Austin, Texas Area Will Remain a ‘Soft’ Buyer’s Market in 2025

In the Austin, Texas metro area, the local housing scene shifted from being a strong seller’s market during the pandemic years, to a buyer’s market during 2023 and 2024.

Now, many home buyers who are planning to make a purchase in 2025 want to know which way the market leans and who it favors.

The Austin-Round Rock metro area is currently more of a buyer’s market, partly due to inventory gains that occurred over the past two years. We expect these conditions to persist into 2025.

Austin, Texas a Buyer’s Market Heading Into 2025

At the start of 2025, the Central Texas real estate market leans toward buyers rather than sellers. Homes are staying on the market longer than the national average, and price reductions are common.

Here are some related assessments offered at the end of 2024:

• From Rocket Homes: “Austin is a Buyers Housing Market, which means prices tend to be lower and homes stay on the market longer.”
• From Realtor.com: “Austin, TX is a buyer’s market in November 2024, which means that the supply of homes is greater than the demand for homes.”

But this is not a new development. The Austin area began to shift away from being a seller’s market in late 2022, and by early 2023 it had begun to favor buyers for a change.

During the summer of 2024, for example, Zillow ranked Austin as one of the “strongest buyers markets in the country,” along with New Orleans, Miami, Memphis and Jacksonville.

We believe this market dynamic will extend into 2025, though we could see a shift toward more neutral territory during the second half of the year.

This trend is not unique to Austin. Many cities across the U.S. have experienced a similar pendulum swing over the past two years.

The Evidence Supporting This Trend

A buyer’s market occurs when the supply of homes for sale in a particular area exceeds the demand from buyers. Under these conditions, house hunters tend to have more negotiating leverage over the sale price and other terms.

This definition mirrors what we’ve seen in the Austin-Round Rock metro area over the past two years. And it could continue for a while longer.

Here’s a summary of those buyer-friendly conditions:

1. The number of real estate listings has increased.

According to Multiple Listing Service (MLS) data and other sources, the Austin-Round Rock-Georgetown metro area had a 5-month supply of homes for sale at the end of 2024.

That was well above the national average of 3 months’ supply, and also higher than most other metros across Texas. This means that the Austin area has a fairly high amount of inventory available for home buyers.

Inventory levels have increased over the past couple of years, brought on by a cooling real estate market and weakening demand. This trend has gradually pushed Austin from being a seller’s to a buyer’s market, heading into 2025.

2. Homes are taking longer to sell these days.

According to December 2024 data from Realtor.com, Austin-area real estate listings spent a median of 81 days on the market before going under contract.

That was significantly higher than the national median “days on market,” and also higher than other Texas metros. The bottom line here is that, on average, it takes a long time to sell a home in the Austin area at the start of 2025.

This sluggish sales pace benefits home buyers by making sellers more willing to negotiate. It also reduces stress for buyers and gives them more time for inspections and due diligence.

3. Price reductions have become more common.

During the last two months of 2024, about 40% of homes sold in the Austin area had at least one price reduction. Such reductions occur when a homeowner lists their property at one price, only to lower it due to a lack of offers or other factors.

Conversely, only a low percentage (9%) of homes sold for more than the list price during that same timeframe. These trends indicate buyer’s-market conditions in the Austin metro.

4. Home prices have declined.

Home prices in Central Texas are currently falling due to the above-mentioned price reductions from sellers and other factors.

At the end of 2024, a Zillow housing market report stated: “The average Austin-Round Rock home value is $444,248, down 3.6% over the past year…”

Depreciation has been going on since the summer of 2022. You can see this in the graph below, which also shows the sharp rise in prices that preceded and caused the current downturn.

At the start of 2025, house values in many U.S. metros were either flat or rising. But in the Austin-Round Rock area, prices were still in decline.

5 Mistakes to Avoid in a Buyer’s Market

You might think that home buyers can get everything they want during a buyer’s market, or that sellers have zero negotiating leverage.

Neither of those things are true.

While current real estate market conditions in Austin, Texas favor buyers, they still have to tread carefully when making an offer and negotiating with sellers.

With that in mind, here are five mistakes to avoid when buying a home in a buyer’s market:

1. Thinking it’s going to last for a long time. 

Real estate markets constantly evolve, and due to a wide range of factors. Mortgage rates, home prices, population patterns, and construction trends can turn a buyer’s market into a seller’s market over time—or vice versa.

We could see buyer’s market conditions in Austin for at least the first quarter of 2025, and maybe until mid-year. But the pendulum will eventually swing the other way.

2. Overestimating your negotiating leverage.

Even when supply and demand conditions favor buyers, sellers still have some leverage. After all, they’re the one holding the asset. As any seasoned real estate agent will tell you, buyers who overestimate their own negotiating leverage often have homes slip through their fingers.

3. Trying to time the perfect “bottom” of the market.

Some buyers try to pinpoint the absolute lowest price point of a particular real estate cycle. This is what housing analysts refer to as the “bottom” of the market. But you might miss out on a great house at a good price while waiting for additional price drops that never materialize.

This is especially relevant in a desirable area like Austin, Texas, which is likely to see renewed demand in the near future.

4. Assuming that all home sellers are desperate.

Sellers are generally more willing to negotiate in a buyer’s market. But they’re not all equally motivated. Some might be financially secure and willing to wait for a better offer to come along. Austin home buyers shouldn’t assume that every seller will accept a lowball offer.

5. Lowballing every offer regardless of the list price.

Offering significantly less than market value for a house could cause the seller to turn you down. This is true even in a buyer’s market, where homes often end up selling below the list price.

Purchase offers should be determined on a case-by-case basis, by factoring in the estimated value of the house and how much the buyer wants it.

On the Redfin website, an Austin real estate recently explained why her client’s offer was turned down by the seller. As she described it: “Buyer was lowballing by 10-20% on all homes and sellers are not negotiating 15% below list [price].”

Entering the real estate market with a blanket lowballing strategy will likely reduce your chance for success, even in a buyer’s market.

Disclaimer: This report contains forward-looking views that are the equivalent of an educated guess. The Home Buying Institute makes no claims about future real estate conditions.