Inventory Expansion and Market Rebalancing

Inventory continues to expand across the Austin housing market as supply grows faster than buyers can absorb it. Active listings in the Austin-Area MLS increased from 12,432 last year to 14,248 today, a 14.6% rise. Months of Inventory increased from 4.23 to 4.90, a 16% jump that reflects a 1.2× expansion in available supply. This shift is meaningful because it tells us the market is not just experiencing seasonal fluctuation—it is absorbing a structural reset where higher inventory levels are becoming the norm. As supply continues to outpace demand, homes remain on the market longer, and buyers gain more leverage in negotiations.

Inside the City of Austin, inventory growth is even stronger. Active listings rose from 3,197 to 3,768, a 17.9% increase year over year. Months of Inventory moved from 3.80 to 4.45, rising 17%, matching the market-wide pattern almost exactly at a 1.2× expansion. Even week over week, the upward pressure in supply remains steady, reinforcing the long-term trend rather than showing any signs of easing. Both the city and the surrounding suburbs are clearly moving together: more listings, slower turnover, and a market that is transitioning out of its correction phase into a more balanced environment.

Nothing about this shift appears temporary. Expanded inventory is now a defining feature of the market, not a short-term surge. Buyers benefit from more choices, more negotiation room, and less urgency. Sellers must adjust by pricing with precision and preparing homes thoughtfully. Strategies that relied on momentum or rapid absorption no longer fit today’s conditions, and the market increasingly rewards accuracy over optimism.

Pricing Trends and Market Direction
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Prices across the Austin-Area MLS remain stable but flat. The average active list price increased slightly from $572,189 to $580,271, up 1.4% year over year. The median active list price fell from $440,000 to $430,000, a -2.3% change, showing the market is leaning toward mid-priced inventory and not being supported by a surge of high-end listings. That gap between the average and median is important. It signals a pricing environment that is steady overall but still recalibrating underneath the surface.

Sales prices tell a similar story. The average sold price moved from $551,125 to $557,373, up 1.1% year over year. The median sold price declined from $429,000 to $421,500, down -1.7%. Week over week, pricing has held steady, which reinforces the idea that values are not in a freefall but have shifted into a phase of slower, controlled movement. Buyers remain more price sensitive than in prior years, and properly priced homes are still selling on schedule.

Inside the City of Austin, price adjustments are more noticeable. The average active list price declined from $805,350 to $776,235, down -3.6%. The median active list price declined from $599,000 to $582,450, a -2.8% shift. Sales pricing mirrors this. The average sold price moved from $772,408 to $742,391, down -3.9% year over year. The median sold price decreased from $580,000 to $570,000, a -1.7% decline.

Directionally, none of this points toward appreciation. Instead, it shows a market that has corrected, stabilized, and is now adjusting in small, predictable movements. Buyers are value-focused, and sellers who price at market—rather than ahead of it—see the cleanest results. This environment rewards discipline, not speed.

Negotiation Environment and Buyer Leverage
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Negotiation patterns continue to favor buyers across the Austin-Area MLS. So far this month, 71.74% of all sold properties have closed below list price, up from 69.03% last month. Another 17.36% sold at asking price, compared with 19.21% last month. Properties that sold above the list price accounted for 10.91% of closings, slightly lower than last month’s 11.76% but higher than the 10.24% posted in December 2024. Even with small weekly fluctuations, the broader trend shows that buyers still control the negotiation environment.

The average sold-to-list price ratio stands at 96.69%, meaning sellers are conceding roughly 3% on average. This ratio has held stable for several weeks, suggesting the market has found its footing. Sellers who enter the market with accurate pricing can still secure clean offers without heavy concessions. Those who overshoot the market typically face longer days on market and end up needing price reductions to re-engage buyers.

In this phase of the market, precision is the competitive advantage. Buyers benefit from expanded selection and reduced urgency, while sellers win when their pricing is realistic and aligned with comparable sales, not aspirational benchmarks from earlier cycles.

Regional & ZIP Code Performance
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Market performance across Central Texas is balanced but slightly leaning toward softening. Month over month, 11 of 30 tracked cities (37%) posted price increases, while 16 cities (53%) saw declines. Year over year, 12 cities (40%) are up, and 18 (60%) are down. These ratios confirm a market that is not moving in a single direction but is instead adjusting based on hyperlocal factors such as affordability, school districts, product type, and neighborhood maturity.

Relative to each city’s 12-month peak, the trend is even clearer: zero cities remain above their recent peak, and 29 have declined from peak values. That reinforces the narrative that the correction phase is complete, and markets have settled into a post-peak stability.

Across 75 ZIP codes, 34 (45%) posted month-over-month increases and 38 (51%) saw declines. Year over year, 38 ZIP codes (51%) show price gains and 37 (49%) show declines. Only four ZIP codes remain above their 12-month peak, while 71 are below, mirroring the same stabilization pattern observed at the city level. The regional story is no longer decline. It is equilibrium. Prices are holding within predictable ranges, and the volatility of the correction period has eased.

Prices Relative to Peak Levels
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Relative to peak performance, the Austin housing market has fully corrected and is operating within a stable range. In the Austin-Area MLS, the median sold price remains 16.7% below the May 2022 peak, and the average sold price is 9.2% below its peak. Price per square foot shows deeper change, with the average down 18.2% and the median down 22.5%. These numbers reinforce the long-term trend: pricing has reset to sustainable levels and is no longer in a declining pattern.

Inside the City of Austin, the pullback follows the same logic. The median sold price is 9.6% below its May 2022 peak, while the average sold price sits 3.6% below peak. Price per square foot ranges between 18% and 20% below the high-water mark depending on the measure used. These declines are not signs of instability—they are signs that the correction is behind us.

Market Outlook
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As we move through 2025, the Austin housing market is entering a predictable and steady phase after several years of correction and adjustment. Inventory continues to expand at double-digit rates, yet pricing remains stable and well-supported at current levels. Over-ask activity remains limited, and the buyers who win homes today are doing so through strong alignment rather than aggressive bidding.

The outlook is consistent and clear. Buyers retain leverage through increased choice and reduced urgency. Sellers succeed when they offer accurate pricing, strong presentation, and realistic expectations. The market is no longer driven by momentum; it is driven by value. Austin has transitioned from volatility into balance, setting the stage for a steadier 2026 where both buyers and sellers can plan with confidence.​

Austin Housing Market Questions

1. Why is inventory rising so quickly in the Austin housing market?

Inventory is rising because new listings are entering the market at a faster pace than buyers are purchasing them. The Austin-Area MLS is up 14.6% year over year, and the City of Austin is up 17.9%, which is a significant expansion in available supply. At the same time, Months of Inventory has increased 16% across the region and 17% inside the city. This tells us buyer demand has not disappeared, but it is not strong enough to offset the steady flow of new listings. Higher interest rates, affordability challenges, and more cautious buyer behavior all contribute to slower absorption. As a result, inventory builds week over week, and the market shifts from a seller-driven environment into a stable, buyer-advantaged market where negotiation power tilts toward the consumer.

2. Are home prices in Austin going up or down right now?
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Home prices are holding steady, but they are not appreciating in any meaningful way. The Austin-Area MLS shows a 1.1% increase in average sold price year over year, but the median sold price is down -1.7%. Inside the City of Austin, the average sold price is down -3.9% and the median is down -1.7%. These mixed results reflect a market that has already completed its major correction and is now operating in a narrow and predictable range. Prices are no longer falling sharply, but they are not climbing either. Instead, the market is stabilizing, which is exactly what we’d expect after a multi-year correction where affordability, supply, and buyer behavior shifted dramatically. For buyers, this means value matters more than speed. For sellers, accurate pricing is the key to attracting offers.

3. What does the current sold-to-list price ratio tell us about negotiation power?
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The current sold-to-list price ratio is 96.69%, which means homes are selling for about 3% below their asking price on average. That’s a meaningful indicator of negotiation dynamics. Historically, when buyers compete aggressively, that ratio moves closer to 100% or higher. Today, 71.74% of all sold properties are closing below list price, while only 10.91% are selling above list. This pattern shows that buyers control timing and leverage. They have more options, more time to evaluate homes, and less pressure to bid aggressively. Sellers who price properly see clean offers without major concessions, but sellers who overprice often end up reducing their listing to re-engage buyer interest. The market rewards precision, not aspirational pricing.

4. How do Austin’s current prices compare to the peak of the market?
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Prices remain well below peak levels but are stable and no longer declining. In the Austin-Area MLS, the average sold price is 9.2% below the May 2022 peak, and the median sold price is 16.7% below peak. Price per square foot shows even deeper adjustments, down 18–22% depending on the metric. Inside the City of Austin, declines follow the same pattern—average sold price is down 3.6% from peak, and median sold price is down 9.6%. These drops reflect the full market correction already behind us. The important point is that prices aren’t continuing to fall. They’ve reached a stable floor, supported by demand at the right price points. For buyers, this means you’re no longer walking into a declining market. For sellers, it means competing on value is the path to a successful sale.

5. What should buyers and sellers expect as we move further into 2025?
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As 2025 progresses, the Austin housing market is expected to stay steady, predictable, and inventory-rich. Supply is growing faster than demand, yet pricing remains stable—an unusual combination that signals a balanced market rather than a declining one. Buyers should expect more options, longer days on market, and continued negotiation leverage. Sellers can still achieve strong results if they enter the market with clean presentation, accurate pricing, and realistic expectations. This is no longer a momentum-driven environment where listings sell quickly regardless of price. It is a strategy-first market, where value alignment determines results. Looking ahead to 2026, this stable foundation creates a predictable environment for both planning and long-term decision-making.​