Austin’s housing market continues its slow correction as inventory builds, absorption weakens, and prices settle into a new post-pandemic baseline.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for October 21, 2025.
Market Overview
The Austin real estate market entered the final stretch of 2025 showing clear signs of deceleration. Active residential listings stand at 16,431, up 14.6% from last year and still only 9% below this summer’s peak of 18,146. This expansion in supply continues to tilt negotiating power toward buyers. Nearly 59% of all active listings have experienced at least one price reduction, a signal that sellers are adjusting expectations to meet slower demand.
Pending contracts, on the other hand, dropped to 3,946, down 5.3% year-over-year, confirming that buyer activity remains subdued even as more homes become available. The Activity Index—a measure of how many active listings are under contract—has slipped from 22.5% a year ago to 19.4% today, a 14% decline that places the market firmly in a contraction phase.
Housing Prices
Home prices have largely stabilized, but well below their 2022 highs. The median sold price sits at $445,000, down 19% from the May 2022 peak of $550,000. The average sold price of $595,763 represents a 12.6% drop from that same peak, equivalent to an $86,000 correction.
This decline has restored some affordability, but not enough to reignite demand at scale. Compared with prices from three years ago, today’s median remains 5.3% lower, meaning Austin’s housing market is still digesting the rapid appreciation from the pandemic boom.
Analysts at Team Price note that the long-term 25-year compound appreciation rate of 4.93% provides perspective. At that growth pace, it would take about 56 months—until May 2030—for prices to recover to their former peak near $551,000.
Regional Trends
The market’s cooling is not uniform. Some outer-ring cities like Georgetown, Liberty Hill, and Leander continue to expand supply at twice their pre-pandemic averages, while others—such as Cedar Park and Buda—have shown modest stabilization. City-by-city absorption data reveals that 10 cities and 26 ZIP codes are operating in the “contraction/danger zone” with Activity Index readings between 15% and 20%. Another 13 cities are below 15%, indicating a freeze-level slowdown where listings sit for extended periods and price reductions accelerate.
Only a handful of submarkets, such as portions of northwest Austin and pockets of Dripping Springs, remain in equilibrium—with Activity Index values near 25%–30%. These areas tend to be driven by limited resale inventory and strong school-district demand.
Supply and Demand Balance
The Months of Inventory (MOI) now stands at 5.81, up 14.1% from last October’s 5.09. This metric has steadily climbed for most of 2025, reflecting an ongoing mismatch between supply growth and buyer activity. Year-to-date, Austin’s inventory has risen 22.9%, with the City of Austin itself showing a modest 1.7% year-over-year increase.
To put that in historical context, the Austin market averaged roughly 3.0 to 3.5 months of inventory during the 2010s. At nearly six months, conditions now hover near the border between a neutral and buyer-leaning market.
The New Listing-to-Pending Ratio, another critical measure of balance, currently sits at 0.63 for the month and 0.71 year-to-date, below the 25-year average of 0.82. This means that for every 100 homes coming to market, only about 71 are going under contract—a clear indicator that listings are outpacing absorption.
Market Activity and Sales Volume
From January through October, Austin recorded 43,872 new listings, up 2.8% year-over-year and nearly 21% above the long-term average. However, cumulative pending sales have slipped 4.9%, totaling 36,498 for the year. Closed sales tell a similar story: 25,685 homes have sold year-to-date, down 3.1% from last year, but still 7.5% above the 25-year average.
When adjusted for population growth, the slowdown becomes clearer. Austin has seen 1,004 homes sold per 100,000 residents, down 5.4% from 2024 and 20.7% below the long-term norm. With more Realtors competing for fewer transactions, the sold-per-agent ratio has only improved 1.6% year-over-year but remains 23.5% below average, underscoring a highly competitive environment for agents.
Price Segmentation and Inequality
Price performance continues to vary sharply by tier. Homes in the bottom 25th percentile have fallen 3.3% in price and 5.9% in price per square foot since last October, while those in the top 25th percentile have gained 5% in price despite a small 0.6% decline in $/SqFt. This widening gap suggests that high-income buyers remain active, especially in areas with limited new construction, while first-time buyers face affordability constraints and tighter lending standards.
Market Efficiency and Flow
The Absorption Rate—the ratio of sold to active listings—stands at 17.6%, far below the historical average of 31.8%. This low reading means fewer than one in five active homes are selling in a given month.
The Market Flow Score (MFS), which combines multiple turnover and efficiency metrics into a 0-10 scale, currently reads 5.72 versus a historical norm of 6.59. This subdued score reinforces that Austin’s housing market is functioning at reduced speed, with excess supply and elongated time-on-market trends.
Forward Outlook
The data points to a market still recalibrating from the pandemic surge. Despite some seasonal improvement expected during early spring 2026, the underlying fundamentals suggest a long road back to equilibrium. Rising inventory, weak absorption, and moderate price compression point to a continued soft-landing correction, not a sharp recovery.
Buyers will find increasing leverage through winter, particularly for resale homes that have lingered 45+ days on the market. For sellers, realistic pricing and property condition matter more than ever. Investors should focus on cash-flow stability rather than speculative appreciation, as Austin’s price recovery timeline remains multi-year under current absorption rates.
The broader takeaway for agents and analysts alike: this is a data-driven market cycle where fundamentals—not hype—dictate outcomes. Austin has transitioned from the frenzied expansion of 2020–2021 to a cautious, efficiency-testing phase that will reward informed strategy and local expertise.
