Austin Real Estate Market: May 12, 2025 Monday Touch Point
As of May 12, 2025, the Austin housing market continues to undergo a significant rebalancing. This week’s Monday Touch Point dives deep into leading indicators, inventory levels, pricing dynamics, and strategic advice for buyers and sellers navigating a transitioning market.
Inventory Hits Record Highs
Inventory continues to rise sharply, reaching a record 16,616 active listings, surpassing the previous high just days earlier. This ongoing surge reflects a consistent trend we've seen since early spring. The New Listing to Pending Ratio stands at a remarkably low 0.44, meaning for every two properties entering the market, less than one is going under contract. This is the lowest May reading since 2010, and a clear signal of growing market imbalance.
Buyer Demand vs. New Supply
Pending transactions are down 2,000 units year-to-date compared to 2024, while new listings are up nearly 1,900 units, resulting in growing pressure on pricing and inventory buildup. The Activity Index is at 23.1%, down from 26.7% a year ago, reinforcing the cooler buyer sentiment. Despite the headwinds, certain areas—like Cedar Park, Round Rock, Buda, and Kyle—continue to show relative strength, driven largely by new construction incentives. However, even in these "recession-proof" pockets, inventory is rising fast, which may cool those pockets over the summer.
Price Drops Accelerating
Price reductions are widespread: 49.5% of active listings have experienced a price drop. Cities like Manchaca (73.7%), Liberty Hill (58.1%), and Lago Vista (56.6%) lead the price correction wave. The number of price increases, by contrast, remains minimal. Year-over-year, months of inventory has surged to 6.1 months, up from 5.3 months in May 2024, signaling a shift into a buyer's market for many zip codes.
Why Are Sellers Still Listing?
Sellers fall into a few categories: Hyperlocal Advantage: Some zip codes and subdivisions still attract multiple offers. Forced Movers: Job relocations and financial constraints leave sellers no choice. Agent Knowledge Gaps: Some listings are managed by agents unfamiliar with current trends. Strategic Upgraders: Sellers may take a loss on their current home to buy into a down-priced higher-tier property.
What About Prices?
The median sold price for May is currently $485,000, up $30,000 year-over-year (a 6.6% increase), but this number is skewed by strong sales in the luxury market. The bottom 25th percentile price fell 3.8% YoY, while the upper 25th percentile rose 2%. Expect May’s numbers to settle lower by month-end.
Development and the Broader Economy
Major multi-use developments in areas like Cedar Park, Pflugerville, and Round Rock continue to evolve, but at a slower pace as developers await tenant commitments. This caution is tied to rising capital costs and economic uncertainty. CPI, PPI, and Fed rate decisions this week will likely shape short-term mortgage rate movement and buyer confidence. We’re likely to see continued inventory build-up through summer. Agents and buyers need to watch ZIP-level trends closely. For sellers, now is the time to act strategically. For buyers, the coming months may present excellent opportunities—particularly if mortgage rates ease.
FAQs
Q1: What is the New Listing to Pending Ratio and why does it matter?
It measures buyer demand versus new supply. A low ratio signals growing inventory and cooling market conditions.
Q2: Is now a good time to buy in Austin?
Yes, in certain submarkets. With nearly half of listings experiencing price drops, buyers have negotiating power—especially in overbuilt areas.
Q3: Why are prices still rising if demand is down?
Luxury sales are skewing the average. Median and lower-tier prices are softening, and this trend is expected to continue.
Q4: What’s driving sellers to list right now?
Job relocation, agent misguidance, strategic upgrading, and high confidence in certain zip codes are key drivers.
Q5: How should agents use this data with clients?
Educate clients on hyperlocal conditions, price strategically, and monitor real-time updates using Team Price reports.
