I recently read where Mike Wilson, the chief investment officer at Morgan Stanley, said we’ve been in a “rolling recession” for around three years now.  As Wilson describes it, the economy overall is doing fine, but various sectors and regions have suffered their own micro-busts and their own micro-recoveries.  These rolling shifts explain, for example, why technology is flourishing but housing is flailing. His description aptly describes the queasy feeling I’ve had about the Austin real estate market for the last several years.   

Whether it's a rolling recession or something else, the Austin market isn't what it used to be.  Unfortunately, I don’t think that queasy feeling is going away any time soon, especially for Austin home sellers.  Let’s break it down.

These downward trends make my stomach hurt

When I examine the broader yearly trends using MLS data for single-family homes in the city of Austin (not metro), the numbers are not pretty:

2022:  41.2% of homes on the MLS sold (that’s 1 out of 2 homes)

2023:  27.1% of homes on the MLS sold (that’s 1 out of 4 homes)

2024:  23.5% of homes on the MLS sold (that’s 1 in 4 homes)

2025:  20.0% of homes on the MLS sold year to date (that’s 1 in 5 homes)

2026:  to be determined, but I’m betting it’s going to be 1 in 6 at best depending on tariffs and interest rates

The odds of selling your home have gotten increasingly worse the last several years.  Gone are the days when any time was a good time to sell.  And with tariffs, interest rates, and overall uncertainty, I don’t expect any improvement in 2026.

When assessing the strength of the market we also look at other metrics like days on market, multiple offers, and list to sales price ratios.  Here’s the movement we are seeing for single-family homes in the City of Austin (not metro) as of October 2025:

• Around 10.8% of homes are getting multiple offers (compare this to 2021 when it was about 40%)
• It’s taking around 52 days for homes to go under contract.  
• Sellers are selling for around 6% less than their original list price and around 2% less than their current list price. Sellers should get ready to make some price adjustments, and buyers can be more aggressive with their negotiations.

So what happened to the Austin real estate market? 

If we look back to January 1, 2022, the 30-year fixed mortgage rate was just 3.3%.  At such a low interest rate Austin home buyers continued their Covid-era race to find a home and claw their way to the top of multiple offer battles.  While we questioned whether such a boom was sustainable, sellers continued to cash in.  But as 2022 wore on, interest rates began to climb and buyer activity slowed.  In just four months the interest rate jumped from 3.3% to 6.109%; it was the real estate reckoning we'd been hoping to avoid.   

Austin’s high home prices were no longer offset by low interest rates.  Now buyers faced a high purchase price coupled with a higher interest rate.  As a result, buyer enthusiasm dampened and Austin home sales slowed.  But it wasn’t just home buyers who paused.  Sellers with their own low interest rates were also less motivated to sell; who wants to trade a good deal for a higher priced home with a higher interest rate?  With both buyers and sellers pulling back, the run on the Austin housing market finally came to an end; the market peaked in April 2022, and we haven't seen activity like it since.

With buyers suddenly unable to afford the house they wanted and sellers upset because they could not sell their home for what they could have realized just a couple of months earlier, the number of homes on the market began to pile up.  And the pile up continues today. 

The Austin housing inventory has continued to climb since 2022, while the number of buyers available has remained relatively stable. To put it another way, there are more sellers out there than home buyers these days.  It all boils down to a simple supply and demand equation, and right now our home supply is outpacing buyer demand.

Where does the Austin real estate market go from here? 

I don’t want to be doom and gloom about the market (remember, I only make money to feed my family if people are actually buying and selling homes), but until we see some serious changes I don’t expect to see significant improvement in Austin's housing market.  

While I don’t have a crystal ball, my guess is that interest rates need to be in the 5% range, the government needs to stabilize, people need to feel optimistic about the future, and lingering home inventory will need to clear out which can be a long process. I hope I’m wrong, but the earliest I see this happening is in 2028.

Of course, there is still time left for the market to shift in 2025.  We all know that interest rates can be a powerful motivator, so fingers crossed that our friends at the Fed cut us some slack.  Until then, here’s my advice for you:

  IF YOU ARE THINKING ABOUT SELLING YOUR AUSTIN HOME:     If you have been considering selling your home in the next year, three things are really important right now:  (1) price, (2) condition, and (3) timing.  

1) The good news is that home prices have been on such a slow decline (down 6.8% over the last 12 months) that prices feel relatively stable.  However, if we continue to have a large number of homes for sale, those median prices will start to come down more quickly as pressured sellers cut prices to get their home sold.  

Price is and will always be your number one marketing tool, so get clear about your bottom line, and don't set your initial price too high.  Over-pricing your home is the worst thing you can do in today's market, and no amount of marketing will cure it.  Be prepared to make meaningful price adjustments that will get you in front of a new pool of buyers, and don't wait too long to take our advice on those price adjustments because you may end up chasing the market downward.

2)  Today’s home buyers want nice homes that are move-in ready so be prepared to invest in some updating or price your home as a fixer upper.  Little adjustments that don't cost a lot can make a big impact.  Paint, new light fixtures, and updated faucets are usually going to cost less than your first price reduction.  

3) Also give some serious thought to timing.  Inventory is already high, so we recommend getting ahead of the typical Spring rush when you will have even more competition than you do now. 

There is a path forward, so don’t feel trapped.  You don’t have to figure this out alone – that’s what we’re here to help you with.  Reach out and we can help you develop a plan that will get your home sold. 

  IF YOU ARE THINKING ABOUT BUYING AN AUSTIN HOME:     There are a lot of factors in your favor right now.  You have a wide range of home choices, you don’t have to be in a rush, and most sellers are motivated so don’t be afraid to make offers.  We are also seeing downward movement with interest rates.  Of course, nobody knows how far interest rates will drop, but if they approach five percent, I think we’ll start seeing more activity and some of this excess inventory will get absorbed. 

Also, a large part of Austin's home inventory is being sold privately so you won't find every home on sites like Zillow, Redfin, or Trulia. Make sure your Austin real estate agent is actively searching the off market portals for you.  And if they tell you they’ve looked, ask them to name at least four private portals they are actively checking.  If they can’t do that, find someone else to represent you.

If you aren't quite ready, I suggest planning ahead now so that you can make a move when the right time presents itself.  Start familiarizing yourself with the market, figure out what neighborhoods you like, and get an idea of what you can afford.  We are always happy to help you assess the market and create a buying plan. 

To give you a rough idea of what you should budget, here’s a look at median prices in high demand areas within 30 minutes of downtown Austin:

• Median price for 3-bed homes = $777,000
• Median price for 4-bed homes = $1,475,000
• Median price for 5-bed homes = $2,082,500
• Median price for 6-bed homes = $2,904,767

Also, if you’re in the market for an updated home that has at least three bedrooms and a two car garage under $2M, there are around 130 homes that meet that criteria as of October 6th.  Let me know if you’d like to see that collection of homes. Interestingly, of those 130 homes only 20 of them don’t have resale issues.  You may not care much about resale issues when you're buying a home, but it will definitely matter to you when it comes time to sell.  To help you make a smart buying decision I’m launching a series that helps you assess resale issues before you buy, so follow us on Instagram for those real time updates.

We're rooting for you 

Even when Austin home inventory is high, we know what levers to pull to get your home sold, and we know how to help buyers navigate an abundance of choices. If you'd like someone to guide you through this queasy time in Austin in real estate, I'd be honored to be considered by you or your friends.

October 2025