The Austin housing market is walking a tightrope between high supply and sluggish demand, forcing buyers and sellers to adjust expectations in real time.

Scroll down to view the full Austin Daily Real Estate Briefing for September 24, 2025.

Market Overview

Austin’s active residential listings stand at 16,833, which is up 14.3% from the same time last year when there were 14,733 homes on the market. While inventory has pulled back from the June high of 18,146, supply remains heavy. A striking 58.6% of listings have seen at least one price drop, signaling sellers are having to adjust in order to capture limited buyer attention.

Pending listings tell a different story. At 4,082, they are down 3.7% from last year’s 4,238. This illustrates the gap between homes entering the market and those going under contract. Year-to-date, cumulative pending transactions total 33,475, which is 4.4% lower than last year but still slightly above the long-term average.

The Activity Index—a measure of how quickly homes are being absorbed—has slipped to 19.5% compared to 22.3% a year ago. This 12.6% decline underlines the slower pace of contract activity, especially in the resale segment where absorption sits at just 16.3%, compared to 27.6% in new construction.

Housing Prices

Pricing remains firmly below the May 2022 peak. The average sold price in September sits at $559,227, down nearly 18% from the peak of $681,939. Median sold prices have dropped even further, now at $429,000—a 22% decline from the peak median of $550,000.

Looking at appreciation over time, the 25-year compound rate for Austin real estate is 4.78%. If today’s $429,000 median is the market bottom, it would take roughly 67 months—until March 2031—for prices to return to a peak value of around $551,000 under normal appreciation. This projection matters for both buyers waiting for recovery and investors planning long-term holds.

There is also a growing divide between different market tiers. Homes in the bottom 25th percentile are down 5.3% year-over-year, while those in the top 25th percentile have actually gained 4.1%. This shows higher-end properties are proving more resilient, while affordable segments continue to feel price pressure.

Regional Trends

Inventory and price dynamics vary widely across Austin’s surrounding cities. Georgetown, Leander, and Liberty Hill all show more than two-thirds of active listings with price reductions. In Kyle, 63% of listings have been reduced, while Buda and Bastrop are also seeing pressure. On the flip side, markets like Del Valle show fewer price drops but larger percentage changes in absorption.

Months of Inventory for the metro now sits at 5.95, up from 5.25 a year ago. That’s a 13.2% increase, pushing Austin deeper into buyer-friendly conditions. City-by-city differences are sharp: Smithville has jumped from 5.38 months of inventory last year to 18 months now, while places like Cedar Park and Leander have seen inventory nearly double. Meanwhile, Buda and Hutto remain tighter compared to last year but still looser than in 2022.

List-to-Sale Price Performance

The ratio of new listings to pending sales is one of the best real-time indicators of market flow. Today, the monthly ratio is at 0.67, meaning that for every 100 new listings entering the market, just 67 are going under contract. The year-to-date ratio is slightly higher at 0.70, but still well below the 25-year average of 0.82. Historically, ratios above 1.0 show demand outpacing supply, while sub-0.70 ratios highlight inventory growth. Right now, the imbalance continues to lean toward buyers.

The absorption rate—measuring sold-to-active listings—is 17.5%. That’s far below the historical average of 31.8%, another sign of sluggish demand.

Peak Value Trends

Looking back, the May 2022 price peak still looms large. Median values are down $121,000 from that high, and the gap is even wider for average prices. For sellers, this means anchoring expectations to recent comparables rather than peak-era valuations. Buyers, meanwhile, gain negotiating leverage, especially with price reductions now the norm.

The Market Flow Score (MFS), a normalized measure of market momentum, is currently 5.54. This trails the long-term average of 6.60. While not catastrophic, it shows that market turnover is running slower than normal, with more weight on the supply side of the equation.

Implications for Buyers, Sellers, and Investors

For buyers, this is one of the most favorable environments in years. With nearly six months of inventory, widespread price reductions, and a lower absorption rate, buyers can negotiate more aggressively. Sellers, however, face a tougher path. Pricing strategically from day one is critical—overpricing only results in longer days on market and eventual reductions.

Investors should pay close attention to the bottom quartile of the market, where prices are still falling. Entry points are improving, but long-term projections suggest patience is needed. With a likely recovery timeline extending into 2031, holding power and rental stability will determine profitability.

Agents must help clients navigate this split reality: higher-end homes are holding value, while affordable and mid-tier properties remain under pressure. Accurate pricing and clear communication about absorption trends are vital to building client trust.

Conclusion

The Austin real estate market on September 24, 2025, reflects a classic correction phase. Supply is high, demand is softer, and prices remain well below peak values. Buyers have leverage, sellers must adjust expectations, and investors should focus on long-term strategy. While Austin’s long-term fundamentals remain strong, the near-term outlook leans toward continued balance in favor of buyers.​