Austin Real Estate Market: May 19, 2025 Monday Touch Point
Inventory Sets Another Record as Buyer Absorption Weakens
The Austin housing market continues its decisive shift toward oversupply, with active listings climbing to a new record of 17,077—surpassing the previous high of 16,946 just days earlier. This 20.9% year-over-year increase reflects consistent new listing activity across the six-county area, totaling 3,693 new listings so far in May alone. Meanwhile, pending contracts have declined to 4,968, down 2.4% from this time last year. As a result, the New Listing to Pending Ratio opened Monday at 0.44 and is projected to close the week between 0.50 and 0.59, signaling a substantial increase in inventory and clear demand-side weakness.
Buyer Engagement and Activity Index Fall Further
The Activity Index, which measures buyer engagement by comparing pending listings to total inventory, fell to 22.5%, down from 26.5% one year ago—a 15% annual decline. The resale market is underperforming significantly, with a resale Activity Index of only 18.6%, compared to 33.1% for new construction. Builders are offering rate buydowns, closing cost incentives, and other concessions that are drawing buyers away from resale inventory. This divergence is widening as affordability and negotiation flexibility favor builder-backed listings.
Months of Inventory Climbs—Buyer's Market Approaches
Months of Inventory (MOI) has now reached 6.10, up from 4.95 a year ago and up nearly 10% month-over-month. While 7.0 months is typically considered the entry point for a full buyer’s market, Austin is moving steadily toward that threshold. Nine of the top 30 tracked cities—including Spicewood, Lago Vista, Dale, and Marble Falls—are already in buyer market conditions with MOI exceeding 11.0. Only seven cities remain in a seller’s market, while 14 are classified as neutral.
Price Reductions Hit 95% of Market Movement
Among price-adjusted listings, 95% of all price movements this week were reductions, tying the second-highest rate on record and matching the same week in 2024. So far in May, 32% of all active listings have seen a price drop, and this is expected to rise to 54% by month’s end—on par with last May. The number of listings with price increases was just 129, the lowest figure since Christmas week. A total of 505 properties have returned to market this month, and 1,347 listings have been withdrawn, signaling growing seller frustration.
Home Prices Hold—for Now—but Reversal Expected
As of May 19, the average sold price for the six-county area is $609,854, up 2.7% year-over-year and 3.9% month-over-month. The median sold price is $466,175, up 2.5% year-over-year and 4.2% month-over-month. However, top-tier market weakness is accelerating. The top 25th percentile is now down 2.3% in price and 2.9% in price per square foot from the same time last year. The bottom 25th percentile is down 3.5% in price and 2.5% in price per square foot. These trends indicate a reversal is likely before the end of May, as the high-end market, which had been propping up average prices, is now weakening.
Pending vs. Sold Pricing Reveals Hidden Weakness
Across the six-county area, pending homes are priced 4.8% below recent sold comparables. In 17 of the 30 cities tracked and in 56% of ZIP codes, pending prices are lagging sold prices, forecasting near-term price compression. In Downtown Austin’s 78701 ZIP code, pending price per square foot is down 13.6% compared to recent sales. Other weakening ZIPs include 78722 (down 9.8%) and 78753 (down 20.3%), while 78725 remains the strongest with just 2.56 months of inventory and a 12.8% increase in price per foot under contract.
Market Velocity Slows; Closings Expected to Decline
Austin is projected to close just under 3,000 sales in May, down 7.3% year-over-year from May 2024. Cumulative closings for January through May are forecasted to total 13,129, an 8.7% drop from the same period last year. Adjusted for population, this is an 18.6% decline from the historical average. With fewer homes going under contract and more listings returning to market, velocity is slowing and per-agent production is expected to fall again this year.
Austin Market FAQ – May 19, 2025
Q1: How should buyers approach the current market environment?
Buyers now have more leverage than at any point in the past three years. With inventory at record levels, nearly half of all listings experiencing price reductions, and builder incentives aggressively lowering entry costs, buyers can be selective. However, the market is hyper-local—some ZIP codes like 78725 remain competitive, while others like 78701 or 78753 show deep price compression. Buyers should work with data-driven agents who can interpret neighborhood-specific trends and guide them toward negotiable opportunities with strong long-term value.
Q2: Should sellers still list their home in this market?
Yes, but only with a strategic approach. Sellers must recognize that overpricing is more damaging now than ever. In a market where 95% of pricing movements are reductions, homes that start too high can languish for weeks. Sellers should price ahead of the market, highlight move-in readiness or unique features, and consider concessions where needed. In certain ZIP codes, demand still exists—but only for well-prepared, competitively priced listings. Motivated sellers in higher tiers may also take advantage of market softness to “trade up” at a discount.
Q3: How can agents use this data in listing or buyer presentations?
Agents should integrate this week’s updated Activity Index, Months of Inventory, and New Listing to Pending Ratio into all client communications. Tools like the daily 36-page briefing and ZIP code-specific reports from Team Price offer digestible and accurate insight. In listing presentations, show historical price trends, highlight competition within the price band, and use local absorption data to guide pricing. For buyers, use pending vs. sold pricing analysis to identify leverage points. Educating clients with real-time data builds trust and drives better outcomes.
Q4: Are prices really going up, or is it a statistical illusion?
On paper, yes—median and average prices are slightly up year-over-year. But that’s driven by selective closings in the upper price tiers. When we isolate trends by percentile, both the top 25% and bottom 25% of the market are down year-over-year. More importantly, pending prices are consistently below sold prices, meaning future closings will reflect that softness. Agents and clients should not rely on headline price averages alone; instead, they should watch pending contract trends and price per foot shifts.
Q5: What are the most important trends to monitor over the next month?
Watch for continued movement in the New Listing to Pending Ratio—if it remains at or below 0.50, inventory will continue to climb. Monitor whether Months of Inventory crosses 7.0, which would mark a full shift into buyer market conditions. Track builder activity, as continued incentives may draw even more demand away from resale. Finally, pay attention to pending-to-sold price deltas. If these continue to widen, a broader price correction will likely unfold by summer.
