The Austin real estate market continues to show clear signs of adjustment as we move deeper into January 2026. Active residential listings now sit at 12,732 homes, which is 14.0 percent higher than this time last year. While this is well below the prior inventory peak of 18,146 listings reached in late June 2025, the current level of supply remains elevated compared to historical norms. For buyers, this means more choice and more leverage. For sellers, it reinforces that pricing and preparation matter more now than at any point over the past several years.
Scroll down to view the full Austin Daily Real Estate Briefing PDF for January 12, 2026.
One of the most telling signals in today’s austin housing market is pricing behavior. Over half of all active listings, specifically 53.8 percent, have already experienced at least one price reduction. That is not the sign of a tight or competitive market. It reflects sellers chasing the market lower as demand struggles to keep pace with supply. This trend is widespread across both the City of Austin and surrounding suburbs, indicating that pricing pressure is not isolated to any single area or price range.
When breaking down inventory composition, resale homes continue to dominate the market. Of the 12,732 active listings, 8,788 are resale properties and 3,944 are new construction. New construction inventory remains elevated, but resale supply is where most buyers are focusing, and that segment is experiencing slower absorption. This matters because resale homes typically reflect true market pricing more quickly, while new construction often adjusts through incentives rather than headline price cuts.
Pending listings further confirm the slowdown in buyer activity. Pending contracts total 3,070 homes, down 7.2 percent year over year from 3,308 in January 2025. Fewer homes going under contract despite higher inventory means demand is not keeping up. This imbalance is a central theme in the current austin real estate forecast and is why pricing pressure has remained persistent.
The Activity Index, which measures the percentage of active listings going under contract, has dropped meaningfully. In January 2026, the Activity Index sits at 19.4 percent compared to 22.9 percent last year, a 15.0 percent decline. Resale activity is even weaker, with a resale Activity Index of just 16.96 percent. This places a large portion of the resale market firmly in the contraction and danger zone range, where sales slow, inventory builds, and prices face downward pressure.
Looking at market phase distribution reinforces this point. Nearly half of resale markets fall into the contraction range, with another 37 percent classified in crisis or freeze conditions. These are environments where buyer hesitation increases, days on market stretch out, and sellers must compete aggressively on price and terms. Very few areas are experiencing conditions that resemble balanced or expanding markets.
The relationship between new listings and pending contracts provides additional context. The monthly new listing to pending ratio currently stands at 0.45, far below the long term average of approximately 0.82. This means that for every new listing coming to market, fewer than half are being absorbed by pending sales. On a year to date basis, new listings exceed pending contracts by 530 homes, adding to excess inventory rather than reducing it.
Months of inventory has increased accordingly. The market now sits at 4.53 months of inventory, up 15.6 percent from 3.91 months one year ago. While this is not yet an extreme buyer’s market by historical standards, it is clearly trending in that direction. On a resale only basis, many cities and zip codes have already moved into buyer advantage or buyer control territory, where inventory levels historically correspond with declining prices.
Price trends confirm that the market is still correcting from the 2022 peak. The average sold price in January is $607,859, down from the May 2022 peak of $681,939. That represents a 10.86 percent decline, or roughly $74,000. The median sold price tells an even clearer story. At $450,000, the median is down 18.18 percent, or $100,000, from the May 2022 peak of $550,000. Median prices are particularly important because they reflect the middle of the market and are less influenced by luxury sales.
One of the most sobering long term indicators is the relationship between today’s median price and prior market cycles. Even if the market has reached a bottom at $450,000, historical appreciation rates suggest it would take approximately 50 months to return to prior peak levels, placing a potential recovery into early 2030. This is a critical insight for buyers, sellers, and investors forming a long range austin housing forecast.
Price performance also varies significantly by segment. The bottom 25 percent of the market has seen prices decline 3.08 percent year over year, with price per square foot down nearly 5 percent. Meanwhile, the top 25 percent of the market has seen modest price gains of just over 3 percent, even as price per square foot declined. This split reflects affordability constraints at the lower end and resilience among higher income buyers, though even the upper tier is not immune to pricing pressure.
At the city level, price trends remain broadly negative. Only seven cities are up year over year on median price, while 23 cities are down. This reinforces that the current correction is market wide rather than localized. Investors and agents should take note that appreciation is no longer lifting all boats, and micro market analysis matters more than ever.
Demand metrics continue to lag historical norms. The absorption rate, defined as sold listings divided by active listings, currently sits at 23.42 percent. This is well below the historical average of 31.61 percent and indicates slower market turnover. Lower absorption rates are consistent with longer days on market, increased negotiation, and continued price reductions.
Interestingly, the Market Flow Score stands at 8.55, above its historical average of 6.59. This suggests that while overall demand is weaker, the market is still processing transactions with reasonable efficiency where pricing is aligned with buyer expectations. In other words, well priced homes are still selling, but overpriced homes are not.
For buyers, this austin market update highlights increased leverage, more choices, and improved negotiating power. For sellers, it underscores the importance of realistic pricing and strong presentation from day one. For investors, the data supports patience and disciplined underwriting, as pricing may continue to adjust before stabilizing.
As Austin moves through early 2026, the market remains in transition. Inventory is elevated, demand is softer, and prices are still recalibrating after the rapid appreciation of prior years. Understanding these dynamics is essential for making informed decisions in today’s austin real estate environment.
