Austin real estate is closing out 2025 with a clear signal that the market has shifted from rapid correction into a slower, more methodical reset driven by supply, pricing discipline, and selective demand.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for December 31, 2025.
The Austin housing market enters the final day of 2025 with 13,290 active residential listings across the MLS. While this is down significantly from the cycle high of 18,146 reached in late June, it still represents a 20.1 percent increase compared to this time last year. For buyers, this means choice remains abundant compared to the tight conditions seen during the peak years. For sellers, it reinforces that competition is still very real, even though inventory has pulled back from its summer high.
One of the most telling data points right now is pricing behavior. A full 56.0 percent of all active listings have experienced at least one price reduction. That level of repricing confirms that sellers are still adjusting expectations to align with today’s demand environment. This is not a panic driven market, but it is a market that requires accurate pricing and patience. Homes that are priced correctly are still selling, while those that chase the market continue to sit.
Breaking down the active inventory further shows how supply is distributed. Of the 13,290 active listings, 4,003 are new construction and 9,287 are resale homes. New construction continues to play a major role in overall supply, particularly in outlying areas where builders remain motivated to move inventory. Resale sellers, meanwhile, are navigating a more competitive landscape where buyers have leverage but remain selective.
Looking at listing activity over the full year provides additional context. From January through December, the Austin market saw 49,870 new listings, which is up 4.9 percent year over year and a notable 22.4 percent above the long term average. This confirms that supply is no longer constrained. Homeowners are willing to list, and many are doing so despite higher mortgage rates compared to the ultra low levels of prior years.
Pending activity, however, has not kept pace with the increase in listings. Current pending listings stand at 3,184, down 5.0 percent from last year. Of those, 1,367 are new construction and 1,817 are resale properties. While demand has not collapsed, it has softened enough to change the balance of power in many segments of the market.
On a cumulative basis, pending listings from January through December totaled 43,571. That figure is down 1.4 percent year over year but remains 7.4 percent above the historical average. This is an important distinction. Demand is lower than last year, but it is not historically weak. Buyers are still active, just more cautious and more price sensitive.
The Activity Index, which measures pending listings relative to total active supply, highlights this shift clearly. The overall Activity Index for 2025 sits at 19.3 percent, down from 23.3 percent in 2024. That represents a 16.9 percent decline year over year. In practical terms, this tells us that homes are going under contract at a slower pace relative to available inventory.
When separating new construction from resale, the difference becomes even clearer. New construction is currently running an Activity Index of 25.46 percent, while resale homes are at just 16.36 percent. Builders continue to drive much of the transaction activity through incentives and pricing adjustments, while resale sellers face a more challenging environment.
Within the resale market, a large share of submarkets now fall into what can best be described as contraction or danger zone conditions. Nearly half of resale areas are operating with Activity Index levels between 15 and 20 percent, and another significant portion has dropped below 15 percent. These levels historically align with slower sales, rising inventory, and downward pressure on pricing. This does not mean prices are collapsing everywhere, but it does mean that leverage has shifted toward buyers in many neighborhoods.
The new listing to pending ratio reinforces this trend. On a monthly basis, the ratio currently sits at 0.88, meaning fewer homes are going under contract relative to new listings coming to market. For the full year, the ratio stands at 0.74, well below the 25 year average of 0.82. Over the course of 2025, the market added 6,299 more listings than it absorbed through pending contracts. That excess supply is a key reason why price growth remains under pressure.
Months of inventory provides another clear lens into current conditions. Austin ended December with 4.74 months of inventory, up from 3.89 months one year ago. That is a 21.7 percent increase year over year. While this level does not signal an oversupplied market by historical standards, it does firmly place Austin in a more balanced to buyer leaning environment compared to the seller dominated years of 2020 through early 2022.
Focusing specifically on resale inventory, many areas now fall into buyer advantage or buyer control territory. This means homes are taking longer to sell, negotiations are more common, and buyers have more leverage on price and terms. Sellers who understand this reality and price accordingly can still achieve successful outcomes, while those anchored to past peak pricing often struggle.
Sales activity for December came in at 2,207 closed transactions. On a cumulative basis, Austin recorded 30,025 sold properties for the year, which is down 4.4 percent year over year but still 6.8 percent above the long term average. This reinforces a consistent theme throughout 2025. Transaction volume is lower than last year, but not historically weak.
When adjusted for population growth, the picture becomes more nuanced. Cumulative sales per 100,000 residents totaled 1,171, which is down 6.6 percent year over year and more than 21 percent below the long term average. Similarly, sales per 1,000 Realtors came in at 1,626, essentially flat year over year but still well below historical norms. This highlights the competitive environment agents are operating in and the importance of skill, pricing accuracy, and local expertise.
Pricing trends remain one of the most closely watched elements of the Austin housing forecast. The average sold price for December was $581,600. While that represents stability in recent months, it is still down nearly 15 percent from the May 2022 peak of $681,939. The median sold price tells an even clearer story. At $435,000, the median is down 20.91 percent from its peak of $550,000, representing a decline of approximately $115,000.
Importantly, median prices are also running 3.33 percent below where they were 36 months ago, confirming that the market has given back more than just pandemic era excess. This reset has brought pricing closer to levels that align with long term affordability and income growth trends.
From a long range perspective, Austin’s 25 year compound annual appreciation rate sits at 4.838 percent. If the market has indeed found a bottom near the current median price, it would take roughly 63 months, or until early 2031, to return to the prior peak assuming historical growth rates resume. This is a reminder that real estate cycles reward patience and long term planning rather than short term speculation.
Price performance across different segments further illustrates the market’s selective nature. Over the past year, homes in the bottom 25th percentile saw prices decline by just over 4 percent, while homes in the top 25th percentile experienced slight price growth. This bifurcation suggests that well located, higher quality properties continue to hold value better, while more price sensitive segments feel the impact of excess supply more acutely.
Demand relative to supply is also captured by the absorption rate, which currently stands at 19.87 percent compared to a historical average of 31.59 percent. This confirms that inventory is being absorbed at a slower pace, consistent with a buyer leaning market. However, the Market Flow Score of 8.07, which is above the historical average of 6.59, suggests that while volume is lower, the market is functioning efficiently without signs of systemic stress.
For buyers, the Austin housing market offers opportunity. Selection remains elevated, price reductions are common, and negotiation leverage has improved significantly from recent years. For sellers, success depends heavily on realistic pricing, presentation, and understanding local submarket dynamics. Investors should view current conditions as a period of stabilization, with returns driven more by fundamentals than rapid appreciation.
As Austin real estate closes out 2025, the data points to a market that has corrected, recalibrated, and is now moving forward at a healthier, more sustainable pace. The Austin real estate forecast is no longer about extremes, but about balance, discipline, and long term fundamentals shaping the next phase of the cycle.
