Active residential listings currently stand at 14,270. While that number is well below the recent peak of 18,146 listings reached in late June 2025, it remains historically high. Compared to December 2024, active inventory is up 14.4%, confirming that supply has not tightened meaningfully year over year. More than half of all active listings, 57.6% to be exact, have experienced at least one price reduction. That is a critical data point because it tells us that sellers are still adjusting expectations to match today’s demand reality rather than yesterday’s peak pricing environment.
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From a supply perspective, new listings continue to enter the market at a strong pace. Cumulative new listings from January through December are now at 48,581, which is 2.2% higher than last year and nearly 19.3% above the long term historical average. This means sellers are not pulling back. Instead, more homes are coming to market than is typical, even though demand has softened. This imbalance between supply growth and demand growth is one of the defining characteristics of the current Austin housing cycle.
Pending listings tell the other side of the story. Active pending listings sit at 3,743, which is down 1.9% compared to this time last year. On a cumulative basis, pending sales for the year total 41,806, representing a 5.4% decline year over year. While this number is still slightly above average historically, it highlights that buyer absorption has not kept pace with the surge in new listings. When new supply outpaces new contracts, inventory naturally builds, and sellers lose leverage.
One of the clearest ways to see this shift is through the Activity Index, which measures how quickly inventory is being absorbed. The overall Activity Index today is 20.8%, down from 23.4% a year ago, representing an 11.3% decline. For resale homes specifically, the Activity Index is even lower at 17.59%, placing much of the Austin market firmly in what is classified as the contraction or danger zone. In this phase, homes still sell, but the market favors buyers, pricing becomes more competitive, and time on market stretches out.
New construction continues to outperform resale in terms of activity, with an Activity Index of 27.63%. This gap explains why builders remain aggressive with incentives, rate buydowns, and pricing strategies. Builders are focused on clearing inventory, while resale sellers are often slower to adjust, leading to a larger share of price reductions on the resale side of the market.
The new listing to pending ratio reinforces this story. On a monthly basis, the ratio is currently 0.64, meaning significantly more new listings are entering the market than properties going under contract. For the year, the cumulative new listing to pending ratio stands at 0.73, well below the 25 year average of 0.82. Historically, ratios below average signal weaker demand relative to supply, and today’s ratio confirms that trend.
Months of inventory has climbed accordingly. Across all properties, months of inventory has increased from 4.39 last year to 5.08 today, a year over year increase of 15.8%. This level is firmly in buyer advantage territory. When we isolate resale properties, a growing number of cities and zip codes fall into buyer control classifications, meaning excess supply and declining pricing momentum are present. Austin itself now sits near the middle of the buyer advantage range, signaling that pricing power has shifted decisively toward buyers.
Sales activity has slowed but not collapsed. In December, 2,483 homes sold across the Austin area. On a year to date basis, cumulative sales total 30,202 transactions, down 3.8% year over year but still 7.4% above long term averages. This tells us that while demand is softer than last year, it remains healthy compared to historical norms. However, population adjusted sales numbers reveal a deeper story. Sold properties per 100,000 residents are down 6.1% year over year and more than 20% below average, confirming that population growth is no longer fueling housing demand the way it once did.
Pricing reflects the slower pace. The average sold price in December came in at $605,005. That is down from the market peak of $681,939 reached in May 2022, representing an 11.28% decline, or roughly $77,000. Median prices show an even larger adjustment. The median sold price is now $450,000, down from $550,000 at the peak, marking an 18.18% decline, or $100,000. These are not minor corrections. They represent a meaningful reset in affordability and expectations.
Looking deeper into price behavior, high and low price segments are diverging. Homes in the bottom 25th percentile saw a slight year over year price decline of 0.62%, with price per square foot down nearly 3%. Meanwhile, the top 25th percentile increased modestly, with prices up 1.58% and price per square foot up 0.50%. This split shows that higher end homes with strong locations and quality continue to attract demand, while entry level and mid range homes remain under pressure.
At a city level, median prices are down year over year in 21 cities, with only 8 showing appreciation. This broad based softness confirms that today’s market conditions are systemic, not isolated to one neighborhood or price band.
Demand metrics further support this conclusion. The absorption rate, calculated as the ratio of sold listings to active listings, is currently 15.46%, roughly half of the historical average of 31.64%. A lower absorption rate means homes are taking longer to sell, competition among sellers is increasing, and buyers have more options and negotiating power.
The Market Flow Score, which combines multiple turnover and efficiency metrics into a single indicator, currently sits at 5.44 compared to a historical average of 6.58. While not at crisis levels, this score indicates a slower, supply heavy market where momentum is muted and recovery will take time rather than weeks or months.
From a long term perspective, the Austin housing market still benefits from strong fundamentals, but patience is required. Using the city’s 25 year compound appreciation rate of 4.981%, and assuming the market has reached a cyclical bottom near today’s $450,000 median price, it would take approximately 53 months to return to the prior peak price range. That places a full recovery around April 2030, assuming normal appreciation resumes and no additional economic shocks occur.
For buyers, today’s Austin real estate market offers leverage, choice, and opportunity, especially compared to recent years. For sellers, success depends on accurate pricing, strong presentation, and realistic expectations. Investors should focus on cash flow, not quick appreciation, and real estate agents must shift strategies from speed to precision.
This Austin housing forecast continues to point toward normalization rather than collapse or rebound. The market is working through excess supply, recalibrating prices, and resetting expectations. Those who understand the data and adapt will perform far better than those waiting for the market to behave like it did in 2021.
