Austin’s Inventory Builds, but Buyer Demand Lags Behind – August Begins with a Market in Waiting

As we begin the first week of August 2025, the Austin housing market continues to show signs of imbalance between supply and demand. Inventory remains high, buyer activity remains subdued, and price reductions are still widespread. While new listings keep outpacing pending contracts, the critical indicators continue to reinforce that we are in a fully transitioned buyer’s market. The market isn’t collapsing, but it’s not rebounding either. It’s holding its breath—and that pause is becoming increasingly measurable.

The number of active residential listings in the Austin-area MLS sits at 17,679, just 467 listings shy of the all-time high of 18,146 set on June 30, 2025. This inventory level reflects a 16.0% increase year-over-year from the 15,246 listings at this time in 2024. Even more notable: 58.7% of all active listings have had at least one price drop, indicating widespread seller concessions and a continued mismatch between asking prices and buyer willingness to engage. Sellers are adjusting—but not fast enough to reverse buyer hesitancy.

New listings year-to-date have now reached 33,990—up 7.7% from last year and a significant 28.2% above the 25-year average. That kind of surge in listing activity would typically reflect seller confidence or strategic timing, but in this market, it’s creating an oversupply problem. Pending listings are only modestly higher than last year, up just 2.5% with 4,295 current pendings. On a cumulative basis from January through July, pending contracts trail last year by 2.6% but remain 6.0% above the long-term average. This split—above-average new listings and subpar pending contracts—widens the gap between supply and demand.

The monthly new listing to pending ratio holds at 0.69, and the year-to-date ratio matches that number. Historically, the 25-year average sits at 0.82, so this current ratio further illustrates how many listings are being added for every contract written. In simple terms, the pipeline is backing up.

The Activity Index—a measure of buyer contract activity relative to inventory—stands at 19.5%, down from 21.6% at this time last year, reflecting a 9.4% year-over-year decline. In context, this is a significant metric. The Index was over 30% during pandemic-fueled boom years and hovered closer to 25% in neutral periods. We are now well below those levels, and the breakdown between product types confirms it: new construction homes have an Activity Index of 27.31%, while resale properties lag far behind at 16.70%. Builders are more willing—and able—to negotiate, while resales continue to struggle under the weight of price mismatches and outdated listings.

The supply-side pressure is even clearer when looking at Months of Inventory. As of August 4, Austin stands at 6.33 months of inventory, up 17.2% from 5.41 months at this time last year. By historical standards, this tips us firmly into buyer’s market territory. The increase in inventory levels is being driven not by a demand crash, but by consistent new listing volume and slow absorption. Inventory growth in the City of Austin itself is up 10.1% year-over-year and up 23.7% year-to-date—both signs that local sellers are feeling pressure to list, while buyers continue to sit on the sidelines.

Sales activity data confirms the market’s slower rhythm. July produced 2,390 closed residential sales, and cumulative sold properties from January to July total 17,583. That figure is 6.4% below last year, though it remains 5.9% above the 25-year average. On a per capita basis, the market looks even softer: cumulative sold properties per 100,000 population are at 689, which is down 8.6% from 2024 and sits 21.8% below the historical average. Similarly, per-realtor productivity has declined, with 944 sales per 1,000 agents, down 2.4% from last year and 25.7% below the long-term trend.

Price metrics continue to reflect the long, grinding nature of this correction. The average sold price is now $582,588—down from a peak of $681,939 in May 2022, representing a 14.57% decline or a $99,000 drop. The median sold price is $440,000, a 20.0% decline from the $550,000 peak, shedding $110,000 in value over 26 months. From a long-term perspective, we’re still within bounds. A compound 25-year appreciation rate of 4.886% would project the median to return to the $551,202 peak by May 2030. But that’s a long runway—59 months—and there’s no guarantee we’ll see linear growth in the interim.

When comparing current median sold prices to the same month three years ago, we’re down 14.56%, showing how far we’ve corrected even after accounting for the gains during the pandemic price run-up. Price behavior also varies depending on segment. Homes in the bottom 25th percentile have seen pricing fall -0.91% year-over-year and price-per-square-foot drop -4.41%, while top-tier homes saw a modest price increase of 1.67% but still saw a -2.32% drop in $/SqFt. That divergence indicates softness in the entry-level and a plateau in the luxury sector.

The Sold-to-Active Ratio, now sitting at 15.00%, continues to underline this buyer-dominant market. The long-term average is 31.85%, and anything below 10% generally marks a sluggish, buyer-favored environment. At 15%, we’re well below historical norms and firmly on the side of the buyers. This ratio, combined with the elevated inventory and lackluster contract activity, continues to pressure sellers to price more competitively and agents to adjust expectations.

Finally, the Market Flow Score (MFS)—a normalized index measuring market momentum—is at 3.75, compared to the historical average of 6.60. This score reinforces what every active buyer and seller is feeling: the market is dragging. Homes are sitting, negotiations are more frequent, and urgency has all but evaporated.

In summary, the Austin housing market continues to experience friction between listing velocity and actual absorption. While seller confidence is evident in the continued high rate of new listings, the buyer pool has not responded in kind. Instead, price cuts, longer days on market, and elevated inventory levels persist. Buyers are in control—but many are still waiting for the market to signal a true bottom.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for: August 4, 2025​