The Austin real estate market entered September with a noticeable shift from the momentum we saw in August. After a month of consistent year-over-year growth in pending contracts, the past three weeks have shown lagging pendings compared to last year. Despite an improved rate environment, this shift highlights how quickly sentiment and activity can change. As of September 15, active listings stand at 17,088, one of the highest points of the past two years, and 58.1% of those listings have experienced at least one price drop.

The New Listing to Pending Ratio

The most telling number remains the new listing to pending ratio. For the first half of September, the ratio sits at 0.57—meaning that for every 100 homes listed, only 57 have gone under contract. This places the market firmly in a contraction phase, adding more weight to inventory. In fact, cumulative new listings this year are already 7,232 higher than cumulative pendings. While August looked like a rebound, September’s numbers have reset expectations.

Year-over-Year Comparisons
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Year-over-year analysis further confirms this market cooling. New listings are running nearly even with last September, but pendings are lagging by about 7.6%. On the sold side, transactions are down almost 63% year-over-year so far this month. While some of this lag is due to reporting delays, the trend is clear: inventory is outpacing demand.

Pricing Dynamics
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The good news is pricing has shown some recent strength. The median price jumped from $415,000 on Friday to $435,000 by Monday, a swing that brings the year-over-year change into positive territory at +2.4%. The top quartile of the market is especially strong, with homes above $645,000 appreciating 5.1% over the past year. In contrast, the bottom quartile has slipped 4.5%. This divergence reinforces the importance of pricing strategy—well-positioned higher-end homes are still attracting strong demand, while affordability pressures weigh on entry-level properties.

Looking at the Bigger Picture
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From a long-term perspective, the market remains about 20.9% below its May 2022 median peak. If today marks the bottom, it would take an estimated five years, based on 25-year compound appreciation rates, to fully recover those values—placing the return to peak in late 2030. This reinforces the reality that real estate is a long game. Short-term swings will occur, but steady engagement with the data allows us to guide clients with confidence.

Interest Rates and Economic Drivers
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Rates remain one of the brightest points in the current environment. Conventional 30-year mortgages are now averaging 6.375%, the lowest level in nearly a year. FHA, VA, and USDA products are even lower at 5.75%. The bond market continues to show strength, and all eyes are on the Federal Reserve’s meeting this week. With widespread expectations of a 25 basis point cut, the rate environment could improve further.

Key Takeaways for Buyers and Sellers
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For sellers, the message is clear: pricing must be strategic. Over half of active listings have required price reductions, and buyers are scrutinizing value more closely than ever. For buyers, this market presents opportunity, particularly with rates improving. The combination of higher inventory and favorable financing creates leverage that was absent during the peak frenzy. For agents, the importance of data-driven guidance has never been greater.​