Austin Area Market Shows Continued Stability: Chuck Farr’s March 2025 Newsletter
Spring is here--homeowners, tenants, sellers, prospective buyers, and real-estate investors! The redbud trees and green shoots are popping everywhere. It is a beautiful thing.
Market Backchannel: As we enter late March, the Austin area real-estate market shows continued stability with a remarkably steady price line spanning the last 18 months. The latest February Central Texas data from my local realty network shows continued resilience as we head into Spring and move into historical seasonal patterns (March through May are considered peak selling months). Months of inventory increased to 5.1 or 5.7 months (depending on the source) in February, indicating a balanced market leaning slightly in buyers’ favor. Average days on market hover around 98 days (sellers need to be patient). Median home prices in the entire Austin metro area are in the $428K to $430K range depending on data source. Current mortgage rates recently dropped to near 6.7% but continue to throttle demand for some buyers. The Fed held interest rates steady during the last week, walking the razor’s edge between borrower pain and inflation. In Austin, tech hiring remains lethargic with no signs of major improvement. Consumer confidence is choppy with the advent of 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 summary outlook of the Central Texas residential real-estate market in 2025. Here is what the large language model (LLM) said in response:
“Central Texas, which includes areas like Austin and its surrounding suburbs, has been a dynamic market in recent years. As we move through 2025, a few key factors seem likely to shape the residential real estate scene. First, the region’s population growth continues to be a major driver. Texas as a whole is still attracting new residents thanks to its strong job market and relatively lower cost of living compared to coastal states. Central Texas, with Austin’s tech hub status and proximity to other growing areas like Round Rock and San Marcos, should keep seeing demand for housing.
“That said, the market appears to be stabilizing after the wild swings of the pandemic years. Home prices in Central Texas, especially in Austin, spiked dramatically in 2020-2022 but have since cooled off a bit. For 2025, I’d expect this trend to continue—prices might not drop much further, but the rapid appreciation we saw a few years ago is likely in the rearview mirror. Instead, we could see modest growth or even flat prices in some spots, giving buyers a bit more breathing room than they’ve had recently.
“Inventory is another big piece of the puzzle. Across Texas, the number of homes for sale has been creeping up, and Central Texas is no exception. More listings mean buyers have more options and less pressure to jump into bidding wars. In Austin specifically, the market has shifted from a seller’s paradise to something closer to balance. If interest rates ease up a bit more in 2025—which some analysts are hopeful for—that could nudge more sellers to list and more buyers to step in, keeping things active but not overheated.
“One wildcard to watch is Austin itself. It’s been an outlier in Texas with a sharper correction after its pandemic boom. Some forecasts suggest home values there might still dip slightly early in the year before leveling off, while surrounding areas like Temple-Killeen or Waco could see steadier growth thanks to affordability and spillover demand from Austin.
“Overall, I’d say the Central Texas residential market in 2025 looks promising but not explosive—more of a steady hum than a roar. Buyers might find it a friendlier environment than in recent years, while sellers in high-demand areas should still do well, especially if they price realistically.”
In the News: According to the Austin Board of REALTORS® and their service, Unlock MLS, “the median home price [in February] across the Austin-Round Rock-San Marcos MSA fell 3.9% year-over-year to $430,000, according to the latest Central Texas Housing Report released by Unlock MLS. While closed sales in the MSA dipped 6.5% year-over-year to 1,856 sales, rising inventory–up to 5.7 months of inventory––indicates growing opportunities for buyers heading into the spring homebuying season. In the leasing market, supply increased to 2.3 months of inventory, driving a 2.4% drop in median rent to $2,195.
“Clare Knapp, Ph.D., housing economist for Unlock MLS and the Austin Board of REALTORS®, noted that while elevated mortgage rates and affordability challenges have factored into the decline in sales, sellers are lowering prices to attract buyers, helping to further stabilize the market.
‘“As affordability remains a key constraint for many first-time homebuyers, the single-family leasing market continues to be a viable alternative. While closed sales have slowed this month, sellers adjusting their pricing strategies to align with market conditions are keeping transactions moving. With inventory levels rising, buyers are regaining leverage, creating a more favorable environment for those who have been waiting for the right moment to purchase. Mortgage rates are expected to remain elevated this year, which may not bring significant relief to buyers, but will provide more predictability, allowing both buyers and sellers to navigate the market with clearer expectations. As we head into the traditionally busy spring homebuying season, increased options and improved pricing flexibility could encourage more buyers to transition from renting to homeownership.’
“Austin-Round Rock-San Marcos MSA [the Entire Metro Area]
“February 2025 - For Sale
1,856 – Residential homes sold, 6.5% less than February 2024.
$430,000 – Median price for residential homes, 3.9% less than February 2024.
3,826 – New home listings on the market, 6.5% more than February 2024.
10,235 – Active home listings on the market, 16.7% more than February 2024.
2,452 – Pending sales, 5.0% less than February 2024.
5.7 – Months of inventory, 1.3 months more than February 2024.
$1,055,114,766 – Total dollar volume of homes sold, 4.9% less than February 2024.
93.5% – Average close to list price, compared to 93.6% in February 2024.
“February 2025 - For Lease
1,751 – Closed leases, 4.0% less than February 2024.
$2,195 – Median price for rent, 2.4% less than February 2024.
2,036 – New lease listings on the market, 2.0% less than February 2024.
3,899 – Active lease listings on the market, 3.5% more than February 2024.
1,977 – Pending leases, 6.5% more than February 2024.
2.3 – Months of inventory, 0.3 months more than February 2024.
$4,352,657 – Total dollar volume of leases, 6.2% less than February 2024.
96.4% – Average close to list price, compared to 96.0% in February 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 nearly $430K, 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 March:
· 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 almost property tax assessed-value protest time. Keep an eye out for a letter from your county soon if you are a property owner.
· 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 very busy. Consider setting up a Spring-and-Fall annual contract to protect your investment in energy survival.
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.
