Austin Real Estate Market Update

Austin Real Estate Market Update – December 23, 2025

Active residential listings currently sit at 13,655, which is down from the mid year peak of 18,146 reached in late June, yet still 15.1 percent higher than this time last year. This matters because even after six months of gradual inventory drawdown, the market is still carrying significantly more supply than it did in 2024. That excess inventory continues to shape pricing behavior, negotiation dynamics, and buyer psychology across the region.

Price reductions remain widespread. Today, 56.6 percent of all active listings across the Austin area have experienced at least one price cut. When more than half of the market has already reduced pricing, it signals that original list prices were not aligned with buyer willingness to pay. For sellers, this reinforces the importance of accurate pricing from day one. For buyers, it confirms that negotiation leverage remains firmly in their favor. For investors and agents, it highlights that time on market risk is still elevated, particularly for resale homes.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for December 23, 2025.

The composition of inventory also tells an important story. Of the 13,655 active listings, 4,088 are new construction while 9,567 are resale homes. New construction continues to carry stronger activity metrics due to incentives, rate buydowns, and builder flexibility. Resale listings, by contrast, face greater competition and less pricing power. This divergence is visible throughout the Austin housing market and helps explain why resale sellers are feeling more pressure to adjust expectations.

New supply has not slowed. Cumulative new listings from January through December total 49,590, which is 4.3 percent higher than last year and more than 21 percent above the long term average. This confirms that homeowners remain willing to list despite slower demand. While some sellers are testing the market, many are responding to financial pressure, relocation needs, or investor exits. Elevated listing volume without matching buyer demand continues to reinforce a supply heavy environment.

On the demand side, pending listings remain weaker year over year. Current pending listings total 3,355, down 5.7 percent compared to last year. Cumulative pending activity for the year stands at 43,066, which is 2.5 percent lower year over year, even though it remains slightly above the long term average. This gap between new listings and pending contracts is one of the clearest indicators of ongoing imbalance. Year to date, new listings exceed pending contracts by 6,524 homes. In practical terms, that means inventory continues to build structurally even during seasonal slowdowns.

The Activity Index further reinforces this reality. The overall Activity Index for 2025 is 19.7 percent, down from 23.1 percent last year, representing a 14.5 percent decline in market engagement. Resale activity is especially weak at just 16.49 percent, which places a majority of resale markets in contraction or crisis territory. More than half of resale areas fall into the contraction danger zone where supply overwhelms demand and price declines become more likely. Over one third of resale markets are already classified in a crisis or freeze state, where buyer hesitation dominates decision making.

The new listing to pending ratio offers historical context. The monthly ratio currently sits at 0.81, while the year to date ratio is 0.74. The 25 year historical average is 0.82. When this ratio falls below the long term norm, it indicates that listings are entering the market faster than they are being absorbed. The current reading aligns closely with periods of past market stress rather than expansionary cycles. This is not a short term seasonal anomaly. It reflects a deeper affordability and confidence challenge.

Months of inventory continues to climb. The Austin market now sits at 4.86 months of inventory, up from 4.17 last year, a 16.5 percent increase. Resale inventory distribution shows that a growing share of the market has shifted into buyer advantage and buyer control territory. Areas with more than 270 days of inventory are no longer isolated outliers. They are becoming more common across outer markets and certain price bands.

Sales volume provides additional clarity. Total home sales for December reached 2,417, bringing cumulative sales for the year to 30,208. That figure is down 3.8 percent year over year, even though it remains above the long term average. When adjusted for population growth, the slowdown becomes more apparent. Sales per 100,000 residents are down 6.1 percent year over year and more than 20 percent below historical norms. This confirms that population growth alone is no longer sufficient to support prior price levels.

Pricing trends remain under pressure. The average sold price in December was $594,529, down nearly $87,000 from the May 2022 peak. That represents a 12.82 percent decline. Median sold price tells an even clearer story, currently sitting at $440,000, down exactly 20 percent from the $550,000 peak reached in 2022. Importantly, median prices remain 2.22 percent below where they were 36 months ago, confirming that the market has given back multiple years of appreciation.

Price behavior varies by segment. The bottom 25 percent of the market experienced a 5.41 percent year over year price decline, while the top 25 percent remained nearly flat. This split highlights that affordability constrained buyers are absorbing most of the adjustment, while higher end buyers remain more insulated. For investors focused on entry level or mid range homes, this trend deserves close attention.

Absorption remains weak. The sold to active ratio stands at 14.67 percent, far below the historical average of 31.57 percent. This metric is one of the clearest signals of market health. When fewer than 15 percent of active listings are selling in a given period, pricing power shifts decisively away from sellers.

Despite all of this, the Market Flow Score sits at 6.81, slightly above the historical average of 6.59. This suggests that while demand is limited, transactions that do occur are moving efficiently. In other words, serious buyers are still active, but the pool of buyers is smaller and more selective.

Looking forward, long term projections provide important context. Based on the Austin market’s 25 year compound appreciation rate of 4.886 percent, if today’s median price of $440,000 represents a cyclical bottom, it would take approximately 60 months to return to prior peak levels near $551,700. That places a full recovery around late 2030. This projection assumes stability and does not account for further downside risk if affordability or employment conditions weaken.

In summary, the Austin housing forecast remains defined by elevated supply, cautious demand, and ongoing price discovery. This is not a market positioned for rapid appreciation. It is a market that rewards patience, discipline, and realistic expectations. Buyers retain leverage, sellers must price aggressively to compete, and investors should remain selective and conservative in underwriting. The Austin real estate forecast continues to point toward normalization rather than acceleration as the market moves into 2026.

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FAQ SECTION

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Is the Austin housing market cooling in 2025?

Yes, the data clearly shows continued cooling across the Austin housing market. Active listings are up more than 15 percent year over year while pending sales are down nearly 6 percent. The Activity Index has fallen into contraction territory for most resale areas, indicating slower buyer engagement. These conditions reflect a market adjusting to affordability limits rather than one poised for immediate recovery.

Are home prices still falling in Austin?

Home prices remain under pressure, particularly in the lower and middle price ranges. The median sold price is down 20 percent from its 2022 peak, while the bottom quartile of homes experienced over a 5 percent year over year decline. Higher priced homes have been more stable, but overall pricing momentum remains weak. This suggests further sideways or downward movement is still possible.

Is now a good time to buy a home in Austin?

For buyers with stable income and long term plans, current conditions offer meaningful leverage. More than half of listings have already reduced price, inventory is elevated, and absorption rates remain low. Buyers have time to negotiate, request concessions, and walk away if terms do not align. However, buyers should not expect rapid appreciation in the near term.

What does the Austin real estate forecast look like for 2026?

The Austin real estate forecast points toward continued normalization rather than growth. Inventory remains above historical norms, demand remains constrained, and prices have not yet shown sustained upward momentum. While sales activity may stabilize, meaningful price appreciation is unlikely until affordability improves. The data suggests a multi year recovery path rather than a quick rebound.

How long will it take Austin home prices to recover?

Based on long term appreciation trends, a full return to prior peak median prices could take up to five years. Assuming a compound annual growth rate near 4.9 percent, prices would not reach 2022 levels until around 2030. This projection assumes no additional economic shocks and reinforces the importance of realistic expectations for sellers and investors.

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.