The Austin real estate market continues to reset as 2026 begins, and today’s data paints a clear picture of a market that is no longer overheating but not frozen either. Active residential listings currently sit at 12,480, which is 14.3 percent higher than the same time last year. While this is well below the June 2025 peak of 18,146 listings, the current level still reflects meaningful excess supply relative to demand. More than half of all active listings, specifically 54.7 percent, have already experienced at least one price reduction, reinforcing the reality that sellers are adjusting expectations to meet the market rather than buyers chasing prices higher.
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Inventory composition matters in this cycle. Of the 12,480 active listings, 3,888 are new construction and 8,592 are resale homes. This split continues to place pressure on resale sellers, who are competing not only with other homeowners but also with builders offering incentives, rate buydowns, and pricing flexibility. Compared to 2025, active listings are higher by roughly 1,559 homes, a reminder that supply has rebuilt faster than demand has returned.
New listings activity during 2025 remained historically elevated. Cumulative new listings from January through December totaled 49,912, which is up 5.0 percent year over year and more than 22 percent above the long-term average. This tells us sellers remain motivated to bring homes to market, even as absorption slows. Elevated listing volume without matching demand typically leads to longer days on market and increased pricing pressure, both of which are clearly visible in today’s Austin housing data.
Pending listings highlight the demand side of the equation. Current pending listings stand at 3,030, down 7.7 percent compared to the same period last year. Of those pendings, 1,241 are new construction and 1,789 are resale homes. For the full year, cumulative pending listings reached 43,754, which is slightly down year over year at negative 1.0 percent but still above historical norms. This divergence between strong listing volume and softer pending activity explains why inventory remains elevated despite steady transaction flow.
One of the most telling demand indicators is the Activity Index, which measures the percentage of active listings going under contract. The overall Activity Index is now 19.5 percent, down from 23.1 percent last year, representing a 15.5 percent decline. This shift places the resale market squarely in contraction territory. Resale activity sits at just 17.23 percent, while new construction remains stronger at 24.20 percent. Historically, expansion phases occur above 30 percent, while equilibrium ranges between 25 and 30 percent. Today’s readings show a market that is no longer balanced and is leaning toward buyer control in many segments.
Looking deeper into market phases across resale inventory, a large share of Austin neighborhoods now fall into contraction or crisis categories. Over one third of resale markets are in the 15 to 20 percent danger zone, and nearly a quarter have slipped below 15 percent, signaling buyer hesitation and accelerating price corrections. These conditions align with what buyers and agents are experiencing on the ground: fewer competing offers, more negotiation leverage, and longer decision timelines.
The relationship between new listings and pending sales further confirms this dynamic. The monthly new listing to pending ratio for December finished at 0.93, meaning new listings outpaced newly accepted contracts. For all of 2025, the ratio averaged 0.74, well below the 25-year average of 0.82. Over the full year, there were 6,158 more listings than pendings, a gap that directly feeds higher inventory and continued pricing pressure across the Austin housing market.
Months of inventory provides another clear signal. Overall months of inventory has increased to 4.43 months, up from 3.83 months last year, a 15.8 percent increase. While this level does not yet indicate extreme oversupply, it firmly places the market outside of seller-driven conditions. On the resale side, many cities and zip codes now fall into buyer advantage or buyer control categories, where inventory exceeds 210 days of supply. These conditions historically correlate with slower price growth or outright price declines.
Sales activity remains steady but constrained. December recorded 2,582 closed sales, bringing total 2025 sales to 30,404. While this is 3.2 percent lower than last year, it remains 8.1 percent above the long-term average, showing that transactions continue even in a slower environment. However, when adjusted for population growth, sales per 100,000 residents fell to 1,186, which is more than 20 percent below historical norms. This indicates that housing turnover has not kept pace with population growth, a key structural shift in the Austin real estate market.
Pricing trends continue to reflect the correction phase. The average sold price in December was $573,486, down nearly 16 percent from the May 2022 peak of $681,939. The median sold price declined even more sharply, falling 21.01 percent from its peak to $434,454. Compared to 36 months ago, median prices are down 3.45 percent, underscoring how much of the pandemic-era appreciation has been given back.
Price behavior differs by market segment. Over the past year, homes in the bottom 25th percentile declined 3.55 percent, while the top 25th percentile posted a modest 1.64 percent increase. This divergence suggests that affordability-constrained buyers are exerting downward pressure on entry-level and mid-priced homes, while higher-end segments benefit from more resilient demand and stronger balance sheets.
City-level data reinforces the broader trend. Only six cities posted year-over-year median price increases, while 24 recorded declines. This widespread softness indicates that price adjustments are not isolated but systemic across the Austin metro area.
The absorption rate, calculated as sold listings divided by active listings, currently stands at 23.05 percent, well below the historical average of 31.61 percent. This confirms that inventory is turning over more slowly than normal. Despite this, the Market Flow Score sits at 8.51, above its historical average of 6.59. This suggests that while demand is softer, transactions that do occur are moving through the system with reasonable efficiency, preventing a full market stall.
From a long-term perspective, the Austin housing market still benefits from strong fundamentals. The 25-year compound appreciation rate is approximately 4.643 percent annually. If current prices represent the bottom of the correction, it would take roughly 64 months, or until March 2031, for median prices to return to prior peak levels assuming historical growth rates resume. This projection highlights both the durability of long-term real estate appreciation and the patience required during correction cycles.
For buyers, today’s Austin real estate market offers increased leverage, improved selection, and more room for negotiation than at any point since before 2020. For sellers, success requires realistic pricing, strong presentation, and an understanding that the market no longer rewards overpricing. For investors, disciplined underwriting and long-term horizons remain essential, especially given slower turnover and normalized appreciation expectations.
As Austin moves deeper into 2026, the market continues its transition from correction toward stabilization. Inventory is no longer exploding, but demand has not yet reaccelerated. This balance suggests that the coming months will be defined by selective opportunity rather than broad-based appreciation.
