Austin Real Estate Market Update – September 04, 2025
The Austin housing market continues to move through its correction phase, showing signs of stabilization in some areas while maintaining clear challenges in others.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for September 4, 2025.
The number of active residential listings today stands at 16,993. This is down from the June 30 high of 18,146 but still 16.9% higher than the 14,539 listings recorded a year ago. Inventory levels remain historically elevated, and with 58% of all active listings having experienced at least one price reduction, sellers are adjusting expectations to align with market realities. This higher level of supply is reshaping negotiations and pricing power across Austin real estate.
Market Overview
From January through August, 37,819 new listings have entered the market. This figure is up 6.6% compared to last year and sits an impressive 25.7% above the long-term average. Pending contracts, however, have not kept pace. Cumulative pending listings for the same period reached 31,038—down 1.4% year-over-year, though still 6.2% above the long-term average. This imbalance between new supply and pending demand has created a gap of 6,781 listings year-to-date, keeping the market tilted toward buyers.
The Activity Index, which measures the share of inventory that is going under contract, sits at 19.1% compared with 21.6% this time last year. That 11.2% decline underscores slower absorption of listings, especially in the resale market, which is recording an Activity Index of only 16.4%. In contrast, new construction is performing better with a 26.1% Activity Index, suggesting builders are finding more ways to attract buyers through pricing incentives and concessions.
Housing Prices
Price performance remains the most visible part of the Austin housing forecast. The average sold price in August was $586,558, representing a 13.99% decline from the May 2022 peak of $681,939. The median sold price landed at $440,452, down 19.92% from the peak of $550,000 in May 2022. In dollar terms, that’s about a $95,000 decline on the average sale and $110,000 on the median.
Compared to 36 months prior, today’s median is 11.2% lower, underscoring how significant this correction has been over a three-year horizon. Long-term projections, however, offer perspective. With Austin’s 25-year compound appreciation rate of 4.891%, a return to peak pricing is estimated to take about 59 months, or until mid-2030, assuming the current bottom holds.
Not all parts of the market are moving in the same direction. Homes in the bottom 25th percentile of pricing fell by 3.2% year-over-year, while the top 25th percentile actually gained 6.2%. This widening split highlights the continued resilience of higher-end buyers even as affordability challenges weigh on entry-level demand.
Regional Trends
Months of Inventory rose to 6.03, up 16.7% from 5.16 a year ago. By historical standards, this is high—buyers have more options, and sellers face longer marketing times. City-by-city comparisons show Austin proper holding 4.97 months of supply, down 6.4% from last year, but many surrounding communities are posting significant increases. Smithville’s inventory jumped 172.8% year-over-year, and Cedar Park’s doubled compared to January. These disparities suggest suburban markets are experiencing the sharpest adjustments, while Austin itself is showing early stabilization.
Sales activity continues to lag. From January through August, 20,454 homes sold, representing a 5.1% year-over-year decline. Sales per 100,000 residents dropped 7.4% from last year and now sit 22.1% below long-term averages. Realtor productivity has also softened, with 1,096 sales per 1,000 agents year-to-date, down 25.8% from historical norms.
List-to-Sale Price Performance
Absorption—the share of inventory sold versus active listings—sits at 17.2%. Historically, Austin’s average is 31.8%. This gap is significant, showing the degree of buyer hesitation and oversupply currently in the market. The Market Flow Score, a normalized 0-10 indicator of momentum, registered at 5.30. That’s below the long-term average of 6.60, reinforcing the view that while conditions are not collapsing, they remain sluggish and tilted toward buyers.
Peak Value Trends
The broader correction remains clear when compared to May 2022 peak values. Median prices are still down nearly 20%, and while upper-tier homes show resilience, lower-tier homes continue to struggle. The affordability squeeze, compounded by higher interest rates, is limiting first-time buyer activity. Investors, too, are being more cautious given slower rent growth and the weight of higher financing costs.
Looking ahead, Austin’s real estate market forecast points to gradual recovery rather than a sudden rebound. Elevated inventory levels, soft absorption, and a still-wide gap between new listings and pendings suggest buyers will retain leverage in negotiations for the near term. Sellers who remain flexible on pricing will find success, while those holding to peak valuations are likely to sit longer on the market.
FAQ Section
1. Is the Austin housing market still in a downturn?
Yes, the Austin housing market remains in a correction phase. Median home prices are down nearly 20% from the May 2022 peak, and absorption is well below historical averages at just 17.2%. Elevated inventory levels and slower buyer activity mean the market is still leaning toward buyers, although certain high-end segments are holding value better. This makes Austin real estate attractive for buyers looking for leverage but challenging for sellers who entered the market with peak-era expectations.
2. What does the current inventory mean for buyers?
With 16,993 active listings and more than half of them showing price reductions, buyers today have more negotiating power than at any point in the past decade. The 6.03 months of inventory on the market creates longer marketing times and more options for comparison. For those purchasing in 2025, this Austin real estate forecast signals opportunities to secure concessions, favorable terms, or even below-list pricing in certain neighborhoods.
3. How do today’s prices compare to past trends?
The median sold price of $440,452 represents a $110,000 drop from the May 2022 peak of $550,000. That decline is significant, but it’s important to view it against the 25-year appreciation trend of 4.891% annually. Over the long run, Austin housing has consistently regained ground, with projections showing a return to peak pricing by mid-2030 if the correction bottom has indeed been reached. This suggests buyers entering the market now could benefit from long-term appreciation.
4. Are investors still active in the Austin property market?
Investor activity has slowed compared to the frenzied pace of 2021–2022. Higher interest rates and slower rent growth have trimmed investor demand, especially in the entry-level segment. However, builders are still offering incentives, and the new construction segment maintains a healthier Activity Index of 26.1%. For investors with strong cash positions, the Austin housing forecast shows opportunities in select higher-end and suburban markets where values are holding or even appreciating.
5. What should sellers know about today’s conditions?
Sellers should understand that pricing strategy is critical in this environment. With absorption at 17.2% and nearly 60% of listings recording price drops, buyers have leverage and patience. Properties priced competitively are still moving, particularly in the upper tier of the market where values are showing resilience. Those holding to peak valuations risk extended time on the market, while sellers who adapt to today’s Austin real estate trends are better positioned to close deals.
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