Austin Real Estate Market Analysis – June 23, 2025

"Historic Inventory, Tepid Demand, and the Long Road to Price Recovery Define the Austin Market"

The Austin housing market continues to present a textbook example of a supply-heavy, buyer-favoring environment. As of today, June 23, 2025, active residential listings have surged to a record-breaking 17,937 properties, marking the highest inventory level ever recorded in the Austin area. This eclipses the previous high set just three days prior, reflecting the persistent, unrelenting influx of new listings. What makes this figure even more significant is not just the raw count, but the underlying market mechanics contributing to this excess—sluggish demand, buyer hesitancy, and price corrections all converge to create one of the most challenging environments for sellers in over a decade.

The Activity Index, a key indicator of market velocity and demand, underscores this dynamic. Sitting at 20.4%, the index is down nearly 16% from this time last year when it stood at 24.2%. To put this in perspective, the current Activity Index signals that only around one in five available properties is going under contract within a reasonable timeframe, a clear reflection of diminished buyer urgency. This weakening of demand is compounded by the fact that over 55.7% of active listings have experienced price reductions, further highlighting seller difficulty in achieving their initial price expectations.

Months of Inventory (MOI) tells a similar story. Now at 6.38 months, MOI has increased 18.5% from June 2024, when it sat at 5.38 months. By established industry standards, any market exceeding six months of inventory shifts decisively in favor of buyers. With the current level exceeding that threshold, and inventory growth showing no signs of abating, Austin has officially transitioned into a buyer's market in broad regional terms. This condition is even more acute in some surrounding cities, with Marble Falls, Dale, and Spicewood seeing double-digit months of inventory, reflecting near-stagnant market conditions.

The supply-demand imbalance is most evident in the New Listing to Pending Ratios. Year-to-date, this ratio stands at 0.66, meaning for every 100 new listings entering the market, only 66 are going under contract. Historically, the 25-year average for this metric in Austin is 0.81. Today's figure not only reflects a substantial divergence from historical norms but also confirms the growing chasm between seller expectations and buyer participation. In pure numeric terms, this has translated into a year-to-date cumulative difference of 6,869 more new listings than pending contracts, the widest gap since 2004 when the market similarly experienced a significant supply surge.

Pending sales, a direct reflection of buyer action, remain subdued. June 2025 pending contracts total 4,606, representing a 5.7% decline from the same period in 2024. Cumulatively, pending sales for the year are 10.5% below 2024 levels and nearly 1% below the long-term average. This weak contract activity, coupled with surging new listings, underscores a market struggling to find equilibrium.

Sales density data paints an even more sobering picture for sellers. Through June 2025, the Austin area has recorded 14,765 closed sales, down 7.6% year-over-year and significantly below peak transaction volumes seen during the height of the pandemic-fueled housing surge. More importantly, when adjusted for population growth and agent count, the market's efficiency metrics are alarming. Cumulative sold properties per 100,000 residents are 21% below the long-term average, while sales per 1,000 Realtors are down 25.2%. These figures highlight the increasingly competitive environment for both sellers and real estate professionals, with more listings, fewer buyers, and increased reliance on price adjustments to capture shrinking demand.

From a pricing standpoint, the Austin market continues to exhibit the hallmarks of a multi-year correction. The average sold price now sits at $600,939, a stark $81,000—or 11.88%—decline from the May 2022 peak. The median sold price, a more stable indicator for typical buyers, has fallen even further, down 16.16% from its $550,000 peak to $461,128 today. When adjusted for historical appreciation rates, tracking against prices from 36 months ago, the market reflects a nearly 14% depreciation—an unprecedented reversal considering Austin's historically robust appreciation trajectory.

Long-term modeling offers little short-term relief for sellers. Assuming the current median price of $461,128 represents the cyclical bottom—and applying Austin's 25-year average compound appreciation rate of 5.083%—it would take until February 2029 to return to the prior peak of approximately $551,421. This suggests that absent extraordinary external factors, Austin's housing market is positioned for a slow, methodical recovery rather than a rapid rebound.

Further dissecting pricing trends reveals that the correction has been more pronounced in the lower tiers of the market. The bottom 25th percentile has experienced a 4.1% year-over-year price decline, compared to a 1.5% decline at the top 25th percentile. This bifurcation underscores the affordability pressures facing entry-level buyers and the outsized impact of high mortgage rates on lower-income purchasing power.

Geographically, the market remains uneven. Some cities, like Marble Falls, Liberty Hill, and Leander, have experienced months of inventory increases exceeding 90% year-to-date, exacerbating buyer leverage. Meanwhile, more stable areas like San Marcos and Dripping Springs have seen modest or even slight decreases in months of inventory, reflecting localized demand resilience or constrained supply.

The Market Health Index (MHI) and Inventory Stress Index (ISI) provide additional quantitative confirmation of prevailing buyer-favoring conditions. With an MHI of 20.1%, the market is firmly categorized as a buyer's market, well below the 30% threshold that signals balance. The ISI, at just 7.1%, remains under the 10% mark, suggesting minimal upward price pressure and confirming that buyers hold substantial negotiating power.

In summary, the Austin housing market has entered a phase defined by high inventory, buyer hesitation, persistent price reductions, and a long, data-supported path to full price recovery. While Austin's long-term fundamentals remain favorable due to continued population growth and economic expansion, short-term conditions heavily favor buyers, particularly those positioned to negotiate aggressively or leverage declining prices in higher-priced submarkets.

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