The Austin housing market continues to cool as we move through October, with active listings sitting at 16,395 — up 14.9% compared to this time last year. Inventory has retreated slightly from its summer high of 18,146 but remains elevated, with nearly six out of ten listings (59.4%) now showing at least one price drop. This confirms what many buyers have already sensed: sellers are becoming more flexible, and pricing power has shifted decisively toward buyers.
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Pending contracts are down 6.1% year-over-year, while cumulative new listings remain 3.0% above 2024 levels and 21% higher than the long-term average. The gap between listings and pendings — now totaling over 7,300 homes year-to-date — reflects a market still working through excess supply. The result is an Activity Index of 19.3%, down from 22.7% a year ago, placing most Austin-area ZIP codes in the “softening to contraction” phase of the market cycle.
Housing Prices
Prices have clearly stabilized from their pandemic-era highs but remain well below peak levels. The average sold price in October stands at $601,181, down 11.8% from the May 2022 peak of $681,939. The median sold price is $450,000, marking an 18.2% decline (roughly $100,000) from the same peak. Compared to three years ago, median prices are down 4.3%, underscoring that much of Austin’s appreciation surge from 2021–2022 has now fully unwound.
If the market truly bottomed at this $450,000 median, long-term modeling suggests it would take approximately 53 months — until February 2030 — to return to a $552,000 median, assuming Austin’s 25-year compound appreciation rate of 4.98%. In other words, price recovery will likely be gradual, not rapid.
Price segmentation also reveals a split market: homes in the bottom 25th percentile saw prices fall 2.6% and price per square foot decline 5.7% year-over-year, while the top 25th percentile posted a 5.4% gain in sale prices, suggesting high-end properties continue to draw motivated buyers.
Regional Trends
Austin’s outlying suburbs continue to absorb more inventory than the city core. Submarkets like Liberty Hill (6.17 months), Cedar Creek (7.47 months), and San Marcos (7.27 months) are carrying heavier inventory burdens, while more central areas such as Austin (5.42 months) and Buda (3.85 months) remain closer to balance.
On a year-to-date basis, Austin’s overall months of inventory has increased 24.4%, climbing from 5.07 last October to 5.80 months today. This shift aligns with a 14.2% annual rise in total supply, while demand has slipped modestly.
Cities like Del Valle and Lockhart saw the sharpest year-over-year increases in inventory, with gains above 100%. On the flip side, a few smaller submarkets like Manchaca and Driftwood actually saw declines, suggesting micro-markets remain highly localized and sensitive to both new construction and resale activity levels.
List-to-Sale Price Performance
The monthly new listing-to-pending ratio currently sits at 0.64, well below the long-term average of 0.82. This means for every 100 new listings entering the market, only about 64 are going under contract — a clear sign of oversupply and cooling absorption rates. Year-to-date, Austin has recorded 43,974 new listings but only 36,626 pendings, leaving a cumulative difference of 7,348 homes that have yet to find buyers.
At the same time, the absorption rate — which measures sold homes relative to total active listings — is now just 8.65%, far below the historical average of 31.67%. In practical terms, this indicates the market is operating at roughly one-fourth its normal turnover speed. The Market Flow Score, another efficiency indicator that captures supply-demand velocity, sits at 1.22, compared to a long-term norm of 6.57. This confirms a sluggish, supply-heavy market where homes are lingering and buyers hold negotiating leverage.
Peak Value Trends
While prices have declined from their 2022 peaks, the adjustment has been uneven. Luxury and newer suburban developments are weathering the shift better, often supported by builder incentives and flexible financing options. In contrast, older resale homes — particularly those in less updated condition — are seeing deeper discounts to attract activity.
The spread between new construction and resale performance is notable. The Activity Index for new construction is 26.47%, while resales sit at 16.43%. This gap illustrates that builder-driven inventory is still drawing more immediate buyer attention, largely because of rate buydowns, closing cost credits, and modern finishes. Resale homes, however, remain challenged by competition and appraisal constraints.
Geographically, the “softening” to “contraction” market phases now cover most of the Austin metro. Only a handful of ZIP codes — roughly 7% of the region — remain in equilibrium, while 40% have entered the contraction or freeze stages where absorption has nearly stalled.
Market Outlook
Looking ahead, Austin’s housing market appears to be moving into a late-stage correction characterized by normalization, not crisis. While the current data points to slower turnover and downward pressure on resale pricing, it also suggests that much of the market’s excess has already been absorbed.
Builders have moderated their pace of new starts, and total new listings are growing at just 3% year-over-year — a far slower rate than the 20% surge seen earlier in 2025. That moderation will likely help inventory stabilize as we approach year-end.
Mortgage rates remain the wildcard. Should financing costs ease modestly, the backlog of demand waiting for affordability relief could reignite activity in 2026. But for now, Austin’s housing forecast favors buyers, and sellers will need to continue adjusting pricing and expectations through winter.
