Austin housing is showing more signs of imbalance as supply holds high and demand continues to lag.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for September 12, 2025.

The Austin real estate market entered September with 17,058 active residential listings, only slightly down from the late-June peak of 18,146 but still well above the 2024 level of 14,730. That represents a 15.8 percent year-over-year increase in supply. More than half of these homes—58.4 percent—have already experienced at least one price reduction, a clear indicator that sellers are struggling to attract offers at original list prices. This dynamic is creating a buyer’s market atmosphere, even though not every buyer will feel that leverage equally depending on their price point and desired location.

Pending listings show the other side of the story. Compared to last September, pending contracts have slipped 2.0 percent, totaling 4,017 this year versus 4,098 last year. When viewed cumulatively from January through September, pending sales are down 8.2 percent year-over-year and now sit slightly below the long-term average. The fact that new listings are running ahead of historical norms (+18.6 percent above average) while pending contracts are below average is widening the gap between supply and demand. The year-to-date spread stands at 7,169, highlighting how much faster inventory is piling up than contracts are being written.

The Activity Index—a key measure of how many homes go under contract relative to total supply—underscores this trend. At 19.1 percent, the index is down from 21.8 percent a year ago, representing a 12.4 percent decline. Resale homes show even weaker momentum at 16.0 percent compared to new construction at 26.9 percent. Builders continue to attract buyers with incentives and flexible financing options, while traditional sellers face tougher headwinds.

Another lens on supply and demand is the New Listing to Pending ratio. The monthly ratio sits at 0.53, meaning nearly two new listings come to market for every contract written. On a year-to-date basis, the ratio is 0.70, significantly weaker than the 25-year average of 0.82. A ratio this low signals that buyers are not absorbing the new supply at the pace Austin has historically seen, which is one reason inventory levels continue to expand.

Months of Inventory now stands at 6.03, up 15 percent from last year’s 5.24. While Austin’s city-level inventory is up just 2.2 percent year-over-year, the year-to-date growth is a much larger 24.5 percent. In practical terms, this means that if no new listings came on the market, it would take just over six months to sell through the existing homes at the current pace of sales. That is well above the three- to four-month range that typically defines a balanced market, and it leans heavily toward buyer advantage.

Sales activity reflects the cooler pace. In September, 2,340 homes sold across the Austin area. Year-to-date, 22,881 properties have sold, down 4.3 percent compared to last year but still running 5.5 percent above the long-term average. When adjusted for population growth, the slowdown becomes even clearer: 895 sales per 100,000 residents year-to-date is 6.6 percent lower than last year and 22.2 percent below the long-term average. Realtor density also tells the story, with sales per 1,000 Realtors nearly 26 percent below historical norms. For agents, this means stiffer competition for each transaction, emphasizing the need for sharper pricing strategies and more proactive buyer outreach.

On pricing, both averages and medians remain well below peak values. The average sold price in September came in at $554,480, down nearly $127,000 (18.7 percent) from the May 2022 high of $681,939. Median pricing has followed a similar trajectory, currently at $425,000, down $125,000 (22.7 percent) from the same May 2022 peak of $550,000. Compared to three years ago, the median price is tracking almost 10 percent lower. These numbers show that while sellers are still earning strong prices relative to pre-pandemic years, the market correction has been sharp and sustained.

Looking at market resilience, the 25-year compound appreciation rate for Austin housing remains at 4.741 percent. Using that long-term growth trend, it would take roughly 70 months—about five years and ten months—for the median price to climb back to its previous peak of $550,875, assuming September 2025 represents the bottom of this correction. That projection places the recovery around June 2031, highlighting the long runway required for prices to return to record levels if appreciation simply follows historical norms.

Breaking down the market by price segments shows further nuance. Homes in the bottom 25th percentile saw values decline 4.6 percent year-over-year with a 3.9 percent dip in price per square foot. At the top 25th percentile, prices actually rose 2.4 percent, though price per square foot slipped slightly by 0.9 percent. This illustrates the widening gap between entry-level affordability challenges and luxury stability. Many high-income buyers remain active in upper-tier markets, while affordability pressures continue to weigh heavily on first-time buyers and middle-income families.

Across the region, 10 cities posted year-over-year gains in median price while 20 showed declines. The overall absorption rate—the percentage of active inventory that sold in a given period—registered at just 17.5 percent, far below the historical average of 31.8 percent. This figure shows that homes are sitting longer and buyers are taking their time. The Market Flow Score, another indicator of velocity, sits at 5.5 compared to the long-term norm of 6.6. While not catastrophic, this reading confirms that Austin’s housing market is currently operating with reduced momentum.

For buyers, this environment offers more choice, more negotiating room, and the potential for seller-paid incentives. For sellers, the message is clear: homes must be priced accurately from the start, staged well, and marketed aggressively to stand out. Investors will note the diverging performance between new construction and resale, with builders capturing a larger share of activity. For agents, these conditions underscore the importance of sharpening analytical skills, guiding clients with realistic expectations, and positioning listings competitively in a crowded marketplace.

As we look toward the remainder of 2025, Austin real estate continues to balance on a fine line between correction and stabilization. High supply, modest demand, and shifting buyer psychology suggest the market may remain tilted toward buyers well into next year. However, Austin’s long-term fundamentals—job growth, population inflows, and historical appreciation trends—still underpin a strong foundation for eventual recovery.​