A market still searching for balance as supply outpaces demand and pricing remains under pressure.

The Austin housing market closed out the first day of August with 17,612 active residential listings, a slight retreat from the late-June high of 18,146. While inventory has eased marginally, it remains 16.1% higher than this time last year and nearly 28% above long-term listing averages for this season. This excess supply continues to reshape buyer leverage and pricing dynamics across the metro.

Price reductions remain a defining trend, with 59.1% of all active listings reporting at least one cut since first hitting the market. This persistent need for adjustments underscores a marketplace still grappling with elevated supply and slower-than-normal buyer activity. The Activity Index, measuring the share of active listings moving to pending status, closed at 19.8%, down 9.1% from a year ago and well below historical norms near 30%. Simply put, homes are sitting longer, and fewer are going under contract in any given week.

Year-to-date, new listings have reached 33,989, a 7.7% gain over 2024 and almost 6,900 more than total pendings over the same period. With a cumulative 27,093 homes under contract since January, pending transactions are lagging by 3.1% year-over-year and remain 5.5% above long-term seasonal averages, indicating that while buyers are active, they are not absorbing the excess inventory being introduced.

Months of inventory across the Austin area has climbed to 6.30, up 17.3% from July 2024 levels and now firmly in buyer-market territory. In contrast, a balanced market historically sits closer to 4–5 months of supply. At this pace, the market’s absorption rate continues to signal more negotiating power for buyers, leading to longer days on market and heightened competition among sellers.

Sales volume remains subdued. July closed with 2,281 sold properties, bringing the year-to-date total to 17,462—a 7.1% decline from 2024 levels and 22.3% below Austin’s long-term per-capita sales averages. When measured per 1,000 Realtors in the market, the figure sits 26% below historical norms, underscoring how much current transaction velocity lags behind past cycles.

Prices remain in correction territory. The average sold price for July landed at $582,126, marking a $100,000—or 14.6%—decline from the May 2022 market peak of $681,939. The median price settled at $440,000, a full 20% or $110,000 below its May 2022 high-water mark. Price performance is still negative when compared to 36 months ago, down 14.56%, illustrating how the past three years have rolled back much of Austin’s pandemic-era appreciation.

Using Austin’s 25-year compound appreciation rate of 4.886%, projections suggest it could take nearly five years—until May 2030—for the market to regain a median price of $551,202 if today’s $440,000 median represents the bottom of the cycle. This long recovery horizon reflects not only price adjustments but also the depth of supply and demand imbalances currently defining the region.

Segmented data shows the lower-priced quartile of homes saw a 0.61% year-over-year price dip and a 3.31% decline in price per square foot. The top quartile held pricing steady, but $/sqft still slipped by 2.14%. Across the metro’s 30 largest submarkets, 18 reported median price declines compared to last year, while only 12 saw gains, signaling continued market inconsistency depending on location and price point.

The sold-to-active ratio—a measure of absorption—stood at 14.37%, well below the historical average of 31.85%. This metric alone illustrates the challenge facing sellers: fewer than 1 in 7 listings is closing in a given month compared to roughly 1 in 3 during stronger market cycles. The Market Flow Score (MFS) closed at 3.41 on a 10-point scale, roughly half of Austin’s long-term average of 6.60. This low reading highlights a market still tilted toward buyers, characterized by slower turnover, excess inventory, and moderated pricing.

Looking forward, buyers continue to benefit from broader choice, more time to negotiate, and deeper discounts from list price than in prior years. Sellers face a competitive environment where pricing strategy, staging, and concessions play increasingly critical roles in attracting offers. Without a meaningful increase in pending activity or a slowdown in new listings, Austin’s path back to a more balanced market may extend well into 2026, keeping pressure on values and sales pace alike.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for August 01, 2025.