Austin’s real estate market is finally taking a breather, with projections indicating an Austin housing market cooling in 2025—and if you’re thinking about buying or selling, this shift changes everything about your strategy.
After the pandemic-fueled buying frenzy of 2021-2022, we’re now seeing clear signs of a cooling Austin housing market in 2025. Home prices have dipped approximately 2-3% year-over-year, inventory levels have climbed to their most balanced point in years, and buyers finally have some negotiating power again.
Here’s what the latest data tells us: In July 2025, the Austin-Round Rock-San Marcos area posted a median home price of $435,000 (down 3.3% from last year) with 6.1-6.9 months of inventory—a dramatic shift from the seller’s market we’ve known for years. Perhaps most telling, homes are now selling at roughly 93% of their list price, giving buyers real leverage in negotiations.
But there’s another important trend emerging: about 14% of current Austin listings are at risk of selling at a loss, with nearly half of homes purchased after July 2022 in vulnerable positions. This reality is reshaping how both buyers and sellers approach the market.
Let’s dive into what’s driving this Austin housing market cooling trend and, more importantly, how you can use these conditions to your advantage.
The Numbers That Matter Right Now
Before we explore strategies, here are the key metrics every Austin buyer and seller should understand:
- Median Price: $435,000 (down 3.3% year-over-year)
- Closed Sales: 2,492 (down 7.9% year-over-year)
- Months of Inventory: 6.1-6.9 months metro-wide (some areas showing 9-11+ months)
- Close-to-List Price Ratio: Approximately 93%
- Below-List Sales: About 68% of Austin sales closed below asking price
- At-Risk Listings: 14% of current listings may sell at a loss
What this means in plain terms: Buyers now have selection, time to make decisions, and real negotiating power. Sellers can still achieve great outcomes—but only with smart pricing and strategic presentation.
How We Reached This Cooling Point
The Pandemic Boom (2020-2022)
Record-low mortgage rates combined with remote work flexibility created the perfect storm. Austin became a magnet for tech workers and other professionals, leading to bidding wars, waived inspections, and double-digit annual price increases. This surge pulled years of buyer activity forward and established a high baseline for home values.
The Rebalancing Phase (2023-2024)
As interest rates climbed, monthly payments became less affordable, cooling buyer demand. Many potential sellers chose to stay put with their sub-4% mortgage rates rather than trade up to higher rates. Meanwhile, homebuilders continued delivering new inventory, gradually increasing supply.
Today’s Market Reality (2025)
We’ve entered a more balanced market where buyers have meaningful choices and sellers need strategic pricing. The data clearly shows this shift, with inventory levels and negotiation patterns not seen since before the pandemic.
Where the Austin Housing Market Cooling Is Most Pronounced
While market conditions vary by neighborhood, recent data highlights several areas where buyers have particularly strong leverage:
Urban Core Areas:
- 78701 (Downtown Austin): 9-11+ months of inventory, primarily high-rise and condo units
- 78704 (Zilker/Bouldin Creek): Elevated supply levels despite continued desirability
- 78751 (Hyde Park/North Campus): Buyer-friendly conditions for entry-level and investor properties
Suburban Markets:
- Williamson County: 5.5 months of inventory, median $419,995 (down 1.6%)
- Hays County: 5.2 months of inventory, median $365,000 (down 4.6%)
- Bastrop County: 7.5 months of inventory, median $336,749 (down 2.7%)
Important note: “Cooling” doesn’t mean stagnant. Well-priced, move-in-ready homes in desirable locations can still generate multiple offers—they’re just fewer and less frenzied than during the peak years.
Smart Strategies for Austin Home Buyers
1. Target High-Inventory Areas
Focus your search on neighborhoods with 6+ months of inventory. These areas offer more selection, less competition, and sellers who are more open to negotiation. Use this leverage to find the right home at the right price.
2. Negotiate with Confidence
With the average home selling at 93% of list price, you have data to support reasonable offers. Research comparable sales, days on market trends, and any needed repairs to strengthen your negotiating position.
3. Ask for Strategic Concessions
Instead of just focusing on price, consider requesting:
- Rate buydowns or closing cost credits
- Repairs identified during inspection
- Extended contingency periods for due diligence
- Appliance or home warranty packages
4. Time Your Purchase Strategically
Inventory typically builds through late spring and early summer, then thins in fall and winter. Late Q3 to early Q4 can offer the sweet spot of good selection combined with motivated sellers.
5. Prepare for Quick Action
Even in a cooler market, desirable properties move quickly. Have your financing pre-approved, proof of funds ready, and a clean offer structure prepared. This preparation will set you apart from casual browsers.
Winning Strategies for Austin Home Sellers
1. Price Competitively from Day One
Chasing the market down with multiple price reductions costs more than pricing strategically upfront. Today’s buyers have options, and overpriced listings become stale quickly. Use current comparable sales—not last year’s prices—to set your initial asking price.
2. Perfect Your Home’s Presentation
In a market with more choices, condition becomes crucial leverage:
- Complete obvious repairs before listing
- Consider professional staging and fresh paint
- Invest in professional photography and video tours
- Ensure your landscaping makes a strong first impression
3. Offer Payment-Focused Incentives
A rate buydown or closing cost credit often costs you less than a significant price reduction while meaningfully lowering the buyer’s monthly payment—which is usually their primary concern.
4. Monitor Your Local Competition
Track active listings, price adjustments, and absorption rates in your specific area weekly. Market conditions can vary dramatically even within the same ZIP code, so stay informed about your direct competition.
Understanding Loss-Risk Properties
When we mention that 14% of Austin listings are “at risk of selling at a loss,” this means these properties may sell for less than their owners originally paid. This risk is particularly high—nearly 50%—for homes purchased after July 2022 when prices peaked.
For buyers, this can mean finding motivated sellers willing to negotiate on price and terms.
For sellers in this situation, consider modeling both a sale at current market value and a lease-and-hold strategy if rental income could cover your costs while you wait for values to recover.
Neighborhood-Specific Strategies
Downtown & Urban Core (78701, 78704)
Market Reality: 9-11+ months of inventory means substantial buyer leverage
Buyer Strategy: Seek seller-paid buydowns, HOA credits, or furniture/parking concessions
Seller Strategy: Price with current market comps, emphasize value per square foot and turnkey condition
Established Neighborhoods (78751/Hyde Park)
Market Reality: Elevated supply creates room for negotiation on condition and timeline
Buyer Strategy: Be selective about foundation and major system issues; use inspection findings for credits
Seller Strategy: Address potential concerns proactively with pre-listing inspections and repairs
Williamson County Suburbs
Market Reality: 5.5 months of inventory offers more balance than boom-era conditions
Buyer Strategy: Compare new-build incentives versus resale values; negotiate for closing cost credits
Seller Strategy: If competing with new construction, consider rate buydowns or upgrade allowances
Frequently Asked Questions
Is the Austin MSA officially a buyer’s market?
In many segments, yes. With 6-7+ months of supply in numerous areas, conditions favor buyers more than we’ve seen in years. However, exceptional properties in prime locations still move quickly.
Will prices continue falling?
The near-term outlook suggests prices will remain relatively flat to modestly lower in some segments, while tighter supply areas may see slight gains. Your specific neighborhood and price range matter more than citywide trends.
Should I wait for interest rates to drop?
Lower rates could increase both demand and listings. Rather than trying to time the market perfectly, focus on whether the home, payment, and life timing align for your situation. You can always refinance if rates improve.
Your Next Steps
For Buyers:
- Get pre-approved and determine your comfortable monthly payment range
- Research neighborhoods with favorable inventory levels
- Prepare competitive offers that include strategic concessions
- Work with an agent who understands current market dynamics
For Sellers:
- Research current comparable sales in your immediate area
- Complete necessary repairs and enhance your home’s presentation
- Consider payment-focused incentives before reducing price
- Monitor your competition and adjust strategy based on market feedback
The Bottom Line
This Austin housing market cooling in 2025 creates opportunities for both buyers and sellers—but success requires adapting your strategy to current conditions.
Buyers have the selection, time, and negotiating power that’s been absent for years. Focus on total monthly costs, not just sticker prices, and use market data to support your offers.
Sellers can still achieve excellent results through precision pricing, outstanding presentation, and smart incentives. Remember, if you’re buying another home in the same market, favorable conditions benefit both sides of your transaction.
Whether you’re targeting a downtown condo, a charming central Austin home, or a suburban new build, success in today’s market comes down to strategy and execution. The data shows clear opportunities—now it’s time to act on them.
Buying or Selling in Austin in 2025?
At Eleven Oaks Realty, we bring over 65 years of combined experience navigating all types of real estate markets. Let us help you evaluate your real estate plan and craft a strategy tailored to your unique situation and goals. Check out our Austin Home Buyers page and Austin Home Sellers page to learn more about our team and how we work. Then, contact us for a no-obligation consultation—call or text us at (512) 827-8323, or email us at info@11OaksRealty.com. We’re here to guide you every step of the way!
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