The Austin housing market is no longer overheating, but it is still working through excess supply, slower demand, and a longer road back to balance.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for December 16, 2025.
The Austin real estate market continues to show clear signs of a prolonged correction phase as we move through mid-December 2025. Inventory remains elevated, buyer activity is weaker than last year, and pricing pressure is still widespread across most price points and cities. While the market is no longer deteriorating at the rapid pace seen earlier in the year, it has not yet regained the momentum needed for a true recovery. This creates a very specific environment where strategy matters more than optimism for buyers, sellers, investors, and real estate agents navigating the Austin housing market.
Active residential listings currently stand at 14,055, which is down significantly from the recent peak of 18,146 reached in late June 2025. That decline of more than 4,000 listings may appear encouraging on the surface, but context matters. Even after the pullback, inventory is still 15.5 percent higher than the same time last year, confirming that supply remains structurally elevated compared to demand. More than half of all active listings, 57 percent to be exact, have already experienced at least one price reduction. This level of price adjustment signals that sellers are still chasing the market rather than leading it.
Breaking down inventory further, new construction accounts for 4,123 active listings, while resale homes make up 9,932. Builders continue to carry a heavy share of inventory, which has meaningful implications for pricing pressure across the broader market. New construction activity remains more fluid than resale, but it also contributes to competition that keeps resale sellers from regaining pricing power. This dynamic continues to weigh on the Austin housing forecast as we move toward 2026.
New listings for the year now total 49,111, which is 3.3 percent higher than last year and more than 20 percent above the long-term average. This is an important data point because it confirms that sellers are still entering the market at a pace that exceeds historical norms, even as buyer demand remains softer. When new supply continues to outpace demand, the market struggles to clear excess inventory efficiently.
Pending listings tell a different story. Current pending inventory stands at 3,570, which is down 5.1 percent year over year. Cumulatively, pending sales for the year total 42,392, reflecting a 4.1 percent decline compared to last year. While this figure remains slightly above the long-term average, the year-over-year drop confirms that fewer buyers are committing to purchases compared to 2024. This gap between new listings and pending sales is a central theme in today’s Austin market update.
The Activity Index, which measures the percentage of active listings going under contract, has fallen from 23.6 percent last year to 20.3 percent today. This 14.3 percent decline places much of the resale market firmly in the softening and contraction phases. New construction remains more active with an Activity Index above 27 percent, but resale homes are lagging at just under 17 percent. That resale figure sits dangerously close to the contraction and crisis threshold, where buyer hesitation increases and price corrections tend to accelerate.
The monthly new listing to pending ratio currently sits at 0.72, well below the 25-year average of 0.82. On a cumulative basis, the market has added 6,719 more listings than it has absorbed through pending contracts this year. This imbalance explains why inventory remains elevated even after seasonal slowdowns. Until this ratio moves closer to or above its historical norm, supply will continue to outweigh demand across much of the Austin housing market.
Months of inventory further reinforces this reality. Austin now sits at 4.99 months of inventory, up from 4.28 months one year ago, representing a 16.6 percent increase. While this level does not yet indicate a severe oversupply, it does reflect a buyer-advantaged environment in many submarkets. Resale-only data shows that a growing share of cities and ZIP codes are moving into buyer advantage or buyer control conditions, where pricing power shifts away from sellers and negotiations become more aggressive.
Sales activity remains steady but subdued. December recorded 2,520 closed sales, bringing the year-to-date total to 30,272. That figure is down 3.6 percent year over year, even though it remains above the long-term average. When adjusted for population growth, the slowdown becomes more apparent. Sales per 100,000 residents are down nearly 6 percent from last year and more than 20 percent below average, highlighting affordability constraints and buyer caution.
Pricing trends continue to normalize following the post-pandemic peak. The average sold price in December is $596,401, down more than $86,000 from the May 2022 peak, representing a 12.5 percent decline. The median sold price stands at $440,000, which is exactly 20 percent below its 2022 high. This correction has reset affordability closer to pre-pandemic norms, but higher interest rates mean monthly payments remain elevated for many buyers.
When comparing current median prices to values from 36 months ago, prices are still down slightly, confirming that the market has not yet fully stabilized. Using Austin’s long-term compound appreciation rate of 4.886 percent, a return to prior peak median pricing would take roughly five years, assuming the market has already found its bottom. This projection reinforces the idea that the Austin real estate forecast should be viewed through a longer-term lens rather than short-term expectations of rapid appreciation.
Price performance varies significantly by segment. The bottom 25 percent of the market saw prices decline more than 3 percent year over year, while the top 25 percent remained essentially flat. This divergence suggests that affordability-constrained buyers are under the most pressure, while higher-end segments benefit from more resilient demand and stronger household balance sheets.
Demand metrics remain weak compared to historical norms. The absorption rate, measured as the ratio of sold listings to active listings, currently sits at 15.58 percent, which is roughly half of the long-term average of 31.64 percent. This confirms that inventory is turning over slowly and that buyers remain selective. The Market Flow Score, which combines multiple turnover and efficiency metrics, stands at 5.52 versus a historical average of 6.58. This lower score reflects a supply-heavy market that is still searching for equilibrium.
Taken together, today’s data paints a clear picture of the Austin housing market. Conditions are no longer deteriorating rapidly, but the recovery process is slow, uneven, and highly dependent on pricing discipline and realistic expectations. Buyers have leverage, sellers must compete aggressively, and investors should remain cautious and selective. For agents, success in this environment requires honest conversations, data-driven pricing, and a deep understanding of local submarket dynamics.
