Ed Neuhaus 
I’ve been watching this market every single day for the better part of two years now. And January 2026 is one of those months where the headline numbers look ugly but the story underneath is a lot more interesting than the story on top.
So lets dig in. Not the spin version. Not the doom version. The real version.
The Big Picture: Yes, January Was Soft
I’m not going to pretend the numbers are all sunshine. Across the Austin-Round Rock MSA, January closed sales came in at 1,566, down 14.8% from last year. Travis County was down 12.4%. Hays County dropped 18.5%. The metro-wide median sale price landed at $400,495, down about 2.3%.
Days on market? Elevated. The region-wide median sits at 69 days, up 3 from last year. And here’s the stat that makes everyone flinch: half of all active listings in the Austin metro have had at least one price drop. Half. That’s 6,435 out of 12,780.
If you stopped reading right here, you’d think the sky was falling.
But you shouldn’t stop reading here.
The Numbers Behind the Numbers
Here’s where it gets interesting. The data everyone focuses on (closed sales, median price) is backward-looking. Those January closings? They were negotiated in November and December. They tell you where the market was, not where it’s going.
The forward-looking indicators are telling a different story.
New under contracts are UP 5.6% while new listings are DOWN 6.9%. Read that again. Fewer homes coming to market, more buyers putting homes under contract. That supply-demand gap is narrowing, and it’s the single most important signal in this entire dataset.
Williamson County pending sales jumped 13.1%. The City of Austin is selling homes faster than last year, with days on market actually dropping 5 days. Hays County same thing, DOM down 3 days. The core markets are tightening up even while the headline numbers look soft.
And then there’s the seasonal pattern. Every year, without fail, days on market peaks in winter and drops sharply through spring. The Unlock MLS historical data shows this cycle repeating like clockwork. We’re sitting at the winter peak right now. By April, DOM typically drops 30 to 40 days from where it is in January.
The market is doing exactly what it does every year. It just happens to be doing it from an elevated baseline.
A Market of Three Markets
One of the most revealing things in the January data is that the Austin real estate market isn’t one market right now. It’s three.
Entry-Level ($0 to $300K): Surging
Sales are up 7 to 16% depending on the bracket. Affordability is pulling first-time buyers in. Months of supply in the $200K to $300K range is 5.3, the closest to balanced of any price segment. These homes are moving.
Mid-Range ($300K to $600K): The Squeezed Middle
Sales down 12 to 20%. These buyers are the most rate-sensitive. They qualified at one price point, rates moved, and now they’re either stuck or they’ve shifted down a bracket. This is where the correction is hitting hardest.
Luxury ($1.2M and Up): Quietly Strong
Sales up 3.5 to 6.5%, and these homes are selling faster than last year. DOM dropped 8 to 25 days depending on the bracket. At the $1.4M+ level, homes are going under contract 25 days faster than a year ago. Cash buyers and high-net-worth relocators don’t care about mortgage rates. They care about value, and they’re finding it.
Zoom In: Bee Cave and Lakeway Are Already Turning
Ok so that’s the 30,000 foot view. But I live and work in this market every day, specifically in the Bee Cave and Lakeway corridor. And what’s happening here right now is genuinely encouraging.
While the metro area saw sales decline 8.5% over the past 90 days, Bee Cave and Lakeway combined saw sales increase 17.9%. Sixty-six closings versus 56 the year before. That’s not a rounding error. That’s a real shift.
The median sale price in January hit $725,000, up 23.9% year over year. Now, with only 16 January closings, one or two high-dollar sales can move that median around. I get that. But the trend line across the full 90-day window confirms the direction: buyers are showing up in these Hill Country submarkets and they’re paying for quality.
And here’s the part that matters most for sellers: homes in Bee Cave and Lakeway are selling 30 days faster than a year ago. The median DOM across all price ranges dropped from 71 to 41 days. In the $600K to $700K range, DOM dropped from 139 days to 37. In the $1.4M+ range, it dropped from 142 days to 34.
These aren’t homes sitting. These are homes moving.
The supply side is tightening too. New listings in Bee Cave and Lakeway are down 27.7% from last year while new contracts are up 10%. That’s the same supply-demand compression we see at the metro level, but amplified. Fewer options for buyers, more competition for the good ones.
What About Price Drops?
Across the metro, 50% of active listings have had a price drop, with an average reduction of 15%. In Bee Cave and Lakeway, 48% have dropped, but the average reduction is only 7%. That’s half the adjustment.
The data is telling you something important here. Sellers in premium submarkets aren’t having to cut as deep to find a buyer. And when they do drop price, they’re going under contract in a median of 27 days versus 37 for the broader market.
The message for sellers is the same everywhere, just louder in some zip codes: price it right from the start and you’ll sell. Price it aspirationally and you’ll be one of the 50% dropping your price three weeks later.
Prices at Three-Year Lows: What That Actually Means
The metro-wide median sale price at $391,364 is at a three-year low. Price per square foot at $236 is also at a three-year low. For anyone who’s been waiting on the sidelines, this is the data point you’ve been waiting for.
I’m not saying prices are about to skyrocket. The days of 20% annual appreciation are probably behind us for a while, and frankly that’s healthier for everyone. But I am saying the combination of three-year-low pricing, elevated inventory giving you choices, and sellers willing to negotiate is a window that won’t stay open forever.
The Austin housing market forecast we published last month laid out the case for gradual recovery through 2026 and into 2027. Nothing in the January data contradicts that thesis. If anything, the leading indicators (new contracts up, supply down, seasonal improvement ahead) strengthen it.
For Buyers: This Is Your Window
If you’ve been thinking about buying, here’s the honest truth. You have more leverage right now than you’ve had in years. Inventory is high, sellers are negotiable, and you’re buying at prices we haven’t seen since 2023.
Is the market going to suddenly flip to a seller’s market next month? No. But the trajectory is clear. Supply is shrinking. Demand is growing. Spring is coming. And when those lines cross, the negotiating power shifts.
The buyers who will look back and feel best about their timing are the ones who bought in a window like this, not the ones who waited for some perfect signal that the bottom was in. By the time everyone agrees it’s the bottom, prices have already moved.
If you want to talk through what the data means for your specific situation, whether you’re looking in Bee Cave, Lakeway, Westlake, or Dripping Springs, reach out. I look at this data every day. Happy to walk you through it.
For Sellers: Price It Right, Price It Once
Half of all active listings have had a price drop. The average time before that price drop? Twenty days. After the drop, the median time to go under contract is 37 days. So the typical seller who overprices is looking at 57 days before they get to where they should have started.
The sellers who aren’t dropping prices are the ones who priced correctly from day one. In Bee Cave and Lakeway, correctly-priced homes in the $600K to $800K range are going under contract in 25 to 37 days. That’s not a broken market. That’s a market that rewards honesty.
If you’re thinking about selling your Austin home in 2026, the data is clear: lead with the right price and you’ll sell in a reasonable timeframe. Lead with hope and you’ll chase the market down.
The Bottom Line
January 2026 wasn’t a great month for Austin real estate by the headline numbers. Sales volume down, prices softened, DOM elevated. I’m not going to pretend otherwise.
But underneath those numbers, the floor is forming. The supply-demand dynamics are shifting in the right direction. Seasonal patterns point to meaningful spring improvement. Premium submarkets like Bee Cave and Lakeway are already turning. And prices at three-year lows create a genuine buying opportunity for people willing to act while the window is open.
This isn’t a market to panic about. And it’s not a market to ignore. It’s a market to pay attention to, because the next six months are going to matter.
Ed Neuhaus is the broker of Neuhaus Realty Group, specializing in Austin’s Hill Country corridor including Bee Cave, Lakeway, Westlake, and Dripping Springs. Reach out anytime to talk market data.
Frequently Asked Questions
Is Austin a buyer’s market in January 2026?
Yes. With 6.93 months of supply metro-wide, elevated inventory, and half of all listings having price drops, buyers have significant negotiating power and choices in January 2026.
Are Austin home prices going down in 2026?
The metro-wide median sale price hit $391,364 in January 2026, a three-year low and down 2.2% from last year. However, average sale prices held flat and premium submarkets like Bee Cave and Lakeway saw prices increase. The correction appears to be maturing rather than accelerating.
How long are homes taking to sell in Austin?
The metro-wide median days on market is 69 days as of January 2026. However, this varies significantly by location and price range. In Bee Cave and Lakeway, properly-priced homes in the $600K to $800K range are going under contract in 25 to 37 days.
Is now a good time to buy a house in Austin?
The combination of three-year-low pricing, elevated inventory giving buyers choices, and sellers willing to negotiate creates one of the strongest buyer windows in recent memory. Leading indicators like rising new contracts and shrinking new listings suggest this window may not last through 2026.
