Austin Real Estate Market Analysis – June 26, 2025

“Inventory Surges, Buyer Activity Stalls, and Pricing Corrects as Austin's Market Correction Deepens”

The Austin real estate market continues to display unmistakable signs of a prolonged and significant correction as of June 26, 2025. The latest data from Team Price Real Estate provides clear evidence that the area remains entrenched in buyer-favorable territory, with new records set in inventory levels, ongoing buyer hesitation, and continued price erosion, all hallmarks of a market navigating the downside of a real estate cycle.

Active residential listings have reached 17,834, just 103 homes shy of the all-time high recorded three days ago on June 23, 2025, when active listings hit 17,937. This sustained inventory level far exceeds typical seasonal patterns and places the Austin market firmly in oversupply territory. To put the surge into perspective, the peak active listings in 2024 were recorded at 15,503, meaning inventory today is 15% higher than last year's high-water mark. Over 56.9% of these active listings have experienced price reductions, highlighting a persistent disconnect between seller expectations and actual buyer demand.

Compounding the inventory issue is a clear softening of buyer activity. The current Activity Index sits at just 20.4%, down sharply from 24.3% at this time last year—a 16% year-over-year decline. The Activity Index, a reliable measure of market engagement based on pending contract activity relative to total listings, underscores the ongoing buyer hesitation fueled by affordability constraints, higher borrowing costs, and pervasive economic uncertainty. As buyer activity dwindles, homes linger on the market longer, exacerbating the inventory build-up.

The Months of Inventory figure, a key metric for gauging market balance, currently stands at 6.32 months. This reflects an 18.9% increase from June 2024 when inventory levels were at 5.31 months. With anything above seven months typically considered a buyer's market, the Austin area is now only marginally shy of that threshold, and several submarkets have already crossed firmly into buyer-favored conditions. Cities such as Marble Falls, Liberty Hill, Lago Vista, Dale, and Spicewood all report double-digit months of inventory, indicating substantial supply surpluses in those regions.

The imbalance between supply and demand is further evident in the New Listing to Pending Ratio, which currently sits at 0.64. The 25-year average for this ratio is 0.81, and even in weaker markets like 2001 or 2002, the ratio hovered around 0.53 to 0.57. The current ratio indicates that for every 100 new listings, only 64 properties are going under contract—a clear signal of market softness and buyer caution. Year-to-date, the cumulative ratio is 0.67, well below the historical average, further highlighting the supply-demand gap.

New listings themselves remain elevated, with 28,981 properties listed from January through June, representing a 5.1% year-over-year increase and sitting 28.7% above the long-term average. This heightened listing activity suggests that sellers, despite market challenges, continue to enter the market, whether due to life circumstances, financial pressure, or strategic timing attempts. Yet pending contracts have declined by 7.6% year-over-year, totaling 22,366—a modest 2.3% above the historical average but not enough to offset the listing surge.

The implications of this dynamic are clearly reflected in pricing trends. The median sold price now stands at $456,500, down 17% from the May 2022 peak of $550,000. That equates to a $94,000 reduction, marking one of the most significant price corrections Austin has seen in over a decade. The average sold price has similarly contracted to $600,081, down 12% from the 2022 peak of $681,939. More notably, when tracking median sold prices relative to 36 months prior, values are down 14.67%, underscoring the depth and persistence of the market correction.

Looking at appreciation in individual submarkets, the picture remains mixed but generally weak. Of the tracked cities, 13 report year-over-year median price increases, while 17 have seen declines. The divergence between the bottom and top quartile price brackets further illustrates this market bifurcation. The bottom 25th percentile has experienced a 3.5% price decline year-over-year and a 4.9% decline in price per square foot. Meanwhile, the top 25th percentile has seen price stagnation, with no change in median price and only a modest 1.1% decline in price per square foot. This suggests that higher-end properties are proving more resilient, while affordability-driven segments face steeper corrections.

Market health indicators reinforce the buyer-favorable climate. The Market Health Index (MHI) is currently at 20.2%, well below the 30% threshold typically associated with a balanced market, and substantially under the levels seen during Austin's rapid expansion phases. Similarly, the Inventory Stress Index (ISI) sits at just 7.2%, a low reading that favors buyers by highlighting excess inventory and diminished upward price pressure.

Sales density metrics further illustrate the market deceleration. While total sold properties for the first half of 2025 sit at 14,995—8.5% above the long-term average—this headline figure masks significant underlying weakness. On a per capita basis, cumulative sold properties per 100,000 population have fallen to 588, nearly 20% below the historical norm. Moreover, when considering the number of sold properties relative to the total number of licensed Realtors, the figure is 806, a stark 24.1% below average, revealing intensified competition among agents and fewer transactions per agent.

Looking ahead, the market correction is expected to persist. Applying the 25-year compound annual appreciation rate of 5.041% to today's median price of $456,500 suggests it will take approximately 48 months—until May 2029—for prices to fully recover to the May 2022 peak of $551,726, assuming no further declines and steady appreciation from this point forward. However, given the current supply surplus, subdued demand, and economic headwinds, this projection remains optimistic and subject to downward revision.

In conclusion, the Austin real estate market remains in the grips of a correction defined by record-high inventory, subdued buyer activity, falling prices, and an expanding gap between supply and demand. The trend is unlikely to reverse in the near term without a significant contraction in new listings, a marked improvement in affordability, or a resurgence of buyer confidence—none of which appear imminent based on current data. Buyers hold considerable leverage in this market, while sellers face increasing pressure to adjust pricing and expectations to align with today's market realities.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for June 26, 2025.​