When More Listings Don’t Mean More Buyers: Austin’s Inventory Surge is Reshaping the Market

The July 16, 2025 edition of the Austin Daily Real Estate Briefing reveals a market defined by high inventory, persistent price cuts, and a growing mismatch between seller expectations and buyer urgency. While surface-level statistics might suggest stability—active listings hovering just below all-time highs and sold prices showing resilience in some sectors—the underlying dynamics point to a slower, more cautious environment with softening demand and rising leverage for buyers.

Austin’s active residential listings currently sit at 17,778, a notable but subtle retreat from the recent record of 18,076 set just weeks prior. Although this represents a decrease of 298 listings, it still places Austin firmly in buyer’s market territory, especially when paired with the fact that 58.0% of all active listings have recorded at least one price drop. These figures not only reflect seller fatigue but also a recalibration of pricing strategies across the market, often prompted by rising days on market and underwhelming foot traffic.

The Activity Index—a proprietary measure of showing activity and buyer engagement—has dropped to 19.7%, down from 22.5% in 2024, signaling a 12.6% decline in buyer responsiveness. Simultaneously, Months of Inventory has risen to 6.33, a 17.2% year-over-year increase. This combination of decreased activity and increased inventory is textbook buyer’s market behavior, suggesting that the pace of absorption is slowing even as supply remains elevated.

New listings from January through July have totaled 31,604, up just 0.1% year-over-year but significantly—19.6%—above the 25-year average. This signals that sellers remain active and optimistic, perhaps hoping to capitalize on early summer activity. However, the market is not reciprocating that enthusiasm. Cumulative pending contracts have slipped to 24,590, marking a 12.0% drop year-over-year and sitting 3.9% below the historical average for this time of year. The resulting imbalance—7,014 more new listings than pendings year-to-date—translates to a New Listing to Pending Ratio of 0.67, well below the 25-year average of 0.81. In layman’s terms, inventory is growing faster than demand can keep up.

Sales volume also reflects this drag. The year-to-date number of sold properties has reached 17,883, a 4.8% decline from the same period last year. While this figure still sits 7.6% above the historical average, it’s worth noting that the broader context includes population growth and agent growth—metrics that are not translating into proportional increases in sales. For example, the cumulative sold per 100,000 population is down 7.0% year-over-year and a striking 20.5% below average. Likewise, sold properties per 1,000 Realtors have dropped 0.6% year-over-year and are now 24.4% below average. This drop in productivity points to more competition among agents for fewer buyers and fewer closings.

Price performance tells a nuanced story. The average sold price for July is $600,680, down nearly $81,000 or -11.92% from the May 2022 peak of $681,939. The median sold price currently sits at $450,000, representing a $100,000 or -18.18% drop from its peak. In terms of longer-term pricing benchmarks, median sold prices are now 12.62% lower than they were 36 months ago. These declines, though substantial, have not been uniform across the market. Year-over-year data shows the top 25th percentile of home values has increased by 1.55%, while the bottom 25th percentile has dropped 4.41%, revealing a bifurcated market where higher-end homes are still gaining value as entry-level and mid-market properties soften under affordability pressure.

The long-term price correction analysis adds an important frame to these declines. Using the 25-year compound appreciation rate of 4.981%, a median priced home at $450,000 would need approximately 52 months—or until October 2029—to return to its previous peak of $551,020. This projection underscores the reality that today’s buyers aren’t necessarily “buying at the bottom,” but rather entering a phase of steady, measured recovery.

Geographically, Austin’s inventory increase is widespread but not evenly distributed. From July 2024 to July 2025, markets like Jarrell (+94.8%), Cedar Creek (+142.7%), and Marble Falls (+120.7%) have seen explosive growth in Months of Inventory. Even the city of Austin itself has experienced a 23.2% rise in Months of Inventory, climbing from 5.21 to 6.42. On a year-to-date basis, Austin’s inventory has grown 47.4%. These figures point to a region-wide overhang of listings, many of which may be stale or mispriced.

The Sold-to-Active Ratio currently sits at just 17.85%, well below the historical average of 31.92%. This low ratio confirms what other metrics are signaling: the market is sluggish, favoring buyers who now have more options and more negotiating power. Compounding this is the Market Flow Score (MFS), which has dropped to 5.16 compared to the historical average of 6.61. A lower MFS reflects not only weaker buyer demand but also lengthening timelines for turning listings into transactions.

In conclusion, Austin’s market in mid-July 2025 presents a tale of two truths. For sellers, the data warns of mounting competition and a need for price realism. For buyers, the combination of elevated inventory, high price drop rates, and longer days on market creates an ideal environment to negotiate value—though interest rate sensitivities and economic uncertainties still temper that advantage. From a brokerage perspective, agent messaging should focus on market education, pricing discipline, and clear communication about buyer leverage. This is not a market in free fall, but it is one where strategic preparation is replacing impulsive decision-making.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for July 16, 2025.​