Austin’s Market Momentum Slows as Inventory Climbs and Buyer Activity Retreats

As of Friday, July 25, 2025, the Austin real estate market continues to reflect the dual pressure of rising inventory and lagging buyer activity. With 17,994 active residential listings, the market is nearing its all-time high, just 82 units shy of the record set on June 27. This sustained inventory pressure, coupled with a declining Activity Index and persistently weak pending trends, further cements Austin’s transition into a deep buyer’s market. The latest numbers paint a clear picture: supply continues to expand while demand is failing to keep pace, resulting in elevated months of inventory and downward price pressure across key segments.

Over the past 12 months, active inventory has increased 16.2% compared to the same time in 2024. Even more notable is that 58.4% of these active listings have experienced at least one price reduction, a powerful signal that sellers are adjusting expectations in response to limited buyer urgency. The Austin market’s elevated inventory isn't simply a short-term fluctuation—cumulative new listings from January through July are up 4.9% year-over-year and 24.9% above the 25-year historical average. Sellers are still entering the market in volume, but buyers are not showing up at the same rate.

Pending listings confirm the demand weakness. As of this update, there are 4,371 pending listings, slightly down (-1.4%) from this time last year. While the cumulative pending count for 2025 sits at 25,817—technically 0.7% above the long-term average—it is still down 7.6% from 2024 levels. The Monthly New Listing to Pending Ratio sits at 0.63, a stark contrast from the 25-year average of 0.81. This ratio indicates that for every new listing, less than two-thirds are being absorbed by the market, reflecting severe imbalances between supply and demand.

Austin's Activity Index, which gauges market velocity by measuring active-to-pending dynamics, has declined to 19.5%, down from 22.3% a year ago—a 12.2% year-over-year contraction. Not only does this point to weakening buyer engagement, but it also contributes to growing Months of Inventory, which has now risen to 6.40 months from 5.47 last July. That's a 17.1% increase year-over-year and well beyond the 6.0-month threshold that traditionally marks the line between a neutral and buyer-favoring market. In more local terms, the City of Austin specifically shows a 30.8% increase in months of inventory so far in 2025.

Transaction volume has also taken a hit. Only 2,762 homes sold in July 2025, contributing to a year-to-date cumulative total of 17,924 closed sales. That’s down 4.6% compared to the same period in 2024, though still 7.9% above the long-term average. On a per capita basis, cumulative sold properties per 100,000 population is 703, which is not only 6.8% below last year, but a striking 20.4% below historical norms. Likewise, closed sales per 1,000 Realtors sits at 963—a figure nearly 24.3% below average. This drop reflects both the increasing competition among agents and the constraints of a slowing transactional pipeline.

Price trends offer little relief to sellers. The average sold price across the Austin MLS for July 2025 is $584,139, down roughly $98,000 from the May 2022 peak—a 14.34% decline. Median prices tell a starker story: July’s median sold price is now $440,000, representing a full 20% drop from the market peak of $550,000. When measured against prices from 36 months ago, today’s median is 14.56% lower. Buyers entering the market today are benefiting from a steep discount compared to those who purchased during the market’s peak frenzy in 2022.

Notably, the disparity in price performance between low-end and high-end segments has narrowed. Properties in the bottom 25th percentile saw a 3.46% decline in median price and a 5.27% drop in price per square foot year-over-year. Meanwhile, top 25th percentile homes fared slightly better, with prices down only 1.57% and price per square foot off by 2.82%. These figures suggest a relatively balanced price correction, rather than one isolated to a particular price band.

The Sold-to-Active Ratio now sits at 10.32%, far below the historical average of 31.84%. This metric reinforces that homes are taking longer to sell and many are sitting on the market without offers. The Market Flow Score, a composite indicator of supply/demand balance and velocity, is just 1.31—well below the historical average of 6.59. In short, homes are entering the market faster than they are being absorbed, and price reductions are accelerating to bridge the gap.

Looking forward, a recovery to previous peak valuations won’t happen overnight. Using a long-term 25-year average compound annual appreciation rate of 4.886%, it would take 59 months—or until May 2030—for Austin’s median home price to return to the prior peak of $551,608. This assumes no further price erosion and a steady pace of appreciation beginning today, a best-case scenario contingent on broader economic and lending conditions.

The path ahead continues to favor buyers. With increased leverage, more inventory, and continued price corrections, buyers can afford to be selective and strategic. Sellers, on the other hand, must remain highly responsive to feedback, actively manage pricing strategy, and avoid chasing a fading 2022 market peak. Austin remains a resilient market over the long term, but the near-term landscape demands discipline, realism, and data-driven pricing.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for: July 25, 2025.​