Austin Real Estate Market Update: Monday Touch Point - March 3, 2025

Welcome to the Monday Touch Point update for March 3, 2025, hosted by Dan Price, Broker with Team Price in Austin, Texas. This week’s session dives into critical real estate market trends, economic indicators, and local data, offering actionable insights for buyers, sellers, and industry professionals. Below, we break down the key takeaways from this data-packed discussion.

Record-High Inventory and New Listings : The Austin housing market is experiencing a significant surge in inventory. As of March 3rd, there are 12,227 active homes on the market, up 16.7% year-over-year and 5.21% month-over-month. New listings for the week of February 24th to March 3rd reached 1,128, with expectations to surpass 1,200 by day’s end. For February 2025, a staggering 3,996 new listings hit the market—down slightly from 2024’s astronomical 4,079 but still reflecting a robust 27.8% increase in cumulative inventory (January + February) compared to the 25-year average.

The new listing-to-pending ratio, a key market indicator, sits at 0.69 for 2025 so far, signaling a tangible increase in inventory. This slowdown is further evidenced by a 14.7% year-over-year drop in pending sales (4,057 currently pending), contributing to a market where properties linger longer.

Economic Indicators: Yield Curve Inversion : A notable economic event highlighted this week is the inversion of the 10-year and 3-month Treasury yield curve—a widely recognized recessionary signal. While the last inversion didn’t lead to a recession, its recurrence has sparked discussion across economic channels like CNBC and Fox Business. The bond market also pulled back after the Institute of Supply Chain Management’s pricing index exceeded expectations, hinting at inflationary pressures. Mortgage rates remain steady, with FHA loans at 6% and conventional 30-year rates at 6.625%, per Robert's rate sheet.

Market Dynamics: Price Trends and Distress Signals : Despite declining sales (down 28.8% year-over-year in February to 1,683 sold properties), average home prices in Austin jumped 7.1% year-over-year. This spike is attributed to a flurry of high-end sales—think $5M-$12M homes—driven by wealthy buyers shifting funds from an overvalued equity market into real estate as a long-term store of value. However, this trend is seen as a one-off, unlikely to persist beyond March or April.

Meanwhile, distress signals are emerging. The FHA delinquency rate for loans originated within the past 12 months hit 7.05% in 2024—higher than the 7.02% peak during the last housing bubble. Yet, only nine of 52,531 seriously delinquent FHA loans were foreclosed on, thanks to FHA programs deferring payments or reducing monthly costs. As these incentives wane and equity evaporates in a stabilizing market, expect a rise in short sales and foreclosures.

National Context and Local Outlook : Nationally, the Pending Home Sales Index dropped to a record low of 47 in December 2024, with January 2025 at 57—the lowest for any January since 2001, when the data started. Austin mirrors this slowdown, with a 16.8% price drop from its May 2022 peak per the Freddie Mac Home Price Index, ranking it among the top cities correcting from pandemic highs. Team Price predicts continued pricing pressure in 2025 as inventory climbs and demand softens.

Key Takeaways for Austin : For Team Price members, the message is clear: adapt to a shifting market. With 46% of active listings experiencing price drops and new construction leading activity (30.15% activity index), hyperlocal expertise is crucial. The team’s 25% sales increase amidst a 28.8% market decline underscores the value of data-driven strategies and relentless work ethic.

Stay tuned for the next Monday Touch Point as we track these evolving trends. For the full discussion, watch the embedded video below.

Timestamps

0:00 -1:25: Introduction and overview of the Monday Touch Point

1:25 -7:14: New listing-to-pending ratio update (0.76 two weeks ago, 0.56 this week) and open house data (2,977 over 7 days)

7:14 -13:03: Weekly market stats: 1,128 new listings, 249 pendings, 127 price decreases, 189 back-on-market

13:03 -19:41: February 2025 monthly data: 3,996 new listings, 0.69 ratio, pendings down 14.7%, inventory up 7.6%

19:41 -28:20: Sold properties (2,059 in Feb 2025 vs. 2,241 in 2024), National Pending Home Sales Index at record lows

28:20 -37:43: Local sales down 28.8%, prices up 7.1% due to luxury sales, Freddie Mac Home Price Index insights

37:43 -50:40: Inventory at 12,227, distress signals (FHA delinquency at 7.05%), new construction trends

50:40 -57:30: Bond market update (down 2.2 basis points), mortgage rates steady at 6%-6.625%

57:30 -1:02:52: Q&A on tax implications, closing remarks, and schedule updates

Highlights

Inventory Surge: 12,227 active listings, up 16.7% year-over-year; 3,996 new listings in February alone.

Yield Curve Inversion: 10-year and 3-month Treasury yield curve inverted, raising recession concerns.

Price Paradox: February sales dropped 28.8% year-over-year, yet average prices rose 7.1% due to luxury cash deals.

Distress on the Horizon: FHA delinquency rate at 7.05%, exceeding the 2008-2009 peak, with foreclosures suppressed by FHA programs.

National Slowdown: Pending Home Sales Index hit a record low of 47 in December 2024, with Austin down 16.8% from its May 2022 peak.

Daily Market Summary12,227 (+16.7% YoY) : Active Residential Listings
0.56 Ratio : New Listing to Pending Ratio
97.26% : Sold Price to List Price Ratio
6.625% : 30-Year Weekly Mortgage Rate
4.174% : 10-Year Bond Yield