Austin Real Estate Market Update – May 26, 2025
Austin Housing Market Surpasses All-Time Inventory High as Buyer Demand Stalls
Austin’s real estate market reached a new milestone on May 26, 2025, with active residential listings climbing to a record 17,337 properties—the highest number ever recorded in the MLS. Despite this historic surge in inventory, buyer activity continues to lag, deepening the market imbalance and reinforcing buyer-favored conditions across the region.
The growing disconnect between supply and demand is most evident in the absorption data. Year to date, 23,977 new listings have entered the market—up 30.4% from the long-term average—while only 18,062 properties have gone pending. This 5,915-unit gap marks the largest five-month deficit since 2004 and signals significant strain on market dynamics. With listings piling up faster than contracts are written, the New Listing to Pending Ratio for May has plummeted to just 0.54, well below the 25-year average of 0.81.
Buyer urgency has continued to erode. The Activity Index—a real-time measure of demand calculated by the percentage of active listings under contract—has dropped to 22.2%, down from 25.9% at this time last year. Meanwhile, the Months of Inventory figure has increased to 6.21, a 22% year-over-year jump, confirming a definitive shift toward a slower market cycle where buyers regain leverage.
This sluggish demand is forcing more sellers to adjust their pricing strategies. As of this week, 51.4% of all active listings have experienced a price drop, with price pressure particularly acute in Liberty Hill, Lago Vista, and Jarrell. In the city of Austin, over 52% of listings have undergone at least one price reduction, and that percentage is even higher in many outlying areas.
Sales activity, while moderately above historical averages, remains well below last year’s pace. Cumulative sales from January through May total 11,963, a figure that is 8.9% lower than the same period in 2024. Sales density—measured per capita and per agent—is also trending down, indicating softer demand even as inventory levels rise.
Price trends confirm a market correction in progress. The median sold price for May 2025 stands at $455,000, a 17.3% decline from the May 2022 peak of $550,000. The average sold price is now $594,340, down 12.85% over the same timeframe. Market projections suggest it could take until 2029 to return to prior peak pricing, assuming a consistent annual appreciation rate of just over 5%.
In May 2025, both the top and bottom quartiles of the Austin housing market are experiencing downward price adjustments, though at varying rates. Homes in the top 25th percentile—typically representing higher-end or luxury properties—have seen a year-over-year median price decline of 1.5%, with the average price per square foot down 3.1%. Meanwhile, the bottom 25th percentile—typically more affordable entry-level homes—has experienced a sharper 3.3% decline in median price and a 2.8% drop in price per square foot. These parallel declines across price tiers suggest that pricing pressure is broad-based, affecting both premium and budget-friendly segments of the market. Buyers across all price points are exhibiting increased caution, and even traditionally resilient market segments are adjusting downward to align with softer demand.
The data paints a clear picture: Austin’s housing market remains in correction mode. Buyers are firmly in the driver’s seat, inventory is outpacing demand, and sellers must respond with compelling pricing to remain competitive.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for May 26, 2025.
Austin Real Estate Market – Frequently Asked Questions (May 26, 2025)
What is the current state of the Austin housing market as of May 2025?
As of May 26, 2025, the Austin housing market is experiencing historic inventory levels and a sharp imbalance between supply and demand. Active residential listings have surged to a new record of 17,337, surpassing the previous high set just days earlier. Year to date, 23,977 homes have been listed in the Austin-area MLS—30.4% above the historical average—while only 18,062 properties have gone under contract. This 5,915-unit absorption gap is the widest in over 25 years. The New Listing to Pending Ratio is just 0.54 for May and 0.66 year to date, far below the 25-year average of 0.81. The Activity Index, which measures the percentage of active listings under contract, has declined to 22.2% from 25.9% a year ago. These metrics confirm a market correction in progress, with buyers holding the advantage and sellers facing increased pricing pressure.
How much housing inventory is available in the City of Austin right now?
As of May 26, the City of Austin has 5,494 active residential listings. The Months of Inventory (MOI) has increased to 6.25—up from 4.36 in January—representing a 43.4% year-over-year gain. This level signals clear buyer’s market conditions. Some suburban markets are experiencing even steeper increases. Marble Falls has jumped 120.7% in MOI year to date, reaching 11.00. Cedar Park, Leander, and Liberty Hill are also seeing inventories double or rise by more than 80%. Meanwhile, a few areas like Del Valle (-16.6%) and Hutto (-26.4%) have actually seen inventory contract. These hyperlocal trends make it critical for buyers and sellers to evaluate supply conditions by neighborhood, not just citywide.
What does the New Listing to Pending Ratio of 0.54 indicate for the Austin housing market?
A New Listing to Pending Ratio of 0.54 means that for every two homes listed, barely one is going under contract. Historically, this ratio averages 0.81, so today’s number signals slower absorption and waning buyer urgency. The year-to-date figure of 0.66 reinforces the same trend: supply is far outpacing demand. This ratio is a key measure of market balance—and right now, it's heavily tilted toward buyers. Sellers should be prepared for longer marketing times and stronger pricing competition, while buyers benefit from more choices, negotiable terms, and less pressure to act quickly.
Is buyer activity increasing or decreasing in the Austin real estate market?
Buyer activity is trending downward. Between January and May 2025, 18,062 properties have gone pending—just 1.0% above the historical average but down 1.9% from the same period in 2024. The Activity Index has dropped to 22.2%, down from 25.9% a year ago. These declines reflect a cautious buyer pool, slowed by affordability concerns, economic uncertainty, and ongoing price corrections. Although there is a record number of homes on the market, buyers are moving more selectively, often expecting price drops or incentives before submitting offers.
How are Austin home prices trending in May 2025?
Austin home prices continue to decline from their pandemic-era peak. The median sold price in May is $455,000—a 17.27% drop from the high of $550,000 in May 2022. The average sold price has fallen to $594,340, reflecting a 12.85% decrease. Price reductions are widespread, with 51.4% of all active listings having lowered their asking price at least once. Even the top and bottom quartiles of the market are showing weakness, with luxury home values down 1.5% and entry-level homes falling 3.3% year over year. In this slower market, competitively priced homes are the ones that sell—those that aren't are sitting longer, especially as buyer urgency continues to fade.
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