Austin real estate market news

austin housing market

2025

Market Overview

The median home value in the Austin-Round Rock area stands at $450,000, reflecting a slight increase from previous months. The market is trending towards a more balanced state, with 5.0 months of inventory, providing opportunities for both buyers and sellers.

Sales Activity

The Austin-Round Rock metropolitan area recorded 2,732 closed sales, representing a 13.4% decrease compared to the previous year. Despite this decline, pending sales showed a smaller drop of 2.4%, suggesting potential market stabilization.

Pricing Trends

The median sales price experienced a 6.3% year-over-year decrease, settling at $450,000. However, homes are still selling close to their list price, with an average close-to-list price ratio of 96.4%.

Market Dynamics

Homes in Austin spent an average of 59 days on the market, an increase of 26.2% compared to the previous year. This extended time on market indicates a shift towards a more balanced market environment.

Housing Supply

The Austin housing market has seen significant changes in supply:

  • Active listings increased by 25.9% year-over-year to 13,227

  • New listings decreased by 3.9% to 4,364

  • Months of inventory rose to 5.0, up 1.3 months from the previous year

These figures suggest improved options for buyers and potentially more negotiating power in transactions.

Future Outlook

Looking ahead, the market is expected to continue its transition towards more balanced conditions. Zillow's Home Value Index predicts a further 2.6% decline in home values over the next year. This trend may improve affordability for potential buyers while requiring sellers to adjust their expectations.

Austin commercial

real estate

Office Market

The Austin office market continues to face challenges. The overall vacancy rate has risen to 19%, up from 16.5% a year ago.This increase is primarily due to new construction deliveries outpacing net absorption. Key points include:

  • Class A properties are outperforming Class B, with 150,144 sq. ft. of positive net absorption for Class A versus negative 111,183 sq. ft. for Class B in Q1 2024.

  • The average full-service rent stands at $39.74 per sq. ft., down 2.7% year-over-year.

  • CBD (Central Business District) commands the highest asking rents at $54.69 per sq. ft.

Industrial Market

The industrial sector in Austin is experiencing rapid growth:

  • 13 million sq. ft. of industrial space has been added annually for the past three years.

  • This growth is driven by major players like Tesla and Samsung, along with their suppliers.

  • An oversupply has led to a 1.6% drop in rental rates, expected to continue until mid-2025.

Retail Market

Austin's retail market remains strong:

  • Vacancy rates are low at 4%.

  • Rents are climbing at 4.4%, outpacing the national average of 2.4%.

  • Nearly 3 million sq. ft. of retail space has been added, yet demand remains high.

Market Outlook

  • The migration of businesses and workers to Austin continues to drive market dynamics.

  • Office, industrial, and retail sectors are showing signs of stabilization.

  • Experts advise that despite challenges, Austin's market remains resilient and dynamic.

Economic Factors

  • Austin's unemployment rate is 3.5%, below state and national averages.

  • Employment growth is strong, particularly in professional and business services, government, and leisure and hospitality sectors.