Redfin Says We’re in the “Great Housing Reset.” Here’s the Data That Shows Austin May Be at the Bottom Right Now.

Ok so Redfin dropped a report and called it “The Great Housing Reset,” and they weren’t being subtle about it. They named 22 cities going through a significant correction cycle. Austin made the list.

Before you spiral, lets actually look at the data, because there’s a version of this story that’s scary, and there’s a version that’s genuinely interesting if you’re a buyer right now. I’m going to walk you through both, and then tell you which one I think is closer to the truth.

I’ve been watching the Austin market for 19 years. I’ve seen the hype cycles, the doom cycles, and the periods in between where the real opportunities quietly show up. This is one of those periods in between.

What Redfin Actually Said (Not the Headline Version)

The term “Great Housing Reset” sounds alarming. It’s designed to. But Redfin was actually pretty specific about what they meant: “a yearslong period of gradual increases in home sales and normalization of prices as affordability gradually improves.” They were explicit that this is not a quick price correction, and it won’t be a recession.

So we’re talking about a multi-year normalization. Not a crash. A reset. There’s a meaningful difference, and it matters for what you do next.

Nationally, Redfin is forecasting mortgage rates averaging 6.3% in 2026 (down from 6.6%), home prices rising about 1%, and sales volume ticking up 3% to roughly 4.2 million annualized. That’s a slow thaw, not a melt-up or a meltdown.

Austin is in a different category, though. Austin is one of those 22 cities they flagged as a “former pandemic boom town” that overcorrected during COVID. And honestly? That framing is fair. But framing isn’t the same as fate.

How Far Did Austin Actually Fall?

Lets put some real numbers on this, because the internet is full of headlines that either catastrophize or whitewash what happened here.

Austin’s median home price hit roughly $550,000 in May 2022. By the end of 2025, the MSA median had settled around $435,000. That’s a nominal decline of approximately 20%. Adjusted for inflation, the drop is closer to 27%.

That’s not a rounding error. That’s a genuine correction. Austin absorbed one of the sharpest price pullbacks of any major U.S. metro, and it happened fast. Buyers who purchased at the peak in 2022 and needed to sell in 2024 or 2025 felt it.

But here’s the thing about 20% corrections: they end. And the data is starting to show some signals that this one might be ending now.

The Signals That Tell Me Austin Is Near the Bottom

December 2025 was the first month in a while where I started seeing the pattern shift. Not dramatically. Not in a way that would make a headline. But real estate bottoms don’t announce themselves with a press release, they show up in the numbers before anybody notices. Here’s what I’m looking at:

Sales volume went UP 4.1% year-over-year. In December. Not the busiest month. When buyers start re-engaging in December, that’s not noise. That’s a signal.

Pending sales climbed 1.2%. Pending sales are forward-looking. They tell you where the market is going, not where it was. Up is the right direction.

New listings fell 5.1%. Fewer sellers entering the market means the supply pressure that drove prices down is starting to ease. You can’t have a recovery without that.

Price declines are slowing dramatically. The city of Austin saw prices down only 0.6% year-over-year in December. After a 20% correction, 0.6% looks a lot like the market finding its floor.

And then there’s the builder pullback. Multifamily permits in greater Austin dropped from a pandemic peak of about 95 units per 10,000 people down to 64.5. Builders don’t build when they can’t make the numbers work. Less new supply coming into the pipeline is, paradoxically, a bullish signal for existing home buyers.

Benjamin Graham wrote that the best time to buy is when there’s blood in the streets, even if some of the blood is your own. Austin had its blood-in-the-streets moment. We’re cleaning it up.

Why “Reset” Is the Right Word and “Crash” Is the Wrong One

The pandemic broke Austin’s housing market in a very specific way. Remote work created a wave of demand from people who could suddenly work from anywhere. Austin was the obvious answer. California money, Texas taxes, Hill Country views, live music on 6th Street on a Tuesday night. The math made sense and everyone knew it at the same time.

That’s not a sustainable condition. When you compress 10 years of migration into 18 months, you get a spike, not a trend. Prices went parabolic because demand hit a hard constraint (not enough houses) all at once. Then rates doubled and the music stopped.

A crash is when the fundamentals break. A reset is when irrational exuberance corrects back to what the fundamentals actually support.

And the fundamentals in Austin? They haven’t broken. Not even close.

Austin’s Economic Foundation Is Intact

Let me just put this in front of you, because people forget this when they’re reading doom-scroll headlines about price drops.

Austin’s GDP totaled $268 billion in 2024, growing 3.7% in real terms. From 2020 to 2025, the metro’s real GDP grew 39%. That’s not a number you manufacture. That’s the result of Apple, Meta, Oracle, and Tesla all making major commitments to this market, plus a manufacturing sector that’s still growing. Samsung is completing a $17 billion semiconductor factory in Taylor, right up the road, with thousands of jobs expected through 2026 and beyond.

Tech jobs make up 16.3% of all employment in Austin, which is dramatically higher than the national average. Austin is one of just two large tech markets projected to post 6% or more year-over-year tech job growth in 2025-2026.

The people who moved here for jobs during the pandemic? Most of them are still here. The jobs didn’t leave. The speculative demand on top of those real jobs was what needed to correct, and it did.

At Neuhaus Realty Group, we specialize in West Austin and the Hill Country precisely because we believe in the long-term fundamentals of this market. The correction didn’t change that belief. If anything, it confirmed it.

What This Actually Means If You’re Buying Right Now

Ok so here’s where I’ll give you my actual take, not the hedge-everything version.

If you’re waiting for Austin to hit an obvious bottom before you buy, you’re going to miss it. Bottoms are always obvious in hindsight. In real time, they look like “probably still falling” right up until the month they stopped. December 2025 data is showing me signs I haven’t seen in 18 months. I’m not going to sit here and tell you prices are definitely done falling. But I will tell you that the environment for buyers right now is better than it’s been since before the pandemic, maybe better.

Here’s what I mean by that. When I look at active listings in the Austin MSA right now, about 12,800 homes are on the market. Over half of them have already done price reductions. The average home is sitting for 50 to 70 days. Close-to-list ratios are running around 91%.

That’s a buyer’s market. Not forever, but right now.

What does a buyer’s market get you? Terms. Inspection objections get resolved. Seller concessions happen. Closing cost contributions are negotiable. Appraisal gaps get covered. You’re not writing love letters and waiving contingencies and bidding 15% over list. You’re negotiating like a normal human being, which hasn’t been possible in Austin since approximately 2019.

I talked about this in my piece on why Austin’s slow market is actually your green light, and the logic holds even more after seeing December’s numbers. The window for this kind of leverage doesn’t stay open forever. It closes when buyer confidence returns, which is what the pending sales data is starting to show.

There’s also a rate angle here worth noting. If you buy now and rates drop further (Redfin projects 6.3% average for 2026), you refinance. If you wait for rates to drop first and demand spikes back up, you pay more for the house. The house wins either way. What changes is how much you paid for it.

My recent piece on rent vs. buy in Austin for 2026 goes deeper on that math if you want to work through the numbers yourself.

The Inventory Picture: What It’s Really Showing

Active listings are elevated, yes. 12,800 homes sounds like a lot. But months of supply for the city of Austin proper actually came in at 4.0 months in December. That’s elevated compared to the sub-1-month madness of 2021, but it’s not a disaster. A balanced market is 4 to 6 months. We’re at the low end of balanced.

And here’s the thing that doesn’t make the headlines: new listings are falling. Sellers are getting tired of testing the market. Homeowners with sub-3% mortgages aren’t going anywhere voluntarily. So the inventory that’s there now is largely sitting because it’s priced wrong, not because buyers aren’t interested. Correct pricing gets properties under contract. I’m seeing it on deals we’re working right now.

The January 2026 market report I put together called it “The Floor Is Forming.” Two months later, that call is holding up.

Which Neighborhoods Are Doing What

Not all of Austin corrected equally. The MSA-wide numbers hide a lot of variation. Here’s a quick read on what I’m seeing:

Travis County came in at a $499K median in December with sales up 6.1%. That’s the strongest performer in the data. Williamson County is softer at $415K, down 3.5% YoY. Hays County is at $395K with sales down almost 11%. Bastrop is at $333K with an unusual 11.9% price drop year-over-year.

The Hill Country corridor (Bee Cave, Lakeway, Dripping Springs, Westlake) is a different category from the broader MSA stats. Those markets have their own supply constraints and buyer profiles. If you’re looking in West Austin specifically, the dynamics are different from what you’d expect from the headline numbers. You can browse current Bee Cave listings, Lakeway listings, or read my full breakdown of West Austin prices by neighborhood to see the micro-level detail.

The Bottom Line

Redfin naming Austin in “The Great Housing Reset” isn’t news if you’ve been watching this market. We already knew the correction was real. The 20% drop from peak is real. The elevated inventory is real.

What’s also real: a $268 billion and growing economy. Tech job growth outpacing the national average. A manufacturing investment wave that isn’t slowing down. Buyer activity ticking up in late 2025 for the first time in a year. Price declines narrowing to near zero. New supply coming off the pipeline.

Those two sets of facts can coexist. A market can correct hard and still have its fundamentals intact. That’s what makes it a reset, not a crash.

If you’re a buyer looking at Austin right now, you have something buyers in 2021 would have paid a premium for: time, options, and leverage. Use them.

Want to talk through what this means for your specific situation? Connect with me directly and lets look at the numbers together. I’ve been doing this in Austin for 19 years. I’m not going to tell you what you want to hear. I’m going to tell you what the data shows.