracks the ratio of pending to active listings, fell to 19%, placing the Austin real estate market firmly in the Contraction Zone—a condition where supply outpaces demand and price declines persist.
For context, the Activity Index was 22% last year and historically sits near 30% in balanced markets. This 13.6% annual decline underscores a slower pace of sales and the erosion of buyer urgency. Pending listings are 3,871, down 5.2% year-over-year, while cumulative pending transactions from January through October total 35,385, 7.8% lower than 2024 and essentially flat against long-term averages.
Market Overview
Austin’s housing inventory continues to expand relative to demand, extending buyer leverage deeper into the fall season. The Months of Inventory metric now sits at 5.82 months, up 13% year-over-year and well above the 25-year norm of roughly five months. For reference, Austin’s supply was 5.15 months last October, and the increase this year indicates homes are taking longer to sell as buyer activity remains subdued.
The imbalance between new listings and sales is another critical signal. The New Listing-to-Pending Ratio currently stands at 0.53, one of the lowest monthly readings since early 2011. Year-to-date, new listings total 42,697, while cumulative pendings lag by 7,312 units, producing a 0.71 annual ratio, compared with the 25-year average of 0.82. This divergence shows how many more homes are being added to inventory than are leaving it through accepted contracts—an unmistakable sign of oversupply.
In short, Austin’s housing supply is outpacing its absorption, and buyers continue to hold negotiating leverage. Sellers are being forced to make concessions, cut prices, or enhance value through incentives.
Housing Prices and Market Cycles
Price trends mirror this broader slowdown. The median sold price for October is $450,000, marking an 18.18% decline from the May 2022 peak of $550,000—a $100,000 reduction. The average sold price sits at $601,830, down 11.75% from its May 2022 peak of $681,939. On a long-term trajectory, Austin’s 25-year compound annual appreciation rate is 4.981%, suggesting that if the market’s current median represents a cycle bottom, it would take roughly 53 months (until February 2030) to regain a peak value of around $552,000 under normal appreciation conditions.
Notably, the correction has not been uniform across price bands. The top 25th percentile of listings saw a 3.31% year-over-year increase in median price, while the bottom 25th percentile dropped 3.82%. This indicates that higher-end buyers remain active, while entry-level affordability constraints and lending friction continue to weigh down the lower tiers.
Regional Trends
City-level data reveals a market that is uneven but trending softer across most areas. Inside the City of Austin, inventory has risen 21.6% year-to-date, while median prices are down 4.26% compared to three years prior. Georgetown, Liberty Hill, and Leander each show inventory gains of over 40% year-to-date, while smaller markets such as Cedar Creek and Smithville have seen inventory expand over 50%.
From a market phase perspective, only one city and two ZIP codes currently sit in the Expansion Zone (Activity Index above 30%). Twelve ZIP codes fall within Equilibrium (25–30%), while a combined 42 ZIP codes are split between the Contraction (15–20%) and Crisis (under 15%) zones. This dispersion highlights the deep segmentation in Austin’s housing market—where only isolated pockets maintain balance, while the broader metro remains oversupplied.
Market Efficiency and Turnover
The Market Flow Score (MFS)—a composite measure of absorption, velocity, and efficiency—currently registers 5.62, below the historical average of 6.59. This lower reading reflects sluggish transaction velocity and confirms that even with steady new listings, the market’s ability to process and close inventory has weakened.
Meanwhile, the Absorption Rate, defined as the ratio of sold homes to active inventory, has fallen to 17.44%, compared with a long-term average of 31.76%. This means less than one in five active listings is selling within a given period, another indicator of the ongoing imbalance favoring buyers.
Buyer and Seller Outlook
For buyers, this environment offers clear advantages: high inventory, motivated sellers, and slower competition. Negotiation leverage is strongest in the $400,000 to $600,000 range, where most of the market’s volume resides. Interest rates, while still elevated compared to pre-2022 levels, are being offset by price corrections that have returned affordability to early 2020 levels in several submarkets.
For sellers, the strategy is to price correctly from the outset. With nearly 59% of listings reducing price, buyers have become highly sensitive to perceived overpricing. Overambitious pricing strategies tend to result in longer market times and multiple reductions before receiving an offer.
For investors, today’s numbers mark the middle of a stabilization phase. While prices are well below 2022 peaks, volume remains steady enough to maintain rental demand, particularly in suburban markets where new construction supply is more controlled. Cash-flow investors are increasingly re-entering the market at current valuations, while short-term speculators remain sidelined.
Long-Term Forecast and Context
Austin’s real estate market is not collapsing—it’s rebalancing after one of the fastest appreciation runs in modern U.S. housing history. The flattening of cumulative new listings (+0.0% year-over-year) suggests supply may be nearing a plateau, while the absence of growth in pending contracts (-7.8%) indicates that demand has yet to rebound. Historically, markets like Austin recover once absorption rates rise above 25% and price reductions fall below 40%.
At today’s levels, Austin is roughly six to nine months away from a transition back toward balance—assuming inventory stabilizes below 16,000 and mortgage rates begin to moderate in early 2026. Until then, conditions will favor buyers and disciplined investors, while sellers must adapt to data-driven pricing and longer timelines.
