The Austin housing market continues to navigate a transition phase that reflects rising inventory, slower absorption, and pricing pressure concentrated in the resale sector. While active listings remain lower than the summer peak, today’s numbers confirm that the supply side is still outpacing demand. Buyers retain leverage, sellers must compete more strategically, and investors should be watching inventory velocity closely. The market is not collapsing, but it is clearly reorganizing—driven more by supply imbalance than by a sudden drop in demand.
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Active residential listings sit at 15,215 today, down from the peak of 18,146 reached on June 30, 2025. This is still 14.4 percent higher than the same point last year, and 58 percent of listings have had at least one price reduction. When inventory rises at this pace without a corresponding lift in pending contracts, pricing power shifts away from sellers. That shift is evident in the Activity Index, currently at 20.3 percent compared to 22.7 percent last year. This drop of 10.4 percent places the market squarely in the softening-to-contraction phase, particularly in the resale sector where the current index of 17.43 percent positions it in the “Contraction / Danger Zone” category. New construction, however, continues to outperform resale at 27.01 percent, nearly 10 full percentage points higher, reinforcing the trend that builders are absorbing higher volumes even while offering deeper concessions.
Pending listings are nearly flat year over year at 3,883, down only 0.6 percent, but the spread between new listings and pending contracts continues to widen. Year-to-date, there have been 47,543 new listings and 40,501 pending transactions, a delta of 7,042. Historically, that gap should be closer to the 25-year average ratio of 0.82. Instead, the current ratio for 2025 is 0.72, clearly below normative absorption levels. In other words, supply is expanding, but demand is not accelerating to match. That trend is also consistent with a cumulative pending decrease of 2.3 percent year over year, suggesting buyer fatigue or simply longer decision timelines.
Months of Inventory now sits at 5.41 compared to 4.66 this time last year, a year-over-year increase of 16.1 percent. This shift pushes the market into clear buyer advantage territory for resale properties. Only 10 percent of the market falls under “Seller Acceleration,” while 60 percent is positioned in the “Contraction / Danger Zone,” where extended days on market and downward pressure on pricing are most persistent. The implications are simple: buyers have greater leverage, concessions are expected, and pricing discipline is required on listings above the median threshold.
Looking at actual sales performance, there were 2,216 closed transactions reported in the latest month. Cumulative sales from January through November total 27,922, down 3.2 percent year over year. While that volume is still 7.9 percent above the long-term average, it does not reflect meaningful momentum. The reduction in sales per population is more telling: cumulative sold properties per 100,000 residents is down 5.5 percent year over year and 20.4 percent below the historical average, highlighting demand weakness at the household level. Sales per one thousand realtors are up slightly by 1.4 percent, but still remain significantly below average, indicating competitive pressure among agents in a slower conversion cycle.
Price trends confirm the latter half of the correction phase. The current average sold price is $588,488, down 13.7 percent from the May 2022 peak of $681,939. The median sold price sits at $444,965, nearly 19.1 percent below the peak of $550,000. Tracking price change compared to three years prior, we are currently at negative 3.27 percent, pointing to broader affordability concerns that have not yet reversed. At the standard rate of 4.933 percent annual compound appreciation, it would take an estimated 56 months—targeting June 2030—for prices to return to the former peak. That assumes no secondary correction occurs before a long-run normalization cycle takes hold.
Absorption rate, calculated as sold properties divided by actives, now sits at 16.67 percent, down from the historical average of 31.70 percent. This metric is one of the clearest illustrations of where the market stands. When nearly one out of three listings would typically sell within a period and only one out of six does now, it indicates a clear slowdown in transactional turnover. The Market Flow Score reinforces this positioning, reporting a value of 4.80 compared to the historical average of 6.59. The momentum curve is pointing downward, aligning with the direction of the Activity Index and Months of Inventory.
Regionally, performance bifurcation continues. The top 25th percentile price segment is up 7.44 percent year over year, indicating resilience in higher-tier homes where demand is less rate-sensitive. In contrast, the bottom 25th percentile is up only 1.68 percent, and square-foot pricing for the lower-tier segment is down 1.46 percent. This confirms pressure in the affordability-focused segments, where buyer payment power has been most impacted by lending conditions. If inventory accelerates into Q1 2026, lower-tier properties will continue to lead downward pricing adjustments.
For buyers, today’s conditions provide the best negotiation environment since 2019. With higher inventory, slower turnover, and more than half of listings already experiencing price reductions, strategic buyers can find leverage without aggressive competition. For sellers, pricing ahead of the market rather than following it is essential. Listing too high and reacting after a price cut is proving costly in the current climate. Sellers engaging with buyers in the first 14 days have the highest probability of achieving stronger terms, but that window has narrowed materially.
Investors should weigh long-term fundamentals. Population trends, migration trajectory, and long-range rate forecasts support slow recovery once the market stabilizes. Acquisition strategy should be aligned with cash flow sustainability first, appreciation second. Inventory growth remaining above 20 percent YoY into early 2026 could provide additional opportunity windows, particularly in suburbs prone to price reductions.
For real estate agents, guiding clients through this data is critical. While market energy is not accelerating, it is also not deteriorating rapidly. Instead, it is reorganizing into a new cyclical pattern where supply-side adjustments dictate trajectory more than demand surges. The key driver to monitor is inventory through Q1 2026. If supply breaches the 20,000 level, resale pricing will face increased pressure, particularly as builders continue to undercut on base price and escalate incentives.
Austin real estate now sits at a pivotal moment. Today's housing landscape is shaped by supply imbalance, sub-average absorption, and moderate pricing retreat. While the market does not exhibit crisis characteristics, it remains firmly in a correction phase until turnover accelerates or inventory trends reverse. The correction is flattening, but not over. This equilibrium phase will continue until pricing fully realigns with affordability thresholds and Activity Index readings move back to 25 percent or higher.
