Austin Real Estate Market Update – June 05, 2025
Austin Housing Market : Inventory Builds, Demand Slows, and Prices Adjust
As of June 5, 2025, the Austin-area housing market is demonstrating unmistakable signs of strain, despite maintaining a steady volume of buyer and seller activity. From a broker and analyst’s standpoint, this is a market caught between overabundant supply and cooled demand, shaped by affordability pressures, elevated mortgage rates, and a surge of speculative inventory introduced post-pandemic. Every key metric—inventory levels, price drops, activity index, pending ratios—paints a picture of a market in the middle of a prolonged correction rather than a short-term dip.
The number of active residential listings currently sits at 17,168, just shy of the all-time high of 17,337 recorded on May 26, 2025. The pace of accumulation suggests a persistent buildup of unsold inventory, with 53.5% of all active listings showing price reductions. This ratio alone is a clear signal that sellers are having to adjust expectations downward to attract interest, an increasingly common occurrence in today’s environment. When over half the market is engaging in price concessions, it confirms that demand is no longer meeting the supply at previously established price levels.
This is further reinforced by the Activity Index, which now stands at 21.5%—down from 25.0% a year ago. The Activity Index reflects the share of active listings going under contract within a specific time period. A decline of 14% year-over-year is not trivial; it shows a deceleration in absorption rate and signals that properties are lingering longer on the market. Months of Inventory (MOI) echoes this with an increase from 5.32 to 6.10—a 13.6% rise—confirming a shift from a neutral to a solid buyer's market. This increase in inventory coupled with weaker demand gives buyers significantly more leverage and forces sellers and builders alike to adjust to the new normal.
Cumulatively, 24,986 new listings hit the market from January through May 2025, which is 35.6% above the 25-year historical average and up 8.5% year-over-year. This oversupply is the central pressure point. The market isn't soft because listings are disappearing—it's soft because new listings continue to flood in, and demand isn't scaling to match it. This disconnect between input and absorption is also visible in the pending contracts. Compared to 4,844 pending listings in 2024, this year’s May figure stands at 4,701—a decrease of 3.0%. More notably, the cumulative pending sales for the year-to-date are down 6.5% year-over-year, sitting at 19,047, even though this is still 6.2% above the 25-year average. That delta between average and year-over-year performance illustrates a stagnation of forward momentum in buyer behavior despite a technically “normal” level of activity when benchmarked historically.
One of the most telling statistics is the New Listing to Pending Ratio, which is currently 0.59. For context, the 25-year average is 0.81. This ratio is a leading indicator that quantifies the pace at which listings convert to contracts. A ratio under 0.60, especially when sustained over multiple months, is indicative of a market imbalance where listings are accumulating faster than buyers are willing to absorb them. The last time we saw a cumulative new-to-pending difference this high was in 2004, with 2025 recording a difference of 5,939 more listings than pendings year-to-date. This is a major concern when viewed alongside declining pricing metrics and slow absorption.
Sales volume is also slowing. In May 2025, there were 2,924 closed sales, bringing the year-to-date total to 11,972. That’s down 8.8% compared to last year, despite being 9.9% above the historical average. But these aggregate numbers obscure some key context: on a per capita basis, sales density is well below average. When adjusted for population, only 470 homes were sold per 100,000 residents—a figure that is 18.7% below average and down 10.9% from the prior year. When indexed by agent activity, sales per 1,000 REALTORS® are also down 23.4% from the average, coming in at 643. This metric reinforces that while homes are selling, they’re not selling at a pace sufficient to support the current agent base or inventory levels.
Price performance continues to reflect downward pressure. The average sold price in May 2025 was $592,148, down 13.17% from the May 2022 peak of $681,939. More significantly, the median sold price has fallen from $550,000 to $450,000 during that same period—a sharper 18.18% decline. In dollar terms, the average home price has lost about $90,000, and the median home about $100,000, from peak values. The current median price now aligns closely with what it was three years ago, which is consistent with the data showing a -18.18% return when tracking today’s median against the 36-month rolling median. This steep of a rollback—coming on the heels of the most aggressive appreciation cycle in Austin's history—underscores how overheated the market became and how broad the subsequent correction is proving to be.
Looking at appreciation cycles, the long-term compound annual growth rate for Austin home prices is 4.981%. Applying that figure to today’s median of $450,000, it would take until August 2029—roughly 52 months—for prices to return to their previous peak of $551,386, assuming no further declines. This sets a realistic, data-backed horizon for full market recovery if the correction bottoms in mid-2025. However, that timeline could easily extend further depending on macroeconomic conditions, consumer confidence, and interest rate trends.
Segmentation by price tier shows an across-the-board decline. The lower 25th percentile has seen prices fall by 2.7% year-over-year and price per square foot drop by 3.4%. The top 25th percentile is only marginally better, down 1.7% in price and 3.1% in price per square foot. The correction is clearly market-wide, affecting both entry-level buyers and high-end purchasers, suggesting no sector is immune from current market pressures.
Drilling down into city-level appreciation, the data shows that only 11 cities in the area reported positive year-over-year median sold price appreciation, while 18 posted declines. The net negative trajectory further illustrates the broad-based impact of this market cycle. Meanwhile, two critical composite indicators tell us the market’s momentum is working against sellers. The Market Health Index, which evaluates the balance between buyer activity and inventory, sits at 19.3%. A figure under 30% is consistent with a strong buyer’s market. Similarly, the Inventory Stress Index is currently at 6.3%, reinforcing that there is minimal upward pressure on prices from constrained supply—instead, excess inventory remains the challenge.
In summary, the Austin real estate market remains in the depths of a multi-year correction. While cumulative activity levels remain above historical averages in some areas—such as new listings and total pending volume—year-over-year comparisons paint a far more sobering picture. Buyer activity has slowed, inventory has grown to record levels, and pricing continues to adjust downward. From a broker’s perspective, the implications are clear: sellers must be coached to price aggressively and strategically from the outset, and buyers should be guided toward leverage opportunities in a softening landscape. From an analyst’s perspective, all leading indicators continue to signal ongoing weakness with no imminent inflection point, barring significant policy or rate shifts. The current data set, viewed holistically, reflects a normalized but overextended market resetting after an extraordinary run-up. The road to equilibrium will likely be measured in years, not months.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for June 05, 2025.
Austin Real Estate Market – Frequently Asked Questions (June 5, 2025)
1. Is the Austin housing market still declining, or has it stabilized?
As of June 5, 2025, the Austin housing market remains in a drawn-out correction. Active residential listings have reached 17,168, just below the all-time high of 17,337 recorded in late May. Over 53.5% of active listings now show price reductions, signaling continued downward pressure on pricing. The Activity Index has dropped to 21.5%, down from 25.0% a year ago, while Months of Inventory has increased to 6.10—a 13.6% year-over-year rise. These combined indicators confirm that the market has not yet stabilized and remains in a buyer-favorable environment.
2. What does a New Listing to Pending Ratio of 0.59 mean for buyers?
A New Listing to Pending Ratio of 0.59 means that for every 100 new listings, only 59 are going under contract. This is significantly below the 25-year average of 0.81 and reflects a pronounced supply-demand imbalance. For buyers, this creates a strategic advantage—there are more choices available, less competition per listing, and sellers are increasingly willing to negotiate. This environment allows buyers to be more selective and price-sensitive, especially when homes sit on the market longer and more than half are seeing price drops.
3. How does current market activity compare to last year?
Compared to this time in 2024, market activity has slowed across the board. Pending listings are down 3.0% for May alone and have declined 6.5% year-to-date. At the same time, cumulative new listings from January through May are up 8.5% year-over-year, totaling 24,986—a figure that is 35.6% above the 25-year average. This imbalance between new supply and weakening buyer activity is widening the gap in unsold inventory, contributing to the elevated Months of Inventory figure and further confirming the shift toward a buyer’s market.
4. Have home prices in Austin reached their lowest point yet?
As of June 2025, there is no clear signal that prices have fully bottomed. The median sold price remains at $450,000, down 18.18% from the peak of $550,000 in May 2022. The average sold price is now $592,148, down 13.17% from its high. While these declines have persisted over three years, the continued rise in inventory and decline in demand suggest there could still be room for further softening—particularly in areas or price points where competition remains thin. Until leading indicators like the Activity Index or New Listing to Pending Ratio begin trending upward, it would be premature to call a definitive bottom.
5. How much buyer activity is there in relation to Austin’s population and agent base?
Despite sales volume totaling 11,972 from January to May—9.9% above the 25-year average—the market is underperforming when adjusted for population and REALTOR® participation. Only 470 homes have sold per 100,000 residents, which is 18.7% below the long-term average. Similarly, only 643 homes have sold per 1,000 REALTORS®, a figure that is 23.4% below average. These metrics suggest that while absolute transaction numbers may seem healthy, relative buyer activity is significantly lagging behind the region’s growth and agent population, highlighting how much more inventory the market is carrying relative to absorption capacity.
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