Austin Real Estate Market Update

Austin Real Estate Market Update – February 25, 2026

Austin real estate is navigating a slower, supply heavy phase, with inventory rising and price pressure still present across much of the market.

Today is Wednesday, February 25, 2026, and the Austin housing market continues to show clear signs of imbalance between supply and demand. According to the latest Austin Daily Real Estate Briefing, active residential listings are currently at 13,408, which is up 12.2 percent compared to this time last year when inventory stood at 11,949. While this is still well below the previous high of 18,146 reached in June 2025, the year over year increase confirms that supply remains elevated relative to demand.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for Wednesday, February 25, 2026.

Of the 13,408 active listings, 48.6 percent have had at least one price drop. That means nearly half of all sellers have adjusted their expectations. This is a critical metric in any Austin market update because price reductions signal negotiation leverage shifting toward buyers. When price drops approach or exceed 50 percent of the market, it tells us that initial pricing strategies are not aligning with current absorption rates.

Breaking down the inventory further, 3,989 of the active listings are new construction and 9,419 are resale homes. Builders are still a significant portion of the supply pipeline, and their Activity Index is stronger than resale at 29.20 percent compared to 21.27 percent for resale. That puts new construction near balanced conditions while resale sits in the softening phase.

Cumulative new listings from January through February total 6,986. That figure is down 10.7 percent year over year, yet still 13.5 percent above the long term average. In other words, while fewer homes are coming to market compared to last year, listing activity remains historically elevated. On the demand side, cumulative pending listings stand at 5,930, down 10.0 percent year over year and 1.6 percent below average.

This gap between new listings and pending activity matters. Year to date, there are 1,056 more new listings than pendings. The new listing to pending ratio for the year is 0.73, compared to a 25 year average of 0.82. When this ratio falls below historical norms, it suggests that inventory is building faster than it is being absorbed. That dynamic supports a more cautious Austin real estate forecast in the near term.

The overall Activity Index is 23.8 percent, down from 25.6 percent one year ago. That is a 7 percent decline year over year. Historically, an Activity Index between 20 and 25 percent signals softening conditions. Sales are occurring, but not fast enough to keep inventory tight. This aligns with what we see in months of inventory.

Months of Inventory is currently 4.75, up from 4.17 last year, a 13.9 percent increase. In simple terms, at the current pace of sales, it would take nearly five months to sell through existing supply. For resale only, much of the market sits in the neutral to buyer advantage categories. Markets above 210 days of supply are classified as buyer advantage, and above 270 days fall into buyer control. Several submarkets are approaching or exceeding those levels.

From a pricing standpoint, the numbers are clear. The average sold price in February is $551,262. That is down 19.16 percent from the May 2022 peak of $681,939, a decline of approximately $131,000. The median sold price is $425,000, down 22.73 percent from the May 2022 peak of $550,000, representing a $125,000 drop. These are not minor adjustments. They reflect a full market correction from the pandemic era highs.

Tracking median sold prices versus 36 months prior shows a decline of 2.30 percent. That indicates that appreciation has flattened over a three year window. The long term 25 year compound appreciation rate for the Austin market is 4.554 percent annually. If the current median of $425,000 represents a bottom, and appreciation returns to that historical rate, it would take approximately 71 months to return to the prior peak value of roughly $550,631. That projects a return to peak around December 2031. This type of projection is central to any serious Austin housing forecast discussion.

Sales volume also reinforces the slower environment. There were 1,901 homes sold in February. Cumulative sold properties from January through February total 3,586, down 7.5 percent year over year, though still 8 percent above the long term average. However, when adjusted for population, cumulative sold per 100,000 residents is 134, which is 22.9 percent below average. That tells us that relative to the size of the metro, transaction velocity is muted.

The absorption rate, defined as sold divided by active listings, is 11.97 percent. The historical average is 31.47 percent. An absorption rate below 10 percent signals a sluggish market. We are hovering just above that threshold. The Market Flow Score is 1.77 on a scale of 0 to 10, compared to a historical average of 6.56. This confirms a supply heavy environment with slower turnover.

Price trends by segment are also diverging. The bottom 25th percentile saw price declines of 3.13 percent year over year and a 5.74 percent drop in price per square foot. The top 25th percentile saw a 4.94 percent price increase, though price per square foot declined slightly by 0.51 percent. This suggests that higher end homes are holding value better in nominal terms, while entry level segments are experiencing more price sensitivity.

Across cities, only 6 are up year over year in median price while 24 are down. The Home Value Index shows that 21 cities, or 70 percent, are considered overvalued, 8 are fairly valued, and 2 are undervalued. That distribution supports the idea that the correction is not fully complete in many areas.

For buyers, this is a market with leverage. Nearly half of all active listings have reduced price. Months of inventory is elevated, and absorption is well below historical norms. Buyers who are patient, data driven, and disciplined on valuation have opportunity.

For sellers, pricing strategy is critical. The Austin housing market is no longer forgiving to aspirational pricing. Homes that align with current comparables and adjust quickly to feedback are the ones moving.

For investors, this environment requires underwriting based on conservative rent growth and realistic appreciation assumptions. The Austin real estate forecast over the next several years will depend heavily on supply stabilization and population driven demand returning to stronger absorption levels.

This Austin market update reflects a transition phase. The market is no longer overheating, but it has not yet reentered strong equilibrium. Inventory is elevated, demand is present but selective, and pricing continues to adjust toward long term affordability metrics.

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FAQ Section

Is the Austin housing market still declining in 2026?

The Austin housing market has corrected significantly from its May 2022 peak, with the median sold price down 22.73 percent and the average price down 19.16 percent. However, current year over year changes are more moderate, and the median compared to 36 months prior is down only 2.30 percent. This suggests the steepest part of the correction may be behind us, but pricing pressure remains in many submarkets. The Austin real estate forecast depends on whether inventory stabilizes and demand improves relative to supply.

Is it a buyer’s or seller’s market in Austin right now?

With 4.75 months of inventory and an absorption rate of 11.97 percent, the market leans toward buyers in many areas. Nearly 48.6 percent of active listings have had price drops, which indicates negotiation leverage. The Activity Index at 23.8 percent places the resale market in the softening category. This means buyers generally have more options and time compared to the seller acceleration environment seen in 2021.

Will Austin home prices return to their 2022 peak?

Using the long term compound appreciation rate of 4.554 percent annually, and assuming the current median of $425,000 represents a bottom, it would take about 71 months to reach the prior peak around $550,631. That projects a return to peak values around late 2031. This is not a guarantee but a mathematical projection based on historical appreciation trends. The Austin housing forecast over that period will depend on job growth, migration, and inventory discipline.

How does current inventory compare to last year?

Active listings are up 12.2 percent year over year, rising from 11,949 to 13,408. Months of inventory has increased 13.9 percent from 4.17 to 4.75. At the same time, cumulative pending listings are down 10 percent year over year. This imbalance between rising supply and softer demand is a key factor shaping the current Austin market update.

Are higher end homes performing better than entry level homes?

Yes, recent data shows divergence between segments. The bottom 25th percentile experienced price declines of 3.13 percent year over year and larger declines in price per square foot. Meanwhile, the top 25th percentile saw a 4.94 percent increase in nominal price, although price per square foot dipped slightly. This suggests that higher income buyers remain active, while affordability constraints are more pronounced in lower price tiers.

Have a Question or Want to Dive Deeper?

If you’d like a custom breakdown of the data, want help interpreting today’s market trends, or just have a question about buying or selling in Austin, let us know. Fill out the form below and a member of our team will get back to you promptly.