Market Momentum at a Standstill: Austin’s Real Estate Supply Grows While Buyer Urgency Retreats

The June 17, 2025 Austin Daily Real Estate Briefing reveals a market deep in transition. While supply has expanded to near-record levels, buyer demand continues to lag, suggesting the correction that began in 2022 has not yet run its course. This analysis evaluates how inventory saturation, cooling buyer sentiment, price retracement, and historical absorption benchmarks are reshaping the Austin real estate landscape.

Austin's active residential inventory stands at 17,636—just below the all-time high of 17,750 set one day earlier. This figure is not merely symbolic; it reflects a persistent and widening imbalance between supply and demand. More than half (54.6%) of these listings have undergone price reductions, indicating that sellers are being forced to respond to waning buyer urgency with more competitive pricing. This elevated share of price drops—especially in markets like Lago Vista (65.5%), Liberty Hill (59.7%), and Cedar Park (60.4%)—signals growing distress in many Austin-area submarkets.

While the supply has ballooned, demand has softened. The Activity Index, which measures the percentage of active and pending listings under contract, currently sits at 21.1%, down from 24.7% at the same time last year—a 14.9% drop. This is particularly concerning given that a healthy Activity Index for a balanced market generally falls between 30% and 40%. The Months of Inventory (MOI) metric has climbed to 6.25, up 19.3% year-over-year, firmly placing the region into neutral-to-buyer’s market territory. Several cities are already well past this threshold. Marble Falls now sits at 11 months, while Spicewood, Dale, and Smithville are also at or above double-digit MOI figures. Even core areas like Austin (5.96 MOI), Cedar Park (3.62), and Leander (6.19) are showing significant increases, pointing to broad-based oversupply.

The cumulative count of new listings from January through June 2025 reached 27,566, which is 22.7% above the long-term average. While this would typically be a healthy sign of market activity, it is overshadowed by weaker absorption. Pending listings over the same period have only reached 20,954—down 13.5% from last year. This mismatch creates the largest supply-demand gap since 2004, with 6,612 more new listings than pendings. The year-to-date New Listing to Pending Ratio stands at 0.66, well below the 25-year average of 0.81. For reference, during tight seller markets in the past, this ratio frequently hovered between 1.0 and 1.2.

From a pricing standpoint, the market correction continues. The average sold price in June was $607,367, down roughly $75,000 (-10.9%) from the May 2022 peak of $681,939. More notably, the median sold price is now $465,000, reflecting a 15.45% drop—or $85,000—from the same peak. Based on long-term appreciation rates of 5.118%, it would take approximately 43 months (until December 2028) to return to the May 2022 peak value of $552,186. This timeline reinforces the notion that Austin's market correction is long-term and not simply a seasonal slowdown.

Even as the volume of closed sales shows modest resilience—with 14,855 homes sold so far in 2025, a figure 7.5% above the long-term average—context matters. Compared to the same period in 2024, cumulative sales are down 7.0% year-over-year. Moreover, when viewed per capita, the number of homes sold per 100,000 people is down 9.2%, and the number sold per 1,000 Realtors is at 799—24.7% below the long-term average and the second-lowest in 25 years. This suggests that although transaction volume has improved marginally over the long-term trend, the current market still represents a challenging environment for agents, especially newer entrants.

Price segmentation reveals additional nuance. High-end homes (top 25th percentile) saw a 1.4% annual drop in median price and a 2.2% drop in price per square foot. Meanwhile, the bottom 25th percentile posted steeper declines: -3.0% in price and -4.0% in price per foot. This implies that affordability-driven buyers remain price sensitive and are exerting greater downward pressure at the lower end of the market.

City-level appreciation further reinforces this trend. Of the tracked cities, 18 showed year-over-year declines in median sold price, while only 11 posted gains. The Market Health Index (MHI) currently registers at 20.0%—well below the 30% threshold used to indicate balanced market conditions. Meanwhile, the Inventory Stress Index (ISI) is at 7.0%, favoring buyers and implying that excess supply is creating pricing pressure.

Taken together, the market metrics for June 17, 2025, illustrate an Austin real estate market in a prolonged reset phase. Inventory continues to rise, and despite solid listing activity, the demand side remains subdued. With price cuts widespread, buyer leverage is growing—but many remain hesitant, perhaps anticipating even better deals ahead. If demand fails to rise meaningfully in Q3, further downward pricing pressure is likely.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for June 17, 2025.​