Active residential listings currently sit at 12,660, representing a 13.8 percent increase compared to the same time last year. While this is well below the prior market peak of 18,146 listings reached in late June 2025, the year-over-year rise confirms that inventory has not been absorbed at a pace fast enough to tighten conditions. More importantly, 53.5 percent of all active listings have experienced at least one price reduction, signaling that sellers are adjusting expectations in response to buyer resistance rather than waiting for demand to return.
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Breaking down inventory composition reveals that resale listings continue to dominate market supply. Of the 12,660 active listings, 8,747 are resale properties and 3,913 are new construction homes. This matters because resale inventory tends to be more price sensitive and more exposed to market shifts. New construction activity remains elevated, but builders are generally controlling absorption through incentives and controlled releases rather than aggressive price appreciation.
Pending listings further confirm slower market engagement. Pending homes total 3,191, down 5.0 percent year over year. This decline in contract activity comes despite higher inventory levels, indicating that buyers are being selective and price-conscious rather than reacting to increased choice with urgency. Resale properties account for 1,840 of these pending listings, while new construction represents 1,351, reinforcing the reality that builders are capturing a disproportionate share of buyer activity through incentives rather than price growth.
The Activity Index, which measures the percentage of active listings that enter pending status, has fallen from 23.2 percent last year to 20.1 percent today. This 13.2 percent decline in activity is one of the clearest indicators of market deceleration. New construction continues to outperform resale with an Activity Index of 25.66 percent, while resale activity sits at just 17.38 percent. This split highlights a market where incentives and flexibility are driving transactions rather than organic demand strength.
When resale activity is evaluated through market phase classifications, the picture becomes even more telling. A combined 80 percent of resale markets are now operating in either the Contraction or Crisis categories, defined by Activity Index levels below 20 percent. These phases are historically associated with rising inventory, slower turnover, and increasing price pressure. Only a small fraction of markets remain in equilibrium, and none qualify as being in expansion. This shift places negotiating leverage firmly on the buyer side of the transaction.
Another critical demand indicator, the New Listing to Pending Ratio, currently stands at 0.53. This means that for every new listing entering the market, just over half a listing is going under contract. This ratio is significantly below the 25-year historical average of 0.82 and reflects a structural imbalance where supply growth continues to outpace absorption. Year to date, the cumulative difference between new listings and pending listings is 524, reinforcing that inventory is continuing to accumulate rather than clear.
Months of Inventory further confirms this imbalance. Austin now sits at 4.49 months of inventory, up from 3.88 months at the same time last year, representing a 15.6 percent increase. While this level does not yet reflect extreme oversupply, it does mark a shift away from seller-favorable conditions and into a more neutral to buyer-leaning environment. Resale inventory classifications show a meaningful share of markets entering Buyer Advantage and Buyer Control zones, where pricing power erodes and sellers must compete aggressively on terms and condition.
Despite rising inventory, total sales activity remains relatively resilient in absolute terms. The Austin area recorded 1,728 sold properties year to date, which is down 8.1 percent from last year but still 13.5 percent above the long-term average. This suggests that while transactions are slowing compared to recent years, the market is not frozen. Instead, it is recalibrating to more sustainable volumes following the extraordinary conditions of the early 2020s.
However, when adjusted for population growth and agent count, sales efficiency weakens. Cumulative sales per 100,000 residents stand at 65, down 10.1 percent year over year and 19.0 percent below historical averages. Sales per 1,000 Realtors are flat year over year at 101 but remain 13.6 percent below average. This indicates increased competition among agents and fewer transactions per professional compared to normal market cycles.
Pricing trends continue to reflect a controlled but ongoing correction. The average sold price for January is $597,896, down 12.32 percent or approximately $84,000 from the May 2022 peak of $681,939. Median pricing shows a more pronounced adjustment. The median sold price currently stands at $439,995, representing a 20.0 percent decline or roughly $110,000 from the May 2022 peak of $550,000. Median prices are now running 2.21 percent below levels from 36 months ago, highlighting that inflation-adjusted values remain under pressure.
Price behavior also varies significantly by price tier. The bottom 25th percentile of homes experienced a 2.73 percent decline in prices year over year and a 4.98 percent drop in price per square foot. Meanwhile, the top 25th percentile posted a 4.03 percent increase in price, although price per square foot still declined by 2.05 percent. This divergence suggests that higher-end homes are holding nominal price levels through size and amenity adjustments, while entry-level and mid-range homes are absorbing more direct price reductions.
Geographically, price trends remain uneven. Only six cities across the Austin region are posting year-over-year median price increases, while twenty-four cities are experiencing declines. This dispersion reinforces the importance of micro-market analysis, as city-level performance varies widely depending on supply growth, new construction exposure, and buyer affordability thresholds.
The absorption rate, defined as the ratio of sold listings to active listings, currently sits at 23.52 percent. This is well below the historical average of 31.61 percent and reflects slower inventory turnover. Markets with absorption rates below 30 percent tend to favor buyers, as sellers must compete harder on price, concessions, and terms to secure contracts.
Interestingly, the Market Flow Score stands at 8.57, above the historical average of 6.59. This indicates that while demand is weaker relative to supply, transactions that do occur are moving efficiently through the system. In practical terms, this suggests that properly priced homes aligned with buyer expectations are still selling, even as overall volume slows.
From a long-term perspective, Austin’s 25-year compound annual appreciation rate of 4.694 percent provides important context. If the market has reached a correction bottom at today’s median price of $439,995, a return to the prior peak near $551,000 would take approximately 60 months, placing a potential recovery timeline around late 2030. This projection assumes stable economic conditions and historical appreciation patterns rather than speculative acceleration.
For buyers, the current Austin housing market presents expanding choice, improving leverage, and increased pricing transparency. For sellers, success now depends heavily on realistic pricing, strategic positioning, and an understanding of local demand conditions rather than reliance on broader market trends. Investors should note that yield discipline and cash flow analysis matter more than appreciation assumptions in this phase of the cycle.
For real estate agents, the data clearly shows that market efficiency is declining while competition is increasing. Mastery of pricing strategy, local inventory analysis, and data-backed guidance is no longer optional. It is essential.
