Austin Real Estate Market Update

Austin Real Estate Market Update – February 05, 2026

Active residential listings across the Austin area currently stand at 12,805, which is 11.4 percent higher than this time last year. While inventory has pulled back significantly from the June 2025 peak of 18,146 listings, the decline is not being driven by stronger demand. Instead, it reflects a sharp slowdown in new listings coming to market. Over half of all active listings, 50.1 percent, have already experienced at least one price reduction, which signals that sellers are still struggling to align expectations with current buyer behavior. Of today’s inventory, 4,019 homes are new construction and 8,786 are resale properties, reinforcing that resale sellers remain the most exposed to pricing pressure.

Scroll down to view the full Austin Daily Real Estate Briefing PDF for February 05, 2026.

New listing activity continues to be one of the weakest parts of this austin real estate cycle. From January through early February, cumulative new listings totaled just 4,111 homes. That figure is down 47.4 percent year over year and sits 32 percent below the long term average. This is not a seasonal anomaly. It reflects seller hesitation driven by falling prices, higher interest rates, and uncertainty about where values ultimately stabilize. Fewer sellers are willing to list unless they absolutely have to, which is artificially constraining inventory growth even as demand remains muted.

Pending listings tell a similar story. Current pending listings total 3,640, only 0.7 percent higher than last year. When viewed cumulatively from January through February, pending contracts are down 49.2 percent year over year and are running 43.6 percent below historical norms. This gap between listings and contracts continues to widen. Year to date, there are 765 more new listings than pending contracts, and the annual new listing to pending ratio sits at 0.69 compared to a 25 year average of 0.82. In plain terms, homes are being added to inventory faster than buyers are absorbing them.

The Activity Index reinforces this imbalance. Today’s overall Activity Index is 22.1 percent, down from 23.9 percent last year. New construction continues to outperform resale with an Activity Index of 26.3 percent, while resale activity lags at just 20.07 percent. Most resale markets across the region now fall into the softening or contraction phases. In these phases, inventory builds faster than demand, time on market increases, and price cuts become the primary lever to generate interest. A meaningful portion of zip codes are now flirting with the lowest demand category, where buyer hesitation accelerates price corrections.

Months of inventory further confirms the buyer advantage forming in the market. Austin’s months of inventory currently measures 4.55 months, up 13.6 percent from last year. While this number is still below extreme buyer market conditions, it has shifted decisively out of seller territory. On a resale only basis, one third of markets now sit in the buyer control category, defined by more than 270 days of inventory. These areas tend to experience the fastest price adjustments and the longest marketing times.

Sales volume remains subdued but has shown slight stabilization. A total of 1,715 homes sold in February, bringing cumulative sales from January through February to 3,324. That figure is down 14.2 percent year over year, yet it is marginally above the long term average by 0.4 percent. While this may appear encouraging on the surface, per capita metrics paint a less optimistic picture. Sales per 100,000 residents are down 16 percent year over year and remain nearly 30 percent below average. Sales per 1,000 Realtors are down 25 percent compared to historical norms, highlighting the intense competition among agents in a slower market.

Prices continue to adjust lower, particularly in the middle and lower tiers of the market. The average sold price in February came in at $519,883, down nearly 24 percent from the May 2022 peak of $681,939. The median sold price tells an even clearer story. At $405,318, the median price is now 26.3 percent below its May 2022 high of $550,000, representing a loss of roughly $145,000 in purchasing power for the typical home. When compared to prices from 36 months ago, today’s median price is still down nearly 7 percent, underscoring how far the market has retraced.

Not all segments are moving equally. Over the past year, homes in the bottom 25th percentile by price declined by just over 5 percent, while the top 25th percentile posted modest gains of roughly 1 to 1.5 percent. This divergence reflects a market where higher end buyers remain selective but financially capable, while entry and mid level buyers are more sensitive to interest rates and affordability constraints. City level data reinforces this trend, with only 6 cities posting year over year median price gains while 23 cities remain down.

From a valuation standpoint, the Home Value Index shows that 80 percent of cities across the Austin area remain overvalued relative to long term fundamentals. Only one city is currently classified as undervalued. This suggests that price correction risk has not been fully eliminated, especially if demand does not rebound meaningfully in the spring selling season.

Market efficiency metrics remain historically weak. The absorption rate, which measures the percentage of active listings that sell, sits at 14.58 percent compared to a long term average of 31.54 percent. This indicates that inventory is turning over at less than half its normal pace. The Market Flow Score, which combines multiple turnover metrics into a single index, stands at 2.99 versus a historical average of 6.58. In practical terms, the market is moving slowly, capital is tied up longer, and both buyers and sellers are proceeding cautiously.

Looking ahead, long term price recovery will require patience. Using Austin’s 25 year compound appreciation rate of 4.364 percent, and assuming the market has already reached its cyclical low, it would take approximately 88 months for the median price to return to prior peak levels. That places a full recovery around May 2033. This projection reinforces that short term price rebounds are unlikely without a meaningful shift in affordability, interest rates, or employment growth.

For buyers, today’s austin housing market offers leverage, selection, and negotiating power not seen since before the pandemic boom. For sellers, success now depends on realistic pricing, strong presentation, and an understanding that yesterday’s pricing benchmarks no longer apply. Investors and agents alike should view this period as a transition phase rather than a quick turnaround. The data shows a market that is stabilizing structurally, but still working through excess supply and recalibrating values.

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FAQ Section

Is the Austin housing market still declining in 2026?

The data shows that the Austin housing market is no longer deteriorating at the same pace as in prior years, but it has not yet returned to growth. Prices remain well below their 2022 peaks, and demand indicators such as the Activity Index and absorption rate are still weak. Inventory levels and price reduction rates suggest ongoing pressure, particularly in resale homes. This points to a stabilization phase rather than a recovery.

Is Austin a buyer’s market right now?

Yes, current conditions favor buyers across much of the Austin area. Months of inventory has climbed to 4.55, over half of listings have reduced price, and absorption remains far below historical norms. Buyers have more leverage, more choices, and greater negotiating power than they have had in several years. This is one of the most buyer friendly environments since before the pandemic boom.

Why are so many homes cutting prices in Austin?

Price cuts are largely driven by weak demand relative to supply. While new listings are down sharply, pending sales are even weaker, creating a backlog of inventory. Sellers who price based on past market highs are forced to reduce prices to attract attention. High interest rates and affordability constraints are amplifying this dynamic.

Will Austin home prices recover soon?

Based on long term appreciation trends, a full return to peak prices is likely years away rather than months. Even assuming a normal 4.364 percent annual appreciation rate, it would take until roughly 2033 for median prices to regain prior highs. Short term price bumps may occur, but the data does not support a rapid rebound. Recovery will depend on sustained demand growth and improved affordability.

What does this mean for Austin real estate investors?

Investors should approach the Austin market with a long term mindset. Slower absorption, lower prices, and higher inventory can create opportunities, but short term appreciation should not be the primary expectation. Cash flow, conservative assumptions, and patience are essential in the current cycle. This phase favors disciplined investors over speculative strategies.

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.