Austin Area Market Shows Continued Balance Despite Economic Uncertainty and High Rates: Chuck Farr’s April 2025 Newsletter
Spring is still here--homeowners, tenants, sellers, prospective buyers, and real-estate investors. I got a late start to my April newsletter. Here is the usual blend of multiple-sourced articles with different perspectives on the local real-estate market. Let’s go!
Market Backchannel: As we enter late April, the Austin area real-estate market shows continued stability with a continuing steady price line. The latest March Central Texas data from my local realty network shows continued resilience as we continue into Spring and move into historical seasonal patterns (March through May are considered peak selling months). Months of inventory increased to 5.3 or 5.8 months (depending on the source) in March, indicating a balanced market leaning slightly in buyers’ favor. Average days on market hover around 95 days (sellers need to be patient). Median home prices in the entire Austin metro area are in the $430K to $440K range depending on data source. Current mortgage rates are holding steady but continue to throttle demand for some buyers. Consumer confidence remains choppy with the continued up and down economic uncertainty fueled by recent headlines.
AI on the Economy: For this month’s tiptoe through the AI tulips, I asked the xAI interface Grok for a refreshed summary outlook of the Central Texas residential real-estate market in 2025 as of late April. Here is what the large language model (LLM) said in response:
“As of April 25, 2025, the Central Texas residential real estate market, particularly in the Austin-Round Rock-San Marcos MSA, shows a mix of challenges and opportunities based on recent data and trends.
“Home sales in the first quarter of 2025 declined by 9.1% compared to the same period in 2024, according to a post from @austin_journal on X, reflecting a slowdown in buyer activity. However, February 2025 data from the Central Texas Housing Report by Patten Title Company indicates growing buyer interest, with increased pending sales across multiple counties, suggesting demand remains strong despite the quarterly dip. Inventory levels have also risen significantly, with active listings up 17.0% year-over-year in January 2025, per Unlock MLS, giving buyers more options and negotiating power. This aligns with broader Texas trends, where inventory has increased to 4.8 months of supply in Q3 2024, moving closer to a balanced market (four to six months), as noted by Ramsey Solutions.
“Median home prices in Central Texas show modest growth. In February 2025, the median price in Travis and Williamson Counties rose 1.1% to $470,000, according to Real Estate in Austin, though the average price per square foot dipped 1.4% to $288. Statewide, the Texas Real Estate Research Center projects the median home price to end 2025 just above $350,000, indicating slower price appreciation compared to Central Texas specifically. However, Austin has seen a cooling trend, with Zillow forecasting a 1.4% price drop by February 2025, per Norada Real Estate, due to a market correction following the pandemic-era buying frenzy.
“Homes are taking longer to sell, with the average days on market in February 2025 at 94 days in Travis and Williamson Counties, up from 82 days the previous year. This is higher than the statewide average of 61 days in October 2024, reported by the Texas Real Estate Research Center, reflecting slower sales in Central Texas. Mortgage rates, hovering around 6.5% for a 30-year fixed loan as of early April, per Bankrate, are at a four-month low, which may encourage more buyer activity in the coming months, especially as rates are expected to stabilize later in 2025, according to Houzeo.
“Overall, the Central Texas market in 2025 is leaning toward buyers, with increased inventory and longer selling times providing more leverage, though strong demand and modest price growth persist. The market isn’t expected to crash, as Texas remains stable with population growth and a robust job market, per Home Buying Institute, but affordability remains a challenge for first-time buyers amidst high interest rates and elevated home values.”
In the News: “According to the 2025-Q1 Central Texas Housing Report released by Unlock MLS, residential home sales across the Austin-Round Rock-San Marcos MSA declined to 6,698 listings, a 9.1% drop from the first quarter of 2024. During the same time frame, median sales price dipped 2.3% to $429,869 while housing inventory reached 5.3 months, moving the region closer into balanced housing market conditions.
“Quarterly numbers were strongly impacted by March 2025 sales activity, during which the five-county MSA experienced 9.3% fewer sales, gained 9.5% new listings and median sales price remained flat year-over-year.
“Clare Knapp, Ph.D., housing economist for Unlock MLS and the Austin Board of REALTORS®, pointed to affordability constraints as well as growing economic headwinds as key factors shaping early-year market activity.
“‘We started the year with a continuation of similar trends that shaped the market in 2024. However, stubbornly high mortgage rates and a weaker local labor market weighed on buyer confidence, while many sellers remained reluctant to adjust pricing expectations. That squeeze on buyer power shaped much of the activity we saw in the first quarter, reinforcing the need for greater flexibility and balance on both sides of the transaction.’
“For the first quarter of 2025, the number of active listings on the market saw an 18.9% increase from 2024-Q1, allowing buyers to benefit from greater choice and negotiating power, leading to longer decision timelines and more strategic purchases. These continued shifts point to a market that is evolving—offering a more thoughtful pace for both buyers and sellers.
“Austin-Round Rock-San Marcos MSA [Entire Metro Area]
“Q1 2025 - For Sale
6,698 – Residential homes sold, 9.1% less than Q1 2024.
$429,869 – Median price for residential homes, 2.3% less than Q1 2024.
12,649 – New home listings on the market, 8.5% more than Q1 2024.
31,930 – Active home listings on the market, 18.9% more than Q1 2024.
7,539 – Pending sales, 6.0% less than Q1 2024.
5.3 – Months of inventory, 1.1 months more than Q1 2024.
$3,440,987,846 – Total dollar volume of homes sold, 8.1% less than Q1 2024.
93.5% – Average close to list price, compared to 93.8% in Q1 2024.
“March 2025 - For Sale
2,461 – Residential homes sold, 9.3% less than March 2024.
$446,000 – Median price for residential homes, 0.9% less than March 2024.
5,142 – New home listings on the market, 9.5% more than March 2024.
11,659 – Active home listings on the market, 18.8% more than March 2024.
3,064 – Pending sales, 3.1% more than March 2024.
4.8 – Months of inventory, 0.7 months more than March 2024.
$1,447,661,800 – Total dollar volume of homes sold, 6.7% less than March 2024.
94.4% – Average close to list price, compared to 94.8% in March 2024.
“March 2025 - For Lease
2,021 – Closed leases, 0.2% less than March 2024.
$2,200 – Median price for rent, 4.1% less than March 2024.
2,387 – New lease listings on the market, 1.2% less than March 2024.
3,647 – Active lease listings on the market, 0.9% less than March 2024.
2,283 – Pending leases, 10.9% more than March 2024.
1.8 – Months of inventory, flat compared to March 2024.
$3,946,012 – Total dollar volume of leases, 8.4% less than March 2024.
96.8% – Average close to list price, compared to 97.1% in March 2024.”
For folks in the Austin MSA area, if you had bought a house in 2018 at the median price of $305K, its value would have increased to $502K by the May 2022 peak. Median price for the MSA is now still nearly $430K (if we use the Q1 2025 stats), so you would have still done well investing in Central Texas real estate. Check the latest Central Texas Housing Report for more details and data for the city of Austin (Travis) and surrounding counties. You will see a wide range across the area, so check where you live.
Spring Home Maintenance Tips: Spring is here--and has its own home maintenance checklist in Central Texas. Here are a few items to consider during April:
· Termites are no reason to panic, but these tiny subterranean critters simply move in the soil until they hit wood. Wood-destroying insects do just that; if unchecked, they can cause slow but devastating damage to your homestead and investment. Consider having your property inspected for termites every year or two; perhaps set up an annual plan with a pest control pro. March and April are the annual termite swarming season.
· It is property tax assessed-value protest time. I recommend your protesting your local tax assessor’s values every year. You can do this yourself online or in person, or you may want to hire a tax-protest consultant (I can refer you to good ones). And here is another reminder that if you bought a home last year (or this year) and reside there, do not forget to file your homestead exemption (and your over-sixty-five or disabled exemptions if applicable) at your local county tax office to save money on property taxes.
· Get your HVAC serviced no later than May. I usually do my Spring service in March or April because the May temperatures often have HVAC vendors terribly busy. Consider setting up a Spring-and-Fall annual contract to protect your investment in energy survival. Keep good records; just as buyers who want to know you changed the oil on your vehicle regularly, a future buyer may pay more for your house if you have proof that you maintained the HVAC, roof, termite inspections, etc.
When considering your real-estate needs and situation in the context of macro-level data, remember that your potential sale or purchase will always be hyperlocal. Let us know if we can help. Issues of this and previous newsletters are located on the Blog tab of my website at www.chuckfarr.com. Please DM or email me if you want your email added to my newsletter list.
