Austin Real Estate Market Update

Austin Real Estate Market Update – January 09, 2026

As of Friday, January 09, 2026, active residential listings across the Austin area sit at 12,707 homes. That is a 14.8 percent increase compared to the same time last year, when inventory was closer to 11,070. While this is well below the prior inventory peak of 18,146 listings reached in June of 2025, it still represents a meaningful amount of supply entering a market where buyer activity has softened. More than half of all active listings, specifically 54.3 percent, have already experienced at least one price reduction, which tells us that many sellers are adjusting expectations to meet current demand rather than leading the market higher.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for January 09, 2026.

This growing inventory is not evenly distributed. Of the 12,707 active listings, 3,977 are new construction homes and 8,730 are resale properties. New construction continues to play a major role in overall supply, but the pressure is increasingly visible in the resale segment, where buyers have more options and more leverage than they did during the peak years of 2020 through 2022. For sellers, this means pricing accuracy and condition matter more than ever. For buyers, it means patience is often rewarded.

Pending listings provide one of the clearest signals of market momentum, and that signal weakened further this January. There are currently 2,994 homes under contract, down 9.5 percent year over year from 3,309 at the same time in 2025. Of those pending listings, 1,237 are new construction homes and 1,757 are resale properties. The decline in pending sales tells us that while inventory has risen, buyer follow through has slowed. This imbalance between supply and demand is one of the defining features of the current Austin housing market update.

The Activity Index confirms this trend. The overall Activity Index dropped from 23.0 percent last year to 19.1 percent today, a 17.1 percent decline. New construction is performing better with an Activity Index of 23.72 percent, while resale homes are lagging at 16.75 percent. When resale activity falls below 20 percent, the market enters what is classified as a contraction phase, where listings linger longer, price reductions become more common, and sellers lose negotiating leverage. According to the resale market phase breakdown, a large portion of the market is now firmly in contraction or even approaching freeze conditions, which historically align with price corrections and slower transaction volume.

Another way to understand this slowdown is through the New Listing to Pending Ratio. The monthly ratio currently sits at 0.40, which is dramatically lower than the 25 year average of 0.82. On a year to date basis, there are 456 more new listings than pending sales. This gap highlights a market where new supply is arriving faster than buyers are committing. In strong seller markets, this ratio typically moves closer to or above 1.0. At 0.40, today’s Austin housing forecast reflects a supply heavy environment where absorption is slow and competition favors buyers.

Months of Inventory adds another layer to this picture. Inventory increased from 3.87 months last year to 4.51 months today, a 16.3 percent rise year over year. While this is not yet an extreme level by historical standards, the direction matters. Rising months of inventory signal weakening demand relative to supply. When looking at resale only data, many areas are already pushing into buyer advantage or buyer control zones, where homes take longer to sell and sellers must compete more aggressively on price and terms.

Despite these challenges, total closed sales remain relatively stable. There were 1,873 homes sold, only slightly lower year over year. However, when adjusted for population growth, sales per 100,000 residents dropped to 70, which is 12.4 percent below the long term average. This tells us that while transactions are still happening, they are not keeping pace with population growth, reinforcing the idea that demand is subdued. Sales per 1,000 Realtors rose 10 percent year over year to 111, but still sit 5.3 percent below average, indicating increased competition among agents for fewer deals.

Pricing trends further support the narrative of a market in reset. The average sold price in January stands at $578,385, down from the May 2022 peak of $681,939. That represents a 15.19 percent decline, or roughly $104,000. The median sold price tells a similar story, falling from $550,000 at the peak to $449,500 today, a drop of 18.27 percent, or about $101,000. Median prices are particularly important because they better reflect the experience of typical buyers and sellers. The fact that median prices have fallen more than averages suggests softness in the middle of the market, not just at the high end.

When comparing today’s median price to where the market stood 36 months ago, prices are essentially flat, sitting just 0.10 percent lower. This means Austin home values have given back most of the excess gains from the rapid appreciation cycle and are now closer to long term trend lines. Over the past 25 years, Austin real estate has appreciated at an annual compound rate of 4.78 percent. If the market has reached a bottom around the current $449,500 median price, it would take approximately 53 months, or until May of 2030, to return to the prior peak near $550,000 using that historical growth rate. This projection reinforces the idea that the path forward is likely slower and more gradual than the rapid rebound many experienced after past downturns.

Price performance also varies significantly by segment. Homes in the bottom 25th percentile saw prices decline 4.55 percent year over year, while the top 25th percentile actually experienced a modest 1.93 percent increase in price, even as price per square foot declined. This divergence shows that higher end homes are holding value better, often due to stronger buyer equity positions and less sensitivity to mortgage rates, while entry and mid range homes face greater pressure.

Demand relative to supply is clearly weaker when looking at absorption. The Sold to Active ratio currently sits at 23.45 percent, well below the historical average of 31.61 percent. Lower absorption rates mean listings are turning over more slowly, which aligns with the elevated share of homes requiring price reductions. At the same time, the Market Flow Score stands at 8.55, above its historical average of 6.59. This indicates that while the market is slower, it is still functioning efficiently, with inventory continuing to move, albeit at a more measured pace.

For buyers, this Austin real estate market update signals opportunity. Increased inventory, widespread price reductions, and softer demand create room for negotiation and careful selection. For sellers, the message is clear. Pricing must reflect current conditions, not past peaks, and preparation matters more than ever. For investors, the market offers clarity. Cash flow, long term appreciation, and realistic exit timelines should drive decisions, not short term price rebounds. For agents, success in this environment depends on data fluency, honest pricing conversations, and guiding clients with clear expectations.

The Austin housing forecast for early 2026 is not one of collapse, but it is also not one of rapid appreciation. It is a market normalizing after an extraordinary cycle, moving toward balance through time, price adjustments, and selective demand. Understanding that context is essential for anyone participating in Austin real estate today.

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FAQ SECTION

Is the Austin housing market slowing down in 2026?

Yes, the Austin housing market is showing clear signs of slowing as we begin 2026. Active listings are up 14.8 percent year over year, while pending sales are down 9.5 percent. The Activity Index has fallen to 19.1 percent, placing much of the resale market in contraction territory. These indicators suggest demand is weaker relative to supply, creating more leverage for buyers.

Are home prices in Austin still declining?

Home prices in Austin remain below their 2022 peaks, with the median sold price down 18.27 percent from the high. While prices are no longer falling rapidly month to month, they are stabilizing near long term trend levels rather than rebounding sharply. Entry and mid priced homes continue to face the most pressure, while higher priced homes are holding value better. This pattern is typical during market normalization phases.

Is now a good time to buy a home in Austin?

For buyers with stable finances and a long term outlook, current conditions are favorable. Inventory is elevated, more than half of listings have reduced prices, and competition has eased. Buyers have more time to evaluate options and negotiate terms. However, purchases should be made with realistic expectations about appreciation timelines rather than short term gains.

What does the Activity Index mean for sellers?

The Activity Index measures how quickly listings are turning into pending sales. At 19.1 percent overall and 16.75 percent for resale homes, the market favors buyers. Sellers need to price accurately, prepare homes well, and expect longer marketing times. Overpricing often leads to price reductions and extended days on market.

What is the Austin real estate forecast for the next few years?

Based on historical appreciation rates of 4.78 percent, returning to prior peak prices could take several years. If the market has reached a bottom near today’s median price, it may take until around 2030 to fully recover to peak levels. The forecast points toward steady, gradual growth rather than rapid appreciation. Investors and homeowners should plan accordingly.

Have a Question or Want to Dive Deeper?

If you’d like a custom breakdown of the data, want help interpreting today’s market trends, or just have a question about buying or selling in Austin, let us know. Fill out the form below and a member of our team will get back to you promptly.