The Austin housing market is caught in a tug-of-war between elevated supply and sluggish demand, with price adjustments shaping today’s opportunities.

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

The Austin real estate market closed the first week of September 2025 with 17,062 active residential listings. This represents a 16.6 percent increase from the 14,629 listings available at the same time last year. While still below the late-June high of 18,146 listings, supply levels remain near historic peaks. Nearly six in ten active homes—58.1 percent—have experienced at least one price drop, underlining the competition among sellers. For buyers, this environment translates to more negotiating leverage, but for sellers, it signals a continued need to price strategically.

Pending contracts provide a more tempered view. At 4,006, pending listings are almost identical to last year’s 3,990, reflecting a year-over-year change of just 0.4 percent. Yet, despite steady contract volume, the Activity Index—a measure of buyer engagement relative to supply—has slipped from 21.4 percent last year to 19.0 percent today. This drop of 11.3 percent demonstrates that inventory growth is outpacing demand, leading to a slower market rhythm than many agents and sellers experienced in recent years.

Inventory Expansion and Supply Pressure

Austin’s months of inventory now stand at 6.05, compared with 5.20 a year ago—a 16.3 percent increase. Historically, the Austin market has averaged closer to 4–5 months of supply, meaning today’s conditions tilt toward buyers. At the city level, inventory trends vary widely: Austin proper declined slightly (-4.4% YoY), while fast-growing suburbs such as Smithville and Dale saw inventory more than double. For agents, this means market conditions are hyper-local, and city-specific absorption rates must guide pricing and marketing recommendations.

Year-to-date cumulative data reinforces the shift. From January through August, 37,819 new listings have been introduced, up 6.6 percent compared to last year and nearly 26 percent above the long-term average. Pending contracts during the same period totaled 31,065, down 1.4 percent year-over-year but still 6.2 percent above the long-term average. The result is a 6,754 listing surplus—new supply outpacing demand, putting additional downward pressure on prices.

Sales Performance and Demand Trends

Sales density remains subdued. August recorded 2,618 closings, and cumulative sales from January through August reached 20,473. That’s 5 percent fewer than last year, though still nearly 6 percent above average. When adjusted per capita, the slowdown is more pronounced: cumulative sales per 100,000 population fell 7.3 percent year-over-year and are now 22 percent below average. Similarly, cumulative sales per 1,000 Realtors are down 0.9 percent YoY and sit 25.7 percent below average. This imbalance signals the challenge agents face in capturing business in today’s competitive landscape.

The absorption rate, which measures how quickly the market is clearing existing inventory, sits at 17.28 percent. The historical average is 31.82 percent, meaning Austin is well below typical market velocity. This gap highlights a sluggish environment where homes remain on the market longer, creating both opportunities for buyers to negotiate and risks for sellers who overprice their listings.

Price Trends and Affordability

Prices remain well below their 2022 peaks but have found relative stability. The average sold price in August was $588,132, down 13.8 percent from the May 2022 peak of $681,939. Median sold prices came in at $440,000, exactly 20 percent below the May 2022 peak of $550,000. In practical terms, that means the median Austin home now sells for $110,000 less than it did at the height of the market.

When measured against long-term growth, today’s prices are in line with historical averages. The 25-year compound annual appreciation rate for Austin real estate is 4.886 percent. Assuming the market has bottomed at $440,000, it would take an estimated 59 months—until mid-2030—for median prices to return to their prior peak, assuming steady appreciation. This perspective is crucial for buyers debating whether to wait: current prices represent a correction, but long-term fundamentals still point to gradual appreciation.

Market Segmentation by Price Point

Not all segments of the market are performing equally. The bottom quartile of homes (25th percentile) saw prices fall 3.8 percent year-over-year, while the top quartile recorded gains of just over 6 percent. Price per square foot held steadier at the high end, with minimal decline of 0.24 percent compared to a 3.15 percent drop at the low end. This divergence reflects continued strength in luxury and high-demand neighborhoods, even as affordability challenges weigh on entry-level demand.

At the city level, conditions vary widely. Eleven of the 30 tracked cities posted year-over-year price increases, while 19 declined. This split highlights the need for localized analysis—buyers and sellers should not assume that trends in Austin proper mirror those in suburbs like Pflugerville, Georgetown, or Bastrop.

Outlook and Momentum Indicators

The Market Flow Score (MFS) sits at 5.36, well below the historical average of 6.60. On a scale of 0 to 10, where higher scores represent stronger demand and faster turnover, today’s reading confirms a supply-heavy, slower-moving market. In short, Austin real estate is not in crisis, but it is in a holding pattern, where elevated inventory and moderated demand are balancing out at lower price points.

Looking forward, the monthly new listing-to-pending ratio offers additional insight. The current ratio is 0.77, meaning fewer than four out of every five new listings are going under contract. Over the past 25 years, the long-term average is 0.82, reinforcing that supply is running ahead of demand.

For buyers, this means leverage. For sellers, it requires discipline in pricing and presentation. And for investors, today’s environment presents opportunities to acquire assets below peak values, with an expectation of long-term appreciation once market absorption improves.​