The Market Overview
The week began with encouraging participation from agents eager to track the newest metrics driving Austin’s real estate pulse. Despite a limited national data calendar, we have no shortage of meaningful local indicators. This week’s update showed 757 new listings, slightly higher than last year at this time—an increase of just over one percent. While that may seem modest, it reinforces a consistent pattern we’ve observed since midsummer: steady new listing activity paired with weakening buyer follow-through.
Pending contracts this week reached 223, producing a new listing-to-pending ratio of 0.59, which translates to roughly 59 homes going under contract for every 100 that hit the market. That’s below the long-term equilibrium point and a clear signal that the market has moved from a balanced pace to a state of cautious neutrality. The decline in pendings, paired with a rise in total active listings—up 12.3 percent year-over-year—shows that supply continues to outpace demand.
Weekly Data Insights
One of the most striking numbers this week came from pricing behavior. Out of all the listings that experienced price changes, 95 percent were reductions, the highest share since mid-summer. This pattern underscores growing seller motivation and a need to stay competitive in a buyer-driven environment. The median mortgage rate improved slightly to 6.375 percent, which has provided some relief, but not enough to counterbalance buyer hesitation.
Interestingly, back-on-market activity jumped to 188 listings, or about 25 percent of total activity, signaling an uptick in contract terminations. These are not primarily rate-related walkaways—rather, they reflect appraisal shortfalls and the increasingly common scenario where buyers cancel one contract to pursue another home listed at a better price. In short, inventory is not only growing, it’s competing with itself.
The Activity Index and Market Interpretation
As of this week, Austin’s Activity Index has fallen to 19.3 percent, down from the low-20s earlier this quarter, placing the market in contraction territory for resale properties. For context, Team Price defines five distinct market phases based on absorption ratios and months of inventory. Understanding these phases helps clarify where we stand and what comes next.
In an Expansion Phase, ratios above 1.0 or less than 4.9 months of inventory signal strong buyer demand and upward price momentum. Homes sell quickly, sellers hold leverage, and bidding wars often occur in desirable areas. These periods usually follow lower interest rates and strong economic confidence, both of which have been absent in 2025.
The Equilibrium Phase—roughly between 0.80 and 0.99 on the ratio scale or 5 to 5.9 months of inventory—marks balance. Here, buyers and sellers negotiate on equal footing, price growth moderates, and transaction velocity steadies. This is the environment Austin briefly enjoyed during parts of 2023 and early 2024.
We’ve now shifted into the Softening Phase, characterized by ratios between 0.70 and 0.79 and 6 to 6.9 months of inventory. In this stage, inventory begins to accumulate faster than sales, days on market lengthen, and sellers start offering concessions or price reductions to maintain traction.
As ratios fall further, we enter the Contraction or Danger Zone, typically between 0.60 and 0.69 or around 7 months of inventory. At this point, buyer urgency fades, price stability erodes, and sellers must lead the market with aggressive pricing to attract serious interest. October’s data puts us squarely at the upper edge of this zone, with a 0.67 monthly ratio.
Finally, the Crisis or Freeze Phase emerges below a 0.60 ratio or beyond 8 months of inventory. In this environment, buyer activity nearly stalls, inventory surges, and price corrections accelerate. While Austin is not there yet, it is teetering near this boundary—an early warning that if demand continues to lag into the holidays, the city could cross into a full freeze during the first quarter of 2026.
Pricing Power and Buyer-Seller Dynamics
With more than 59 percent of active listings showing a price drop and another 14 percent rise in inventory since last year, buyers hold a clear negotiating advantage. Sellers who continue to price their homes based on early-2022 expectations are watching their listings grow stale. Meanwhile, buyers are gaining confidence, leveraging data, and targeting homes that offer both value and condition. The bright spot: mortgage rates have finally stabilized after months of volatility, providing a window for well-prepared buyers to act decisively before rates or prices shift again.
For agents, this means the role of market educator has never been more important. Sellers must be guided by current absorption and ratio data, not nostalgia. Pricing strategy, staging quality, and timing matter more than ever. Buyers, on the other hand, should understand that while choices are abundant, competition still exists for properties priced correctly in desirable locations.
Regional and Forward-Looking Outlook
The broader six-county Austin region continues to show mixed signals. While total active listings are up more than twelve percent, cumulative pending sales remain roughly four percent lower than last year, reflecting weaker absorption across multiple submarkets. Areas such as 78739 and 78749 still experience sporadic multiple-offer situations, but much of that activity is limited to well-priced listings below $500,000. By contrast, the 78741 and 78660 markets are showing clear signs of fatigue, with longer marketing times and higher cancellation rates.
Looking ahead, we anticipate a gradual seasonal slowdown as the fourth quarter progresses, compounded by typical year-end listing expirations and withdrawals. Historically, November and December often bring improvement in ratios as fewer homes enter the market. Still, unless pending activity rebounds substantially, Austin is likely to close the year in a neutral-to-softening position with a continuing tilt toward buyers.
The Takeaway
The Austin real estate market remains data-dependent and emotionally neutral. Sellers must lead on price and adapt quickly, while buyers should recognize that favorable conditions may not last once rates eventually dip. For agents, this is a market where credibility is earned through clarity. Share the data, explain it in plain language, and help clients make informed moves rather than reactive ones.
