Austin’s housing market ends October with higher inventory, slower absorption, and clearer signs of buyer leverage emerging across multiple submarkets.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for October 30, 2025.
Market Overview
As of October 30, 2025, the Austin housing market is defined by elevated inventory, slowing demand, and persistent price corrections that continue to reshape both the resale and new construction segments. Active residential listings now stand at 16,317, up 15.6% year-over-year from 14,119 last October but still below the June 2025 peak of 18,146. Nearly 60% of all active listings have had at least one price drop, reflecting an extended negotiation cycle and the growing sensitivity of buyers to pricing and affordability pressures.
This marks one of the more balanced but sluggish phases of the Austin real estate cycle since 2011. Although cumulative new listings year-to-date total 44,902, up 5.2% YoY and 23.5% above the long-term average, pending activity remains slightly negative — down 2.8% YoY, with 3,936 properties pending compared to 4,051 at this time last year. That imbalance between new supply and contract absorption underscores why the market remains tilted toward buyers in most ZIP codes.
Housing Prices and Market Efficiency
Home values continue to trail well below their 2022 peaks. The average sold price in October is $593,045, representing a 13% drop from the May 2022 peak of $681,939. The median sold price sits at $435,000, down 20.9% from its all-time high of $550,000. In inflation-adjusted terms, the correction exceeds 28% — an extraordinary adjustment that has brought prices back to mid-2020 levels when accounting for CPI erosion.
While prices have softened broadly, the data shows a split market. The bottom quartile of homes has seen prices fall 1.83% YoY, while the top quartile has gained 7.67%, a clear sign of divergence where luxury and higher-end inventory maintain momentum even as entry-level homes stall. This gap reflects both builder incentives at the lower end and a stronger influx of cash or relocation buyers at the top end who are less rate-sensitive.
Activity Index and Demand Momentum
The Activity Index, which measures the ratio of pending listings to total inventory, has slipped to 19.4%, down from 22.3% a year ago. That’s a 12.8% decline in transactional velocity, indicating that fewer homes are going under contract relative to what’s available.
Breaking it down further, new construction holds a 26.4% Activity Index, compared to just 16.6% for resale homes — evidence that builders are still driving much of the absorption through discounts, rate buydowns, and closing incentives.
Of the 75 ZIP codes analyzed, 26 are in the “crisis or freeze” phase (Activity Index below 15%), and another 28 are in the “contraction zone” (15–20%). Only 8 ZIPs show equilibrium or better. That means more than two-thirds of the Austin market is still operating under buyer-favorable or neutral conditions, despite steady new listing volume.
Inventory and Market Balance
Months of Inventory (MOI) — one of the best indicators of market equilibrium — has climbed to 5.79 months, up 14.8% YoY from 5.04 last year. The City of Austin’s own MOI is 5.31 months, representing a 22% increase year-to-date. Across the region, buyer leverage is building, especially in areas like Lago Vista (8.38 MOI), Marble Falls (8.12 MOI), and Bastrop (6.70 MOI).
Only 8 ZIP codes currently qualify as “seller control” (under 120 days of inventory), while 28 fall into the neutral zone (150–207 days), and 18 show buyer control (270+ days). This sustained elevation in inventory suggests that even with stable pricing in select pockets, the broader market is still digesting excess supply from both builders and individual sellers.
Sales Performance and Market Flow
The total number of homes sold in October is 2,462, and cumulative year-to-date sales now total 25,710, down 3.0% YoY. While that number remains 7.6% above the long-term average, it’s still 20.7% below historical norms when adjusted for population growth — indicating that per-capita sales volume remains significantly weaker than pre-2020 levels.
The absorption rate — the ratio of sold homes to active listings — sits at 13.06%, far below the historical average of 31.7%. Similarly, the Market Flow Score (MFS), a composite measure of overall market efficiency, has dropped to 3.05 — less than half of its long-term average of 6.58. Together, these metrics confirm that while inventory is ample, the pace of sales relative to supply remains slow, reflecting affordability challenges and buyer hesitation in the face of volatile interest rates.
Long-Term Outlook
Historically, Austin real estate has appreciated at an annualized 4.838% rate over the past 25 years. If the current median price of $435,000 represents the market’s bottom, returning to the prior peak of roughly $551,000 would take about 63 months (through late 2030) at that compound rate.
That projection reinforces that the next phase of the market will likely be defined by gradual recovery, not a rapid rebound. Austin’s fundamentals — population growth, job diversification, and relative affordability compared to coastal metros — remain solid, but the pace of appreciation will be slower and more linear until excess supply burns off and mortgage rates stabilize.
Implications for Buyers, Sellers, and Agents
For buyers, this environment offers improved selection and more room to negotiate. With 60% of listings experiencing price drops and nearly six months of inventory, there’s time to evaluate homes carefully without the pressure seen in past years.
For sellers, realistic pricing is critical. The market punishes overpricing quickly, as evidenced by widespread markdowns across suburban cities like Georgetown, Liberty Hill, and Kyle. Homes priced accurately within 3–5% of market value continue to sell, but those listed above market sit far longer and often require multiple reductions.
For investors, the calculus has shifted toward yield and long-term value creation rather than short-term appreciation. Cap rates are stabilizing as rents flatten, but the entry points for well-located assets are far better today than in 2022.
For agents, these numbers underscore the need to lead with data. Understanding local Activity Index and Months of Inventory levels by ZIP code is now essential to guiding clients through pricing discussions and contract negotiations.
Market Forecast
The Austin real estate forecast for late 2025 calls for a continued correction through the winter, with transaction volumes likely to stay subdued until early 2026. Builders are expected to moderate new supply entering the market, which should help slow inventory growth and prevent a deeper price decline.
Once interest rates begin trending down again, expect pent-up demand — particularly from sidelined move-up buyers — to reenter the market. That dynamic, combined with slower new listing growth, could push the Activity Index back toward the low 20% range by mid-2026, marking the start of a slow normalization phase.
Conclusion
Austin’s housing market remains in a state of reset rather than recovery. With inventory up 16% YoY, nearly 60% of listings showing price adjustments, and a median price still 21% below peak, the data continues to favor informed buyers and realistic sellers. While demand remains lower than average, the fundamentals for long-term stability are in place — just not yet aligned for a full rebound.
