This week’s Monday Touch Point highlighted softening buyer follow-through, sustained inventory pressure, and widening pricing friction across the Austin housing market. Even with modest improvements in rate conditions, pending activity continues to trail last year, reinforcing that affordability constraints and buyer confidence—not financing alone—are limiting market momentum. Rising back-on-market counts, elevated price reductions, and increased withdrawals point to a market where sellers are still adjusting to current demand realities.

Where the Austin Market Stands as the Year Closes

With Christmas week underway and activity naturally slowing, this Monday Touch Point focused on one core question: how is the Austin real estate market actually performing as we close out the year, and what does that mean heading into 2026? Looking at the data 22 days into December gives us a clear early signal, especially since very little meaningful activity will occur during the final days of the month.

The most important metric to understand right now remains the new listing-to-pending ratio. This ratio strips away seasonal noise and shows, in real time, whether inventory is being absorbed or accumulating. A ratio of 1.0 represents equilibrium. This week, the ratio sits around 0.68, well below last year’s 1.09 for the same week. That tells us inventory is building, not tightening, and this trend has now persisted for five consecutive weeks.

Inventory Is Building, Not Stabilizing

Active inventory across the six-county Austin area continues to rise, now sitting around 13,750 active listings, a year-over-year increase of roughly 15%. More than half of these listings have already had at least one price drop. That alone tells you sellers are still chasing yesterday’s pricing while buyers are firmly in control.

Back-on-market activity is one of the most concerning signals. Roughly 27% to 30% of listings are returning to the market, which is one of the highest rates seen outside of prior downturns. This is not random. It reflects failed negotiations, inspection fallout, and buyers walking when sellers refuse to adjust. In today’s market, buyers expect concessions, repairs, and realistic pricing. Sellers who resist are quickly punished.

Buyer Leverage Is Driving Behavior

Buyer behavior has shifted decisively. Inspection negotiations are aggressive, not because buyers are unreasonable, but because leverage has swung in their favor. When inventory is abundant and options are plentiful, buyers demand more. The data confirms this: pendings are down year-over-year by double digits, while price drops and withdrawals are climbing.

This collision between buyer expectations and seller resistance is the primary reason transactions are failing. Sellers who understand the market are adjusting early and getting deals done. Sellers who don’t are becoming part of the back-on-market statistic.

Pending Activity Signals Lower Closings Ahead

Pending transactions are the leading indicator for future closings, and the signal is clear. Pending activity is down approximately 10–15% compared to last year, depending on final reporting. That means closings in early 2026 will also be down. This isn’t speculation. If homes don’t go pending, they can’t close.

December will likely become the first December since 2011 where the market fails to reach a ratio above 1.0. That’s historically significant. While this is nowhere near the chaos of 2007–2010, it does confirm that the market is firmly in a corrective phase.

Rental Supply Is Feeding the For-Sale Market

One of the most overlooked drivers right now is rental inventory. Across Austin and surrounding cities, available apartment units are approaching 50,000 when nearby markets are included. That level of supply places downward pressure on rents, which in turn pressures small landlords. As rent growth stalls, more rental owners are choosing to sell, adding additional inventory to the resale market.

Builders are responding by slowing new construction, which may limit future oversupply several years down the road, but in the near term, inventory pressure remains firmly intact.

What This Means for Agents Right Now

Buyers are active, informed, and watching closely. Website traffic, search impressions, and engagement continue to rise, confirming demand exists. What’s missing is willingness, not ability. Buyers believe conditions will improve further, and many are waiting.

That means the role of the agent is not to pressure, but to guide. Providing clear data, honest pricing advice, and consistent communication is how trust is built in this environment. Agents who stay engaged will be positioned to capture business as willingness eventually returns.

Looking ahead, 2026 may not be the easiest year operationally, but it absolutely has the potential to be a very strong year for agents who understand leverage, pricing psychology, and timing.