Austin’s housing market is no longer correcting quietly; the data now shows a slower, supply heavy market that requires discipline, pricing accuracy, and patience from every participant.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for December 17, 2025.
The Austin real estate market enters the final weeks of 2025 with inventory elevated, demand muted, and pricing pressure still firmly in place. Active residential listings currently sit at 13,918, which is 15.2 percent higher than this time last year. While this is down 4,228 listings from the June 2025 peak of 18,146, the decline is seasonal rather than demand driven. More importantly, 57 percent of all active listings have already experienced at least one price drop, signaling that sellers are still chasing the market rather than leading it. This is a defining feature of the current Austin housing cycle and one that continues to shape negotiations, days on market, and final sale outcomes.
New listings tell a similar story. From January through December, the market recorded 49,194 new listings, up 3.5 percent year over year and a striking 20.8 percent above the long term average. That level of seller participation would normally signal confidence, but in today’s environment it is running ahead of buyer demand. Pending listings confirm this imbalance. Active pendings currently stand at 3,563, down 5.0 percent from last year. On a cumulative basis, total pending contracts for the year reached 42,543, which is 3.7 percent lower year over year despite being slightly above the historical average. This widening gap between supply entering the market and demand absorbing it remains one of the most important signals in this Austin market update.
The Activity Index further reinforces this slowdown. The overall Activity Index has fallen from 23.7 percent in 2024 to 20.4 percent in 2025, a decline of nearly 14 percent. New construction continues to outperform resale with an Activity Index of 27.32 percent, while resale sits at just 17.07 percent. That places most resale submarkets squarely in the contraction or danger zone category, where supply overwhelms demand and pricing pressure intensifies. Nearly half of resale areas now fall in this range, with another meaningful portion slipping into the crisis or freeze category below 15 percent. This is not a market that rewards optimism or aggressive pricing strategies.
The new listing to pending ratio offers additional clarity. The current monthly ratio sits at 0.76, and the year to date ratio is 0.73, well below the 25 year average of 0.82. In simple terms, the market is adding new listings faster than it is converting them into contracts. Over the course of the year, this has resulted in a cumulative surplus of 6,651 listings. Until that gap narrows meaningfully, price stability will remain elusive across much of the Austin housing market.
Months of inventory continues to rise and now stands at 4.95 months, up 16.3 percent from 4.25 months last year. While this figure may still sound moderate compared to historic downturns, the trend direction matters. When isolating resale inventory, many cities and zip codes have already moved into buyer advantage or buyer control territory. Areas with more than 270 days of inventory are experiencing longer marketing times, heavier concessions, and more frequent price reductions. This environment clearly favors buyers who are prepared, patient, and disciplined.
Sales activity confirms the cooling trend. December recorded 2,493 closed sales, bringing the year to date total to 30,254 sold properties. That is down 3.6 percent year over year, even though it remains 7.6 percent above the long term average due to stronger activity earlier in the cycle. When adjusted for population growth, the slowdown becomes more apparent. Sold transactions per 100,000 residents fell 5.9 percent year over year and sit more than 20 percent below historical norms. Similarly, sold transactions per 1,000 Realtors remain well below average, underscoring the competitive pressure agents are facing in today’s Austin real estate market.
Pricing continues to reflect this slower environment. The average sold price in December came in at $597,752, representing a 12.35 percent decline, or roughly $84,000, from the May 2022 peak. The median sold price now stands at $445,500, down 19 percent, or $105,000, from its peak. On a three year lookback, median prices are effectively flat, sitting just 1 percent below levels from 36 months ago. This confirms that the market is no longer inflating but is instead working through a prolonged normalization phase.
Long term appreciation data provides useful context. Austin’s 25 year compound annual appreciation rate is approximately 4.94 percent. If the current median price of $445,500 represents the bottom of this correction, it would take roughly 56 months, or until mid 2030, to return to peak pricing under normal growth assumptions. This projection reinforces a key theme for buyers and investors alike: time in the market, not timing the market, remains the primary driver of long term outcomes.
Price performance also varies widely across the market. Over the past year, bottom quartile homes saw prices decline by just over 3 percent, while top quartile homes were essentially flat. This divergence highlights the importance of property type, location, and buyer pool. Eight cities posted year over year median price gains, while twenty two experienced declines. There is no single Austin housing forecast that applies universally. Local data matters more than ever.
Demand metrics continue to lag. The absorption rate, defined as the ratio of sold listings to active inventory, currently sits at 15.63 percent, roughly half of the historical average of 31.64 percent. This confirms that inventory is not being absorbed quickly enough to support price growth. The Market Flow Score, which combines several turnover and efficiency metrics, stands at 5.56 compared to a historical average of 6.58. While not at crisis levels, this score reflects a sluggish, supply heavy market that rewards precision rather than speculation.
For buyers, this environment offers leverage, selection, and negotiating power that has not existed in years. For sellers, success depends on realistic pricing, strong presentation, and a willingness to compete. For investors, returns hinge on conservative underwriting and long term assumptions rather than short term appreciation. For agents, the path forward is clear: data driven advice, clear communication, and disciplined execution are no longer optional.
As this Austin real estate forecast moves into 2026, the market is not collapsing, but it is demanding realism. Inventory remains elevated, demand is selective, and pricing is grounded. Those who align their strategy with the data will navigate this phase successfully, while those who ignore it will continue to chase the market downward.
