The Austin housing market opens December with a cautious tone, where supply continues to outpace demand and buyers retain meaningful leverage despite pockets of stabilization.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for Monday December 01 2025.
Today’s data reflects a market still working through the final stages of correction. Active residential listings sit at 14,790, which is 15.5% higher than this time last year and still well below the June peak of 18,146. With 57.3% of all active listings having taken at least one price reduction, sellers are increasingly responding to market pressure. Pending listings are nearly unchanged year over year at 3,812, illustrating that absorption has not kept pace with rising supply. For anyone tracking the austin real estate forecast or looking ahead to next quarter’s austin housing forecast, this widening supply-demand gap explains why pricing remains under sustained pressure.
The Activity Index presents a clear picture of continued deceleration. At 20.5 percent compared to 22.9 percent last year, market engagement has fallen more than 10 percent. New construction remains better represented at 26.52 percent, while resale sits at just 17.82 percent. On the phase breakdown chart, 57 percent of tracked resale markets fall into the 15 to 20 percent range categorized as contraction or danger zone. Another 30 percent sit below 15 percent, in freeze conditions where buyer hesitation intensifies and downward pricing momentum accelerates. Only 3 percent of cities and 15 percent of zip codes register equilibrium level activity. That context supports a forward view of continued price normalization through 2026 in most submarkets.
The monthly New Listing to Pending Ratio stands at 0.85. While this is a seasonal improvement from some earlier months, it is still beneath the long term average of 0.81 and well under the five year pre-pandemic metric closer to 1.00. When reviewed on a year to date basis, the ratio falls to 0.73. Historically, the 25 year average sits at 0.82. Year to date cumulative new listings exceed pending contracts by 6,953 units. That disparity flows directly into the growing inventory structure and shortens the timeline for the market to move toward a full buyer control phase if seasonality does not accelerate demand.
Months of Inventory has climbed to 5.29 compared to 4.53 at this point in 2024. That 16.7 percent year over year increase places the Austin region solidly above the typical equilibrium range. In resale only metrics, only 7 percent of cities are in seller acceleration territory, and 23 percent hold a limited seller edge. The neutral zone captures 20 percent, while 23 percent fall into buyer advantage and 27 percent show buyer control, with more than 270 days of supply projected. Inventory pressure is most acute in outlying markets, where conditions have shifted more dramatically. Austin itself holds a 19.3 percent year over year increase in supply, and when viewed year to date, it is still more than 11 percent higher. Submarkets that saw the steepest acceleration during the pandemic now show prolonged absorption timelines, with some rural zip codes exceeding 18 to 28 months of projected inventory.
Price data aligns with the structural implications. The average sold price in November closed at 573,924 dollars, which follows a gradual downshift from the May 2022 peak of 681,939 dollars. That represents a 15.84 percent decline. Median pricing mirrors a deeper adjustment. At 430,000 dollars today versus 550,000 dollars at the peak, the market has adjusted by 21.82 percent. When compared to the same market position 36 months earlier, the median is down 6.52 percent. This indicates that the current pricing is aligned with a correction sequence rather than transactional volatility. Median values today reinforce that the adjustment cycle began in late 2022 and has been lengthening under the weight of supply imbalances. Assuming the current median is the technical bottom and applying a 4.79 percent annual appreciation trend line, it would take 67 months for the market to recover back to peak levels, projecting equilibrium around May 2031. For planning purposes, that reinforces the importance of conservative pricing strategies for sellers and calculated hold projections for investors.
Sales activity also trails demand indicators. Total properties sold this month measured 1,821. Year to date cumulative closed units total 27,533, down 4.5 percent from last year and 21.5 percent below the long term per capita average. When measured against the realtor population, volume aligns nearly flat year over year but remains 24 percent below long term density. The absorption rate, a direct measure of demand relative to inventory, is currently 14.23 percent. Historically, this figure averages 31.63 percent. At today’s level, less than one in seven active listings are converting each month. From an austin market update standpoint, this continued weakness confirms why pricing adjustments are still needed in the majority of listings.
Market Flow Score, the composite efficiency measure of all transactional elements, comes in at 4.62 on a 10 point scale. The long term average is 6.58. This gap reinforces the message that Austin remains in a slow moving, supply weighted correction cycle. While builders are achieving higher relative absorption because of incentives and mortgage rate buydowns, the resale sector is working within the confines of constrained buyer urgency and increased selection pressure. Opportunities remain for buyers willing to move decisively, and the data supports increased negotiation leverage.
Compared to December 2024, conditions are materially softer. Inventory is up. Activity is lower. The ratio of new listings to demand is wider. Compared to historical averages, the market is undershooting expected turnover efficiency. However, when compared to the peak supply periods earlier in 2025, the market has now pulled back from extreme levels. Active listings are 3,356 below the June peak, and pending activity has stabilized. The New Listing to Pending Ratio is improving on a monthly basis, albeit modestly. The seasonal trend into December may allow for lighter negative pressure, but there are no indicators of recovery conditions yet. For forward looking austin real estate forecast analysis, the expectation is continued normalization into the first half of 2026, with any recovery contingent on job market strength and mortgage rate direction.
For buyers, today’s numbers present a strategic environment with room for negotiation. With 57.3 percent of listings showing price adjustments and absorption still depressed, qualified buyers have leverage and time to vet options. For sellers, overpricing continues to extend days on market and increase the likelihood of reductions. Pricing correctly based on current market comparables, rather than trailing peak values, remains the key to maintaining momentum. Investors evaluating portfolio additions should focus on inventory pressure at the zip code level, paying specific attention to demand velocity indicators and builder competition when evaluating long term rent positioning.
Within the broader austin housing context, the market continues to rebalance after a period of accelerated growth. Correction phases are most intense in the upper price tiers and peripheral markets, while top quartile price segments are showing a slight year over year increase of 3.82 percent. The bottom quartile remains down 0.39 percent. That divergence suggests the market is bifurcating, with move up buyers and cash driven transactions maintaining some stability while entry level buyers face affordability constraints and rate sensitivity. This trend aligns with economic positioning and supports continued segmentation in 2026.
Despite the headwinds, stability factors are beginning to build. Pending volumes have stopped contracting. Active listings are not breaking new highs. The ratio of new listings to pending is tracking more favorably this month. While the market is not yet signaling a reversal, it is establishing a base. Until absorption improves, however, the correction narrative remains dominant.
From a strategy standpoint, December requires disciplined expectation setting for sellers and targeted opportunity positioning for buyers. Agents should focus on communicating the importance of pricing accuracy and negotiation strategy. Investors should model returns using stabilized rent assumptions and conservative exit timelines. Forecasters should expect inventory to rise again in spring, and monitor the New Listing to Pending Ratio as the leading indicator for market direction.
