The Market’s Mood Has Shifted—And the Numbers Don’t Lie

Austin’s housing market is entering the late stages of a correction—inventory is high, buyer urgency is low, and the spread between new listings and pending contracts continues to widen. Understanding these conditions is no longer about watching for a return to 2021-era activity; it’s about tracking whether the market is stabilizing, deteriorating, or quietly recalibrating beneath the surface.

As of Thursday, July 10, 2025, active residential listings across the Austin-area MLS sit at 17,713. While this is down slightly from the recent high of 18,076 on June 27, it still marks an elevated level of inventory historically. Over 57.7% of active listings have experienced at least one price reduction, with some submarkets—like Georgetown, Round Rock, and Pflugerville—exceeding 60% of listings seeing price cuts. The pricing climate remains deeply buyer-favorable, with sellers forced to adapt to longer days on market and softening demand metrics.

The Activity Index continues to erode, now at 19.6%, representing a 15% year-over-year decline from 2024’s already muted 23.0%. This confirms a drop in active buyer engagement despite steady or increasing listing volumes. In lockstep with this cooling activity, the Months of Inventory (MOI) has expanded to 6.28, up 17.7% from last July’s 5.34. This is not a spike due to a surge of new listings alone; it's a supply-demand mismatch unfolding over several quarters.

Looking year-to-date, cumulative new listings are at 30,756, down 2.5% from 2024 but still 16.5% above the 25-year average. That elevated supply might typically be welcomed in a high-demand market, but pending listings from January through July sit at just 23,810—down 14.8% year-over-year and 6.8% below average. This divergence is critical. It reflects not only declining affordability and economic uncertainty among buyers but also structural headwinds in the move-up buyer segment and investor retreat.

The ratio of new listings to pending contracts continues to deteriorate. For July, the Monthly New Listing to Pending Ratio is just 0.52. On a year-to-date basis, it sits at 0.67, well below the 25-year historical average of 0.81. This ratio—often overlooked—is one of the clearest indicators of market imbalance. It tells us how many listings must hit the market to generate one pending sale. The lower the ratio, the more efficiently demand is absorbing new supply. Today, we’re in an inefficient market where inventory is building faster than buyers are absorbing it.

The price data continues to underscore the correction narrative. The average sold price now stands at $593,277, reflecting a 13% drop from the May 2022 peak of $681,939—a $89,000 loss in pricing power. The median sold price has fared worse, down 19.09% from its peak of $550,000 to today’s $445,000. That’s a $105,000 decline, and more importantly, it signals how much the entry and mid-tier segments have softened. When we compare current median sold prices to those of 36 months ago, the decline is -13.59%, revealing that most of the post-COVID appreciation has been fully unwound.

Using a 25-year compound annual appreciation rate of 4.934%, it’s estimated that the Austin market would need 55 months—or until January 2030—to recover to the peak median price of $548,181. This long recovery window isn’t a forecast of doom; it’s a reflection of realignment. For buyers, this is meaningful. For sellers anchored to past pricing expectations, it’s a sobering recalibration.

High vs. low price tier comparisons reinforce the bifurcation of market behavior. Homes in the bottom 25th percentile saw a -4.97% decline in price and a -5.05% drop in price per square foot. In contrast, the top 25th percentile experienced a more modest -0.43% decline in price and a -0.88% decline in price per square foot. This suggests greater price resilience in the upper segments, though demand in that category remains thin, driven by rate sensitivity and fewer cash buyers.

The absorption rate, defined as the sold-to-active ratio, is just 17.68%. Historically, Austin has hovered around a 31.92% average. When this metric falls below 10%, the market clearly favors buyers. While we're not at that extreme yet, the direction of movement suggests a buyer-skewed market, particularly in price-sensitive zip codes and among homes without modern upgrades or aggressive pricing.

The Market Flow Score (MFS), which measures efficiency and momentum on a scale from 0 to 10, is now at 5.06, down from the long-term average of 6.61. A reading in the 5s places us firmly in sluggish market territory. MFS is a composite index that reflects not just supply and demand but also velocity—how fast homes are turning over. A low MFS warns of longer marketing times, stale listings, and increasing concessions.

Sales density for the month shows 2,745 homes sold across the region. Year-to-date, Austin has recorded 17,824 sold properties—a 5.1% drop from last year, but still 7.3% above the long-term average. This data point is nuanced: while fewer homes are selling compared to 2024, we’re outperforming the historical average. In other words, this isn’t a collapse—it’s a plateau.

When adjusted for population and agent base, however, the market appears stretched. Year-to-date sales per 100,000 residents have fallen 7.3%, now sitting 20.8% below average. Similarly, cumulative sales per 1,000 Realtors have dipped 0.9% year-over-year and are now 24.7% below average. This indicates increasing competition among agents for fewer transactions and a less efficient market for sellers.

In summary, July 10, 2025, finds the Austin housing market still grappling with imbalance. Inventory is high, price reductions are common, demand is retreating, and affordability remains a barrier. While the correction has largely stabilized, the recovery path will be slow, long, and uneven. For well-prepared buyers, the current environment offers negotiating leverage and greater choice. For sellers, realism and pricing strategy are key.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for June 16, 2025.​