AUSTIN MARKET MOMENTUM REMAINS MUTED AS LISTINGS SURGE AND PRICE CORRECTIONS DEEPEN

The July 14, 2025 Austin Daily Real Estate Briefing reveals a marketplace that continues to favor buyers, with inventory pressing near record highs, price reductions becoming increasingly common, and demand indicators falling well below historical norms. While sellers are still holding out on pricing in certain upper-tier segments, overall market liquidity is softening as transaction velocity slows and more homes sit without offers. Amid this normalization, the latest figures offer a window into how the post-pandemic surge has transitioned into a multi-year correction cycle, creating strategic entry points for informed buyers and reminding sellers that pricing power has largely shifted.

As of today, Austin’s residential inventory sits at 17,930 active listings—just 146 below the all-time high of 18,076 recorded on June 27. This figure is particularly notable considering that the city had only 15,503 active listings at this time last year, reflecting a 16% year-over-year increase. Importantly, 57.7% of all active listings have experienced at least one price drop, underscoring the prevailing mismatch between seller expectations and buyer willingness to transact. When more than half of inventory sees markdowns, the signal is clear: the market is saturated, and many sellers are chasing the market downward.

The Activity Index, which measures the ratio of pending to active listings, has fallen to 19.4%, down from 22.4% in 2024—a 13.4% year-over-year decline. This places buyer engagement significantly below its long-term average and reflects a continued erosion of urgency. The weakening Activity Index, coupled with Months of Inventory rising from 5.48 last July to 6.39 today (a 16.7% YoY increase), reinforces that the Austin metro is no longer in a seller’s market. It is steadily entering what economists would classify as a buyer's market—defined by MOI levels exceeding six months.

Pending contract activity further reflects this cooling. July 2025 shows 4,311 pending listings compared to 4,470 in July 2024—a 3.6% drop. Cumulative pending sales from January through July are also down 13.4% YoY, and 5.3% below the long-term average. This is a strong indicator that consumer sentiment remains cautious amid persistent affordability challenges driven by higher mortgage rates and economic uncertainty. Meanwhile, new listings have remained stable, with 31,354 cumulative listings year-to-date, only a 0.6% YoY decline but still 18.7% above the 25-year average. The result is a growing disconnect between supply and demand.

The New Listing to Pending Ratio, both monthly and YTD, continues to widen. July’s ratio is now at 0.52—well below the long-term monthly average of 0.81. For every two new listings, just one goes pending. Year-to-date, the ratio is 0.67, again below the historical trend and a further signal that more homes are being added to inventory than are being absorbed. This is consistent with broader market slowdown patterns, particularly in the wake of post-2021 price peaks.

Speaking of prices, the correction from the May 2022 peak continues to deepen. The average sold price is now $598,171, down from $681,939—an $84,000 or 12.28% decline. The median sold price has fallen even more dramatically, down 18.18% from $550,000 in May 2022 to $450,000 today, a $100,000 drop. This reflects a reversion from the speculative highs that occurred during the pandemic-driven boom, with mid-market inventory bearing the brunt of this correction. Tracking median prices against their 36-month prior levels, today’s median is down 12.62%, reinforcing the idea that we are well into the correction phase.

Segmented data reveals a widening gap between the top and bottom quartiles of the market. The bottom 25th percentile has experienced a -4.41% price decline YoY and a -5.45% drop in price per square foot. In contrast, the top 25th percentile has held relatively stable, with a minor 0.57% price increase and a slight -0.41% decline in price per square foot. This bifurcation suggests that while luxury or move-up properties are experiencing price stickiness due to better capitalized buyers, the entry-level and investor-focused inventory is under much more pressure.

City-level data reinforces these trends. For example, in Georgetown, 64.1% of listings have had a price drop, compared to 58.6% in Austin proper. Communities like Leander, Liberty Hill, and Pflugerville are seeing over 60% of active inventory with reductions. These submarkets, heavily built out during the 2020–2022 construction surge, are now facing direct competition from new builders offering significant incentives, which is suppressing resale pricing power across nearby subdivisions.

Sales density remains relatively weak. Only 2,608 homes were sold in July 2025. From January through July, cumulative closed sales reached 17,707, down 5.7% YoY but still 6.6% above the long-term average. However, that strength becomes diluted when population and agent count are considered. Year-to-date, Austin has seen only 694 closings per 100,000 residents (down 7.9% YoY and 21.3% below average) and just 952 closings per 1,000 agents (down 1.6% YoY and 25.1% below average). This indicates oversaturation among agents competing for a shrinking pool of transactions—a trend likely to push part-time agents out of the market over time.

Looking ahead, the 25-year compound appreciation rate for Austin stands at 4.981%. If we assume that the current median price of $450,000 represents the bottom of the market, the model forecasts that it would take 52 months—until October 2029—for prices to recover to the prior peak of $551,020. This long road to recovery reinforces that real estate is reverting to a more historically grounded pace after years of double-digit annual gains.

The Sold-to-Active Ratio is currently 17.8%, well below the historical average of 31.92%, confirming sluggish turnover. The Market Flow Score, a composite index measuring buyer-seller equilibrium, is now at 5.14—well below the 6.61 average. This normalization of both transaction velocity and price trends suggests that sellers must shift expectations, while buyers now have increased leverage to negotiate not only price but terms, concessions, and repairs.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for July 14, 2025.