Austin housing continues to reset as inventory climbs, demand slips, and price pressure remains the dominant force shaping the market.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for Tuesday December 02 2025.
Austin real estate continues to move through a slow and technical correction phase, defined by higher than normal inventory, softer buyer activity, and a pricing environment that remains well below the 2022 peak. Today’s update shows 14,598 active listings across the Austin area, which is a meaningful increase from last year and a clear reflection of how supply has expanded faster than demand. With more than half of all listings now registering at least one price drop and a resale Activity Index sitting firmly in the contraction range, the Austin housing forecast continues to show a market that is still working through excess supply and slower absorption. This remains one of the most data rich shifts we have seen in years and it will continue to carry implications for buyers, sellers, investors, and agents.
Active inventory climbed 14.9 percent from this time last year. Even though the number has retreated from the recent high of 18,146 in June, today’s count of 14,598 confirms that supply is still well above historical norms. A market with this much active inventory naturally experiences more competitive pricing among sellers and takes longer for absorption to rebalance. The fact that 57.5 percent of all active listings have already undergone at least one price drop reinforces how difficult it has been for sellers to maintain price strength. In markets with oversupply, buyers tend to gain leverage because they have more options and more time to decide.
Cumulative new listings from January through November reached 47,870. That is 5.5 percent higher than last year and 23.2 percent above the long term average. This is one of the clearest markers of how supply continues to outpace demand. A typical healthy market stays close to its historical norms in new listing volume. However, Austin has delivered several consecutive years of elevated new listing activity. Even with population growth and strong in-migration, the region has tilted into an inventory heavy environment that requires stronger demand to absorb it. Without that stronger demand, inventory continues to rise and price pressure becomes more common.
Pending sales remain nearly identical to last year with 3,820 compared to 3,809, which is a difference of only 0.3 percent. On the surface, this looks stable. However, when you compare pending contracts to total inventory, the imbalance becomes clear. Cumulative pending activity from January through November reached 41,046. That is one percent below last year but still 7.3 percent above average. The challenge is not the count itself, but the context. This is not enough demand to offset the surge in new listings, and this imbalance continues to shape the Austin real estate forecast over the coming months.
The Activity Index for 2025 sits at 20.7 percent compared to 23.1 percent last year. That is a 10.1 percent year over year decline. The index is one of the strongest real time indicators of buyer engagement because it measures pending contracts as a share of available inventory. A lower index means that fewer homes are being absorbed relative to supply. New construction shows a higher Activity Index at 27.13 percent, while resale is significantly lower at 17.90 percent. This wide spread between builders and resale sellers has been one of the defining features of the current cycle. Builders have been aggressive with incentives, rate buydowns, and pricing adjustments. This has allowed new construction to capture more demand, leaving the resale segment with weaker absorption and longer market times.
The market phase classification for resale shows that 53 percent of the market falls in the contraction range where the index sits between 15 and 20 percent. An additional 30 percent of the market is in the crisis or freeze category with Activity Index values below 15 percent. Only a small fraction of the market is showing anything close to expansion or equilibrium. This gives sellers a clear message. Buyers are selective, price sensitive, and unwilling to stretch above fair market value. Properties that are priced thoughtfully and are move in ready still perform well, but the broader market is shaped by caution and supply pressure.
The New Listing to Pending Ratio for the month sits at 0.89. This means there are eighty nine new listings entering the market for every one hundred pending contracts. While this is an improvement from earlier in the year, it still leans toward supply growth rather than balance. The year to date ratio is 0.73 compared to the twenty five year average of 0.82, which confirms how much 2025 has been tilted toward higher listing volume. When more listings arrive than pending contracts can absorb, inventory expands and pricing becomes more competitive. That is exactly what the Austin housing market has been experiencing for most of this year.
Months of Inventory climbed from 4.48 last year to 5.20 this year, an increase of sixteen percent. Months of Inventory is one of the clearest indicators of market temperature. The rise confirms that buyers now have more control over pace and negotiation. In resale, the distribution across market categories shows a heavy tilt toward buyer advantage and buyer control. Homes with fewer than 120 days of inventory are rare, while many areas fall into the 210 day and above range which favors buyers. Some cities like Smithville, Marble Falls, and parts of Burnet County show double digit months of inventory. These areas experience significant downward pricing pressure whenever inventory exceeds demand for extended periods of time.
Sales data for November shows 1,903 closings. That is a meaningful drop compared to peak seasons and reflects the lower absorption we have been tracking all year. Cumulative sales from January through November total 27,617. That is 4.3 percent lower than last year but still 6.8 percent above the long term average. This is a sign that Austin still has transactional health, but it is operating below what is needed to pull inventory back into balance. Sales per 100,000 population landed at 1,078, which is down 6.5 percent year over year and sits 21.3 percent below historical norms. This population adjusted metric is one of the most important long view indicators because it removes the noise created by population growth.
The average sold price in November was 568,763 dollars. This is down from the May 2022 peak of 681,939 dollars which represents a 16.60 percent decline from the highest point. The median price is 429,990 dollars, which is down 21.82 percent from the May 2022 peak of 550,000 dollars. These are not small adjustments. They represent real price normalization that has played out over two and a half years. Median price performance over thirty six months sits at negative 6.52 percent, which signals that appreciation has not only flattened but has reversed in real terms. When adjusted for normal compound appreciation of roughly 4.79 percent annually, the data suggests it could take about sixty seven months to return to peak values assuming the market has now reached its bottom.
The top and bottom quartiles show different price paths. The lower twenty fifth percentile saw prices fall 1.15 percent year over year with price per square foot down 3.29 percent. The upper twenty fifth percentile saw prices rise 2.22 percent, although price per square foot still declined slightly at 0.07 percent. This split tells us the softer inventory pressure is hitting the lower priced segment harder than the upper tier. At the same time, the luxury market is still facing elevated supply and longer days on market, even though pricing appears more resilient on the surface.
The absorption rate sits at 14.81 percent which is less than half the historical average of 31.64 percent. Low absorption means inventory accumulates faster than it is sold. This creates downward pressure not only on pricing but also on negotiation patterns. Buyers gain the ability to ask for concessions, repairs, and seller credits. As this dynamic repeats month after month, it reinforces a market identity shaped by caution, leverage, and slower confidence among buyers.
The Market Flow Score sits at 5.00 compared to the long term average of 6.58. This index evaluates several layers of supply and demand performance and compresses them into a single number. A score near 5 indicates a slow and supply heavy market with inefficient turnover. These conditions do not produce strong upward price momentum. They favor a continuation of the normalization phase and reward buyers who value optionality and negotiation leverage.
Overall, the Austin housing market remains firmly positioned in a correction and normalization cycle. Inventory is elevated, pending contracts remain stable but not strong enough to counteract supply, and both median and average prices sit well below their peak values. Buyers continue to have more leverage than sellers and the pace of sales remains soft compared to historical norms. As Austin continues to work through accumulated inventory, the path toward recovery will likely be gradual rather than sudden. Continued monitoring of the Activity Index, pending trends, and months of inventory will provide the clearest signals for when the market begins shifting into a healthier balance.
