Where have all the buyers gone?

Austin’s housing market in 2025, has continued to transition from the breakneck pace of the pandemic years. The metro market is one still defined by excess supply relative to moderated buyer demand. Housing prices have decreased throughout the year, although still remain stable from month to month. When compared to peak prices in 2022, the average sold price is currently down by roughly 12%, while the median sold price shows a 20% drop from its peak in 2022. The pandemic prices were not sustainable long term.

The price declines we are seeing can be attributed in large part to the Activity Index, The index reflects the ratio of pending contracts to all active listings (including pending properties). Or what percentage of active properties are being absorbed by the market. The overall ratio dropped to 19.3 percent from 22.4 percent a year ago, a 13.9 percent decline that places Austin in the contraction zone. The activity index differs by city and zip code, as well as activity among new construction and resale properties. The numbers on these charts clearly show that the "resale" market is suffering at the hands of new construction.

However, pricing activity is not uniform across the metro area. Properties in the bottom quarter of the market are down 2.8 % YOY, while the top quarter of the market has posted gains of 6.5% YOY.  Once again a bifurcated market where more affordable properties see greater price pressure, while upper tier properties still see demand.

Going forward, 2026 could bring us a more stable market. Inventory growth has started to slow, and price drops are smaller than earlier in the year, indicating that sellers have become more attuned to the realities of this market. If mortgage interest rates hold or decrease, and overall economic conditions hold steady, we could see a slow recovery in our local area housing market.