Austin Real Estate Market Update – June 09, 2025
Austin Housing Market Signals a Deepening Buyer’s Market Amid Elevated Inventory and Weakened Demand
Inventory Trends and Market Saturation : As of June 9, 2025, the Austin residential real estate market is exhibiting clear signs of a buyer-dominated environment. Active listings have reached a new cycle high of 17,541, surpassing the previous record of 17,377 set just ten days earlier on May 30. This steady rise in available inventory, paired with the fact that 53.4% of all active listings have undergone price reductions, highlights the pressure sellers are facing to remain competitive in a market with reduced buyer urgency. The current Months of Inventory now sits at 6.25, a significant increase from 5.20 one year ago, representing a 20.1% year-over-year jump. This measure signals a slowing absorption rate and a growing disconnect between supply and demand.
Demand Metrics: New Listings vs. Pending Sales : The year-to-date total of new listings has reached 26,288, which is 17.3% above the long-term historical average but still 4.7% below last year’s level, suggesting that while listing activity remains strong, it is tapering slightly compared to the prior year. Meanwhile, pending sales have dropped to 19,855 year-to-date, which is 18.0% lower than last year and 8.8% below the historical average. For early June, pending contracts total 4,664, a 3.2% decline compared to 4,819 during the same week in 2024. This divergence between new listings and pending activity has driven the Monthly New Listing to Pending Ratio down to 0.47, a figure well below the 2025 year-to-date average of 0.66 and substantially under the 25-year historical average of 0.81. This growing imbalance highlights a sharp decrease in transactional conversion and buyer momentum.
Activity and Market Engagement : The Activity Index, which tracks the share of listings that go under contract within a given timeframe, has fallen to 21.0%, a noticeable drop from 24.5% one year prior, representing a 14.4% decline. The Market Health Index sits at just 19.9%, falling below the 30% threshold typically used to define the onset of a buyer’s market. The Inventory Stress Index is equally telling, measuring only 6.8%, which is well below the 10% level that suggests significant advantage for buyers. Together, these indicators show a market that is not just experiencing softness, but one that is structurally shifting in favor of buyers as elevated inventory and weakening demand converge.
Sales Volume and Density : While headline sales numbers may appear moderate, their deeper context tells a different story. Total properties sold year-to-date now number 14,362, a 10.1% decrease compared to the same period last year. Although this figure is 4.1% above the historical average, the adjusted metrics are more sobering. Sales per 100,000 population are down 23.1% from the average and 12.2% lower year-over-year, while sales per 1,000 Realtors are down 27.1% compared to the long-term norm and 6.2% off from 2024 levels. These statistics confirm that fewer homes are being sold relative to both population growth and real estate agent activity, underlining the reduced transactional velocity and suggesting an oversupply of labor and listings compared to demand.
Pricing and Value Erosion : Median and average pricing data continue to reflect the correction from peak pandemic-era pricing. The average sold price now stands at $617,724, down 9.42% from the May 2022 high of $681,939. The median sold price is currently $465,000, representing a sharper 15.45% decline from its $550,000 peak. Compared to 36 months prior, the median price is still down 13.08%, highlighting the scope and persistence of the market’s retrenchment. Analyzing price changes by market tier shows that the bottom 25th percentile of homes experienced a 4.4% drop in sale price and a 3.7% drop in price per square foot. The top 25th percentile experienced a 2.3% price drop and a 3.6% reduction in price per square foot, indicating broad-based softening that spans across property types and price points.
Recovery Outlook : Using Austin’s 25-year historical annual compound appreciation rate of 5.118%, it is estimated that if the current median sold price of $465,000 represents the market bottom, it would take approximately 43 months, or until December 2028, to return to the previous peak value of $550,000. This forecast assumes steady recovery conditions with no major disruptions and is a reminder that while Austin remains a fundamentally strong housing market, it is not immune to long-term correction cycles and macroeconomic headwinds.
Geographical Variation in Price Appreciation : Price performance has varied across the Austin metro, with 11 tracked cities showing year-over-year gains in median sold prices, while 18 have seen declines. This geographic split illustrates that while the overall market is weakening, pockets of relative resilience still exist, often driven by hyperlocal demand factors such as schools, transit access, or constrained housing stock.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for June 09, 2025, with today's data.
Austin Real Estate Market FAQ
1. Is the Austin housing market crashing in 2025?
No, the Austin housing market is not crashing, but it is undergoing a significant correction. As of June 2025, median home prices in Austin have declined by approximately 15.45% from their peak in May 2022, and average prices are down 9.42%. This price drop reflects a normalization following the rapid pandemic-era appreciation. Inventory has increased to 17,541 active listings, a new cycle high, and over 53% of homes on the market have experienced price reductions. Additionally, pending sales are down 18.0% year-over-year, and Months of Inventory has risen to 6.25, indicating a shift to a buyer's market. While values are down, this is a market correction rather than a collapse, and long-term fundamentals like job growth and migration trends continue to support stability over time.
2. Is now a good time to buy a home in Austin, Texas?
For buyers with stable finances and long-term goals, June 2025 is an advantageous time to buy a home in Austin. With high inventory levels and more than half of listings showing price cuts, buyers have significant leverage to negotiate favorable deals. The Activity Index has dropped to 21.0%, and the Market Health Index sits at just 19.9%, confirming a strong buyer's market. Additionally, affordability has improved since the 2022 peak, with the median home price now at $465,000, down from $550,000. Mortgage rates remain a variable to monitor, but current market conditions favor patient buyers who can capitalize on reduced competition and increasing seller flexibility. If Austin’s long-term appreciation trend of 5.118% annually holds, buyers entering now could see value growth by late 2028.
3. Why are Austin home prices dropping in 2025?
Austin home prices are dropping in 2025 due to a convergence of several key factors. First, inventory levels have surged, reaching 17,541 active listings, which puts pressure on sellers to compete and reduce prices. Second, buyer demand has weakened, as seen in an 18.0% year-over-year drop in pending sales and a Monthly New Listing to Pending Ratio of just 0.47, meaning fewer than half of new listings are going under contract. Rising interest rates and affordability concerns have also sidelined many potential buyers. Furthermore, the market is correcting from an overheated period during the pandemic when prices spiked due to limited supply and high migration. This is a cyclical normalization, not a structural collapse, and aligns with broader national trends in high-growth metro areas.
4. Will Austin home prices go back up in the future?
Yes, historical data suggests that Austin home prices are likely to rebound over time, although the recovery may take several years. According to market projections based on the region’s 25-year compound appreciation rate of 5.118%, if the current median price of $465,000 represents the bottom, prices could return to the 2022 peak of $550,000 by December 2028. Austin’s long-term housing demand is supported by continued population growth, a diversified economy, and high levels of in-migration, particularly from other parts of Texas and out-of-state buyers. However, short-term fluctuations should be expected, and recovery will depend on mortgage rate trends, employment growth, and macroeconomic conditions. Buyers and investors should approach the market with a medium-to-long-term horizon for value growth.
5. How does the current Austin housing market compare to previous years?
The Austin housing market in 2025 is notably cooler compared to the past few years. Compared to June 2024, active listings have increased significantly, while pending sales have dropped. In terms of sales density, there are only 773 closed sales per 1,000 Realtors year-to-date, which is 27.1% below the historical average. On a per capita basis, only 564 homes have sold per 100,000 residents, down 23.1% from the average, showing that transaction volume has slowed relative to both population and agent activity. Meanwhile, the New Listing to Pending Ratio has fallen to 0.47, well below the long-term average of 0.81, emphasizing a growing supply-demand gap. Price reductions are at a multiyear high, and the Inventory Stress Index is just 6.8%, suggesting ample buyer choice. Compared to the rapid appreciation and tight inventory of 2020–2022, the 2025 market is more stable but favors buyers substantially.
Have a Question or Want to Dive Deeper?
If you’d like a custom breakdown of the data, want help interpreting today’s market trends, or just have a question about buying or selling in Austin, let us know. Fill out the form below and a member of our team will get back to you promptly.
