Active residential listings currently stand at 14,236 homes, up 14.7 percent year over year from December 2024. While this is still below the cycle high of 18,146 reached in late June, the current level represents a structurally elevated inventory environment compared to historical norms. For buyers, sellers, investors, and real estate professionals, this matters because elevated inventory changes how leverage is distributed across the transaction.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for December 12, 2025.
Price behavior confirms this shift. More than 57 percent of all active listings in the Austin area have experienced at least one price reduction. That is not a short term anomaly. It reflects a market where initial pricing expectations remain misaligned with buyer affordability and absorption speed. In strong seller driven cycles, price reductions are rare and isolated. In today’s Austin housing market, price cuts are common and often necessary to achieve movement.
New supply continues to flow into the system. From January through December, cumulative new listings reached 48,868 homes. That figure is up 2.8 percent year over year and sits 20 percent above the long term average. This is a critical data point because elevated listing activity during a slower demand cycle creates persistent inventory pressure. Sellers are still choosing to list, but buyers are being more selective, more patient, and more price sensitive.
Pending listings confirm that demand has not kept pace. Active pending listings sit at 3,686, down 2.2 percent from last year. On a cumulative basis, total pending contracts for the year reached 42,095, down 4.7 percent year over year, even though that figure remains slightly above long term averages. This divergence between supply and demand is the core reason the market remains soft. More homes are coming to market than buyers are willing or able to absorb at current pricing levels.
The Activity Index helps quantify this imbalance. The overall Activity Index declined from 23.3 percent in 2024 to 20.6 percent in 2025, an 11.7 percent deterioration year over year. This metric measures how effectively listings are converting into pending contracts. In simple terms, fewer homes are moving relative to how many are available. New construction activity remains stronger at 27.6 percent, while resale activity lags at 17.28 percent. That gap highlights how builders continue to use incentives, rate buydowns, and pricing flexibility to maintain transaction volume, while resale sellers face greater resistance.
When resale activity is broken down into market phases, the picture becomes even clearer. A large share of resale markets now fall into contraction or danger zones, defined by Activity Index readings between 15 and 20 percent. Many areas have slipped further into crisis or freeze conditions below 15 percent. These are environments where buyer hesitation increases, marketing times extend, and price corrections accelerate rather than stabilize.
The new listing to pending ratio reinforces this theme. The monthly ratio currently stands at 0.67, meaning significantly more listings are being added than contracts are being signed. On a year to date basis, the ratio is 0.73 compared to a 25 year average of 0.82. Historically, when this ratio remains below average for extended periods, inventory continues to build and pricing power shifts away from sellers.
Months of inventory tells the same story. The Austin market now sits at 5.06 months of inventory, up from 4.36 months one year ago. That is a 16.2 percent increase year over year. While this may not sound extreme on the surface, it represents a steady drift away from balanced conditions and toward buyer advantage. On a resale only basis, a growing share of cities and zip codes now fall into buyer advantage or buyer control ranges, defined as more than 210 days of inventory.
Sales volume reflects the strain. December recorded 2,529 closed sales, bringing cumulative sales for the year to 30,263. That total is down 3.6 percent year over year, even though it remains 7.7 percent above long term averages. The reason these two facts can coexist is population growth and elevated listing activity. When sales are measured per capita, the market looks far weaker. Cumulative sold properties per 100,000 residents fell to 1,180, down 5.9 percent year over year and more than 20 percent below historical norms. That means transactions are not keeping up with population growth.
For real estate agents, this pressure is visible in productivity metrics. Sales per 1,000 Realtors stand at 1,640, only slightly higher than last year but still more than 22 percent below historical averages. This confirms what many agents feel anecdotally: competition is intense, deal flow is thinner, and transaction efficiency matters more than ever.
Price trends continue to normalize. The average sold price in December was $605,952, down roughly $76,000 from the May 2022 peak of $681,939. That represents an 11.1 percent decline. Median prices tell an even clearer story. The median sold price currently sits at $450,000, down $100,000 or 18.2 percent from the May 2022 peak of $550,000. Median pricing is often a better reflection of the broader market, and its decline confirms that affordability constraints remain a dominant force.
When prices are compared across segments, the divergence becomes clear. Homes in the bottom 25th percentile saw year over year price declines of 1.41 percent and price per square foot declines of 2.88 percent. Meanwhile, the top 25th percentile experienced slight price stability, with prices up 0.35 percent year over year. This bifurcation suggests that higher end buyers are better insulated, while entry level and mid range buyers remain constrained by rates and income limits.
Absorption metrics reinforce this slowdown. The sold to active ratio, often referred to as the absorption rate, stands at 15.57 percent compared to a historical average of 31.64 percent. This means fewer than one in six active listings is selling within the measurement period. In strong seller markets, that figure typically exceeds 30 percent. Today’s reading signals sluggish turnover and excess supply.
The Market Flow Score provides a consolidated view of these conditions. The current score of 5.50 sits below the historical average of 6.58. Because this metric blends multiple turnover and velocity indicators, its decline confirms that the Austin housing market is operating below normal efficiency. Inventory is moving, but slowly, and primarily through price adjustments rather than demand expansion.
Looking forward, long term appreciation math provides perspective. Austin’s 25 year compound appreciation rate sits near 4.98 percent. Assuming the market has reached a durable bottom at today’s median price of $450,000, it would take approximately 53 months, or until around April 2030, to return to prior peak levels near $551,000 under normal growth conditions. This projection does not assume a boom. It assumes steady, historically typical appreciation following a correction.
For buyers, this environment offers leverage, choice, and time. Negotiation power is no longer theoretical. It is visible in price reductions, concessions, and extended marketing periods. For sellers, realism matters. Homes that are priced correctly and prepared properly can still sell, but those anchored to peak era expectations will struggle. Investors should focus on cash flow discipline and long term horizons rather than short term appreciation. For agents, data literacy, pricing strategy, and expectation management are no longer optional skills. They are the difference between consistent production and frustration.
Austin real estate is not broken. It is recalibrating. This austin market update shows a market working through excesses built during the prior cycle. Understanding where leverage sits today is the key to navigating what comes next in the austin housing forecast and broader austin real estate forecast.
