Austin Real Estate Market Analysis – June 25, 2025

"Record Inventory, Declining Prices, and Subdued Demand Signal a Market Deep in Correction"

The Austin real estate market continues to exhibit clear, data-supported signs of a prolonged correction, with virtually every key metric pointing to a landscape that favors buyers and underscores ongoing price retraction. The latest data for June 25, 2025, further solidifies this narrative, offering critical insights for buyers, sellers, investors, and real estate professionals seeking to navigate these conditions with clarity.

Active residential listings sit at 17,785, slightly below the all-time high of 17,937 reached just two days ago on June 23. This figure represents an extraordinary 17.1% year-over-year increase in available inventory for the City of Austin alone and a staggering 34.3% increase when looking at year-to-date growth since January. Such elevated listing volumes underscore not only a saturated market but also sustained listing activity, with cumulative new listings from January to June totaling 28,793, a 27.9% increase above the long-term average and a 4.4% increase year-over-year.

Despite the flood of inventory, buyer activity remains tepid at best. The current Activity Index—a measure of pending sales relative to total market activity—has slipped to 20.5%, down sharply from 24.6% at this time last year. This 16.4% decline in the Activity Index reflects a significant contraction in buyer demand, a trend further emphasized by the New Listing to Pending Ratio. This monthly metric now stands at just 0.61, and the year-to-date cumulative figure is 0.66, well below the 25-year historical average of 0.81. Simply put, for every 100 new listings entering the market, fewer than 66 are going under contract, leaving the market in a consistent state of oversupply.

Months of Inventory, another key leading indicator of market health, has climbed to 6.29, marking an 18.6% year-over-year increase from June 2024. The City of Austin, in particular, now holds 5.85 months of inventory, squarely placing the market in neutral territory, with some surrounding cities tipping fully into buyer's market conditions. Markets such as Marble Falls, Hutto, and Liberty Hill have seen Months of Inventory surge over 80% year-to-date, reflecting intense supply pressures that continue to outpace buyer demand.

Price trends offer further confirmation of this market trajectory. The average sold price now stands at $604,854, down $77,000 or 11.3% from the May 2022 peak. The median sold price has fallen even more sharply, currently at $460,000—a $90,000 decline from the peak, equating to a 16.36% price reduction. This places median pricing approximately 14.02% below levels from exactly 36 months ago, highlighting the depth of the correction and erasing nearly three years' worth of market gains.

From a historical perspective, the Austin market has experienced a 25-year compound annual appreciation rate of 5.073%. If today's median price of $460,000 represents the true bottom of this correction cycle, projections suggest it would take approximately 46 months—until March 2029—for prices to regain their previous peak of $552,113, assuming average appreciation resumes uninterrupted. This outlook highlights the likelihood of a protracted recovery period, not a short-term rebound.

The distribution of price activity across the market provides additional nuance. Lower-priced properties, representing the bottom 25th percentile, have experienced a year-over-year price decline of 3.8% and a 4.9% decline in price per square foot. Higher-priced properties, in the top 25th percentile, have fared marginally better, with only a 0.5% price decline and a 1.2% drop in price per foot. However, even the upper tiers are not immune to market-wide price contraction, reflecting broad-based correction across all price points.

At the city level, appreciation data presents a mixed but generally negative picture. Of the tracked cities, only 13 have seen year-over-year increases in median sold price, while 17 have recorded declines. This uneven performance underscores localized market variability but confirms that price pressure remains widespread across the Austin area.

The Market Health Index (MHI), a composite measure of supply-demand balance, currently registers at 20.2%. Historically, an MHI below 30% indicates a buyer's market, signaling that conditions continue to favor buyers. Compounding this, the Inventory Stress Index (ISI)—which assesses supply strain based on inventory velocity—sits at 7.2%, a notably low figure. ISI levels below 10% favor buyers, further reinforcing that the current market landscape is one of ample inventory, price reductions, and suppressed buyer urgency.

Sales volume data rounds out the market assessment. While cumulative sold properties from January to June total 14,977, representing 8.3% above the historical average, year-over-year sales are down 6.2%, reflecting weaker transaction volume despite higher inventory levels. Sales per capita and sales per agent figures are also notably below long-term averages, painting a clear picture of soft market activity that has yet to stabilize.

In summary, the Austin housing market remains in the grips of a deep and protracted correction cycle. Inventory has reached near-record highs, price reductions are prevalent across all market segments, buyer activity remains muted, and key indicators such as the Activity Index, Months of Inventory, and New Listing to Pending Ratios confirm sustained buyer leverage. Market participants should anticipate continued price softness, extended days on market, and a slow, multi-year recovery period—particularly if historical appreciation trends hold. For buyers, this environment offers opportunities for negotiation and increased selection. For sellers, strategic pricing and realistic expectations are critical to avoid prolonged market exposure.

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