Austin’s housing market closes October with expanding inventory, subdued demand, and widening leverage for buyers as price corrections continue across most submarkets.
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The Austin housing market continues to navigate a slower sales environment this fall, marked by higher inventory levels, softer buyer activity, and continued price recalibration from the 2022 peak. As of October 24, 2025, the Austin-Area MLS reports 16,453 active residential listings, up 14.9% year over year from 14,314 at this time last year. That increase in supply — combined with a 59.6% rate of price reductions — paints a clear picture of an increasingly price-sensitive market where sellers are competing for a shrinking pool of active buyers.
Pending sales have dipped modestly compared to last year, falling 5.7% year over year to 3,919. The Activity Index, which measures how efficiently listings convert to contracts, dropped from 22.5% in 2024 to 19.2%, a 14.5% relative decline. This shift confirms that Austin’s market has decisively transitioned from a balanced phase to a softening-to-contraction phase, especially in the resale segment, where the index stands at 16.39% — solidly within what Team Price classifies as the “Danger Zone.”
Market Overview
With nearly six months of inventory, the Austin housing market remains tilted toward buyers. Months of Inventory increased to 5.82, up 14.2% year over year and 22.4% year to date, reflecting both new supply and slower absorption. By comparison, a healthy equilibrium typically ranges between four and five months. In October 2024, that figure was 5.10 months; today, most Austin-area cities now hover between 5.0 and 7.0 months, with outer markets like Burnet, Liberty Hill, and Bastrop exceeding double digits.
At a granular level, the Team Price market model identifies 12 cities and 26 ZIP codes operating within contraction territory (15–20% Activity Index) and another 12 cities and 27 ZIP codes below 15%, signaling a freeze-level pace of buyer engagement. In contrast, only two ZIPs — 78728 and 78727 in north-central Austin — remain in “Expansion,” while seven areas are balanced. This structural distribution confirms that buyers currently hold strong negotiating leverage in the vast majority of Austin’s submarkets.
Housing Prices
Prices continue to adjust from the 2022 highs. The average sold price for October sits at $602,924, down $79,015 (−11.6%) from the May 2022 peak of $681,939. The median sold price stands at $446,995, reflecting an 18.7% decline (−$103,005) from that same peak of $550,000.
Compared to 36 months ago, the current median is 4.89% lower, marking the first time since mid-2020 that long-term appreciation turned negative on a rolling three-year basis. However, using Austin’s historical 25-year compound appreciation rate of 4.953%, prices would return to their prior peak by April 2030, assuming steady growth from today’s base.
Notably, price performance has diverged sharply between market segments: the top 25th percentile of homes shows a 6.1% annual price gain, while the bottom 25th percentile declined 3.2% in median price and 5.1% in $/sqft. This gap illustrates that higher-end buyers remain active and capitalized, while entry-level and mid-tier listings face affordability constraints and longer market times.
Regional Trends
Among the 29 tracked Austin-area cities, only nine report year-over-year median price gains, while 20 show declines. Geographic variation is significant: Bastrop, Liberty Hill, and Kyle continue to register among the steepest slowdowns, with higher inventory and substantial price drops. Georgetown and Leander maintain moderate activity but are weighed down by excess new construction supply. Central Austin ZIP codes such as 78731, 78757, and 78704 show stable prices relative to last year but lower transaction volume. Peripheral markets like Lago Vista, Spicewood, and Wimberley remain in freeze conditions, with Activity Index levels below 11%.
The dispersion in months of inventory by city confirms this spread: Austin proper sits at 5.33 months, while suburbs like Burnet and Spicewood hover near 11 months, reflecting slow turnover and buyer hesitation in the higher-priced rural fringe.
List-to-Sale Price Performance
The high share of listings with at least one price reduction — 59.6% across the MLS — is a powerful indicator of seller adaptation to buyer behavior. Cities like Liberty Hill (67.9%), Bastrop (66.5%), and Cedar Park (66.4%) lead the region in markdown activity, while Dripping Springs (51.2%) and Wimberley (51.2%) show slightly less discounting but slower absorption overall.
These reductions signal a market governed by data, not emotion: sellers who price according to comparable absorption trends are still closing transactions efficiently, while overpricing continues to stall listings. For buyers, this climate presents meaningful opportunities to negotiate concessions, rate buydowns, or closing cost coverage — tactics that were rarely accepted during the 2021–2022 surge.
Market Flow and Absorption
The Absorption Rate, representing the share of active listings sold in a given period, sits at 9.79%, drastically below the historical average of 31.68%. This suggests that fewer than one in ten active listings are selling each month — a clear sign of sluggish demand. The Market Flow Score (MFS), which aggregates several efficiency metrics into a single benchmark, measures only 1.27 versus a historical average of 6.57, confirming that the Austin housing market remains in a supply-heavy, slow-turnover phase.
Despite this, cumulative sold transactions year-to-date total 25,675, which is only 3.1% below last year but still 7.4% above the long-term average. In essence, while 2025 is slower than 2024, it remains moderately active relative to historical baselines — a reflection of how inflated prior-year volumes had become.
Peak Value Trends
Austin’s current price levels place the market roughly 19% below its May 2022 peak but still 35% above pre-pandemic (2019) levels. This means that while nominal appreciation has reset, long-term owners remain significantly ahead of pre-COVID values. The recent stabilization around the $440K–$450K median range since July 2025 suggests a possible floor is forming, though any sustained rebound will require improved demand-side efficiency — specifically, a rise in pending-to-listing conversion and overall Market Flow Score recovery above 4.0.
If appreciation resumes at Austin’s 25-year average pace of 4.953%, the city’s median price could reclaim peak levels by spring 2030, aligning with broader economic normalization expectations.
Outlook for Buyers, Sellers, and Investors
For buyers, today’s environment represents a clear window of leverage. The combination of expanded inventory, widespread price reductions, and longer market times means buyers can negotiate more aggressively, explore contingencies, and compare listings without urgency.
For sellers, the message is precision: price to the market, not above it. The average home competes against roughly 16,000 active listings, and with more than half already discounting, realistic pricing and strong presentation are essential.
For investors, rental yield remains the pivot. With prices nearly 19% off peak and rents largely stabilized, yield calculations are improving, particularly in submarkets where inventory has outpaced absorption but land values remain strong.
Conclusion
The Austin housing market of late 2025 is one defined by recalibration — a shift away from the feverish competition of past years toward data-driven balance. While inventory continues to rise and absorption remains slow, the fundamentals of long-term demand — population growth, income stability, and steady appreciation — persist. For those navigating this market today, success depends on discipline: knowing the data, reading each ZIP’s absorption curve, and aligning expectations with reality.
