A rare moment of standoff: Listings grow, prices fall, and buyers pause—welcome to the slow churn of Austin’s rebalancing market.

The Austin housing market continues its slow but steady correction, as today's data paints a picture of an inventory-rich environment with persistent price pressure and uneven demand. As of August 5, 2025, there are 17,559 active residential listings—just 587 shy of the all-time high recorded on June 30. What makes this number significant isn’t just its historical magnitude, but the fact that 58.7% of these active listings have had at least one price drop, reinforcing the fact that sellers are having to adjust expectations as leverage shifts toward the buy side.

The increase in inventory isn’t purely a seasonal bump. Compared to this time last year, active listings are up 16.1%, with year-to-date new listings reaching 33,990—a 7.7% increase over 2024 and a 28.2% rise above the 25-year average. These are not modest gains; they suggest confidence or urgency among sellers, possibly driven by rising holding costs, shifting financial positions, or an acknowledgment that market conditions may not improve in the near term. At the same time, buyer activity remains restrained. Pending listings are up just 1.7% year over year, and cumulative pending contracts for the year trail last year’s numbers by 2.4%.

This disconnect between listing volume and buyer action is most evident in the new listing-to-pending ratio. For 2025 so far, that figure sits at 0.69—well below the 25-year average of 0.82. In other words, for every 100 new listings coming to market, only 69 are going under contract. This sustained imbalance signals that absorption rates are slipping, and market velocity is softening.

The Activity Index, which quantifies real-time market momentum, confirms this slower pace. It currently sits at 19.5%, down from 21.7% a year ago—a 10% drop. Resale listings are particularly sluggish with an index of 16.72%, while new construction is faring better at 27.20%. New builds are drawing more attention from buyers, likely due to builder incentives and move-in readiness. Resale sellers, however, face stiffer competition, often lacking the same perks and margin flexibility.

Months of Inventory has now reached 6.26, up 17.1% from last year. For context, a balanced market typically hovers around 6 months of inventory. At this level, the Austin market has officially tipped into buyer-favored territory. In several submarkets, inventory levels are even more inflated—Smithville, Dale, and Spicewood all now sit at 11 months, while areas like Burnet, Lago Vista, and Marble Falls also approach or exceed 10 months. Only a handful of areas—Buda, Lockhart, and Hutto—remain closer to seller-neutral territory.

Sales volume reinforces the story of a market grinding through a correction. In July, only 2,494 homes sold across the region. Year-to-date, Austin has recorded 17,694 closed transactions, down 5.8% compared to the same period in 2024. Despite this drop, the 2025 sales count is still 6.5% above the long-term average—indicating that while demand has softened, it hasn’t collapsed.

However, sales activity per capita tells a more concerning story. So far this year, 694 homes have sold per 100,000 residents—an 8% decline from last year and a full 21.3% below the historical average. When indexed to agent population, the numbers also trend downward. Only 950 sales per 1,000 REALTORS® have closed YTD, which is 1.8% below last year and 25.3% below average. These figures suggest that while listings are increasing, the buyer pool is thinning, and agents are working harder for fewer deals.

Pricing data confirms the continued downward pull. The average sales price now sits at $576,917, down $105,000 or 15.4% from the May 2022 peak. The median sales price is even more affected—now at $435,000, a 20.9% decline from its $550,000 peak. In real terms, that’s a $115,000 drop. When comparing current median prices to three years prior, the Austin market is down 15.53%. This makes Austin one of the few large markets in the country to have experienced such a pronounced three-year backslide.

Price performance differs depending on price tier. Over the past year, the top 25% of homes saw slight appreciation of 1.38%, while their price per square foot actually declined by 2.53%. Meanwhile, the bottom 25% experienced a 0.91% price decline and a steeper 4.62% drop in price per square foot. These figures highlight that luxury buyers are holding steadier—perhaps buoyed by cash reserves or discretionary purchasing—while affordability-challenged segments are taking the brunt of the downturn.

Zooming out, Team Price’s 25-year market projection gives us a long-term lens: If this $435,000 median marks the true bottom, and we assume a 4.838% compound annual appreciation, it would take 62 months—until August 2030—to return to the peak value of $550,000. That’s over five years of steady appreciation just to get back to where we were in 2022. This is not a doomsday scenario, but it underscores that housing cycles are long and corrective phases require patience.

Absorption indicators echo this message. The Sold-to-Active ratio now stands at 15.56%, far below the historical norm of 31.88%. When less than 20% of active inventory is turning over monthly, it's clear that many listings are simply sitting. Similarly, the Market Flow Score—an index measuring supply-demand velocity—currently sits at 4.04. That’s 39% below its historical average of 6.61, indicating that the market is heavily supply-weighted and lacking urgency from buyers.

In short, the Austin real estate market is experiencing a structural shift. The frenzy of 2021 and early 2022 has fully burned off. We are now in the middle innings of a classic rebalancing—one marked by more listings, more price adjustments, and longer days on market. While builder inventory is helping keep the pipeline moving, resale sellers must come to terms with the fact that buyers have options—and many are choosing to wait, negotiate harder, or pivot toward rentals.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for: August 5, 2025.