Are Texas real estate prices dropping? Let's check 11 recent stats!

Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the Texas real estate spreadsheet template.

Thinking of buying in Texas? Get our financial spreadsheet tailored to this specific market.

In 2025, Texas homeowners and buyers might see a shift in the housing market, with signs pointing to a possible drop in prices.

We’ll break down 11 key data points to explore why this change could be on the horizon—from rising inventory to shifts in demand. Let’s dive into what could be driving a potential price decline for Texas homes in 2025.

This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.

1) More (+34%) Texas sellers are, as of now, cutting prices to get buyers interested

The trend of price reductions across Texas, where 34% of homes listed in September 2024 had their prices lowered, suggests that sellers are adjusting to meet a more cautious or price-sensitive buyer base.

The fact that price drops are up slightly from the previous year indicates that expectations are shifting among both sellers and buyers. As price reductions become more frequent, potential buyers may feel encouraged to hold out for further discounts, creating a self-reinforcing cycle of price drops.

This trend often reflects broader price declines on the horizon, as sellers respond to a market that no longer supports inflated prices.

Source: Redfin

2) Texas has more homes for sale (+16%), so buyers have choices, and prices might drop

Texas housing supply has reached its highest level since 2017. The rise in available homes for sale in Texas signals a shift toward a buyer’s market.

With inventory climbing 16.4% year-over-year, buyers now have more choices, easing competition among them. When competition cools, sellers often face pressure to price more competitively.

This is particularly evident in cities like Dallas-Fort Worth, where active listings have surged by a staggering 50% over the past year. Houston inventory has risen 32% year-over-year. More options generally mean buyers can afford to be more selective, leading sellers to reduce prices to secure a sale. In San Antonio, active listings are up 38% from pandemic levels.

When a high inventory level persists without a matching increase in demand, prices usually dip because there are simply more homes available than buyers willing to purchase at current prices.

Sources: Redfin, Home Buying Institute, Youtube

3) Homes in Texas aren’t selling fast (11 days longer), which can make sellers lower their prices

The fact that homes in Texas are now sitting on the market for a median of 54 days, up from 43 days last year, reveals that buyer interest may be waning.

In Austin, this number goes up to 67 days, significantly higher than other major cities. In Dallas, it's 42 days and it's increasing. In Houston, days on market increased to 51 days, up 9 days from previous year. San Antonio is currently around 46 days.

Longer days on market suggest that homes aren’t selling as quickly as they once did, often indicating a cooling market. For sellers, this can feel like an extended waiting game, and as properties linger unsold, many will lower their asking prices to attract interest.

The extended timeframe underscores how potential buyers may feel less urgency or even expect prices to fall, which reinforces the trend of lowering prices to align with buyer expectations.

Sources: Redfin, GoBankingRates, Home Buying Institute

4) Cities like Austin have seen big price drops (-20%), which could happen elsewhere in Texas

Austin’s housing market is showing signs of a significant shift, with home values down nearly 20% from pandemic highs and active listings now up to 10,387 from under 4,000 during the pandemic.

With properties, as seen above, spending an average of 67 days on the market, Austin’s real estate scene reflects a steep decline in demand. As buyers have more choices and are less pressured to make quick decisions, sellers may feel compelled to further reduce prices to compete.

This environment creates downward pressure on home prices, which could continue if demand doesn’t pick up significantly.

Sources: NewsWeek, GoBankingRates, KXan

Thinking of buying in Texas?

We have real estate spreadsheets fully tailored to this market. Get them now.

DOWNLOAD

5) Cities like Dallas are seeing slower sales, which can push prices down

Dallas is another area experiencing a slowdown, with median home prices projected to decrease by 2.3% year-over-year.

Homes now spend an average of 42 days on the market, and active listings have jumped by 39% from pandemic lows.

This confluence of factors—price declines, slower sales, and increased listings—suggests that demand isn’t keeping pace with supply. As sellers face more competition, they may have to reduce prices to secure sales, putting more pressure on prices in the coming months.

Sources: NewsWeek, GoBankingRates

6) Houston shows a negative growth forecast for 2025

Houston is also seeing signs of a cool-down, with home prices expected to drop by 0.7% through September 2025, alongside a 32% increase in inventory.

The average days on market has also risen, now sitting at 51 days. These indicators point to an environment where the supply of homes is outstripping demand, leading sellers to consider price reductions.

If these trends persist, Houston’s market could experience further price declines as buyers exercise more caution and fewer homes are bought.

Source: Home Buying Institute

7) Fewer people (-3%) are buying homes in Texas, which could lead to lower prices

A decline in the number of homes sold,dropping by 2.9% year-over-year, points to softening demand in Texas' housing market.

When fewer buyers are closing deals, sellers face increased competition among themselves to attract a limited pool of prospective buyers. Coupled with rising inventory, this drop in sales can intensify price competition as sellers adjust their prices to stand out.

This imbalance between supply and demand sets the stage for price decreases, as more homeowners become willing to lower their prices rather than wait indefinitely for a buyer.

Source: Redfin

8) Texas home values aren’t going up (-0.2%), which might lead to more price drops

With the average Texas home value declining by 0.2% over the past year, we see signs of a market where demand is not strong enough to push prices upward.

This stagnation or slight decline in home values points to a cooling phase, as fewer buyers are competing to bid up prices. When home values hold steady or decline, it indicates that the market may be approaching a tipping point, especially if demand fails to rebound.

If this trend continues, we’re likely to see further price reductions as sellers seek to attract increasingly selective buyers.

Source: Redfin

9) Experts think Texas home prices might stay the same or go down

Economic predictions, such as those from the Texas Real Estate Research Center, which forecast single-family home prices to remain flat or even dip slightly, reinforce the sentiment of a market with limited growth prospects.

Such predictions often reflect an awareness of conditions like high inventory levels, buyer hesitation, and potential economic challenges, all of which can prevent price increases.

Flat or declining forecasts underscore that the current market dynamics, including higher interest rates and rising inventory, may not support significant price growth, potentially leading to a further reduction in prices.

Sources: Texas Real Estate Research Center, The Luxury Playbook

10) San Antonio's market shows signs of weaknesses for 2025

San Antonio’s market, projected to see a 2.7% decrease in home prices year-over-year, also reflects weakening demand.

Properties now spend around 46 days on the market, and active listings have increased by 38% since the pandemic. This increase in available properties, coupled with slower sales, suggests that San Antonio’s housing market is adjusting to lower buyer interest.

As demand remains tepid, sellers may continue to lower prices to remain competitive.

Sources: GoBankingRates, NewsWeek

11) With Texas homes selling at 98.9% of their listing prices, sellers are losing power in negotiations

The statewide sale-to-list ratio in Texas, which has dropped to 0.989, signals a shift in the balance of power between buyers and sellers, with homes now selling below their asking prices.

This metric essentially tells us that sellers are having to accept offers below what they initially listed their properties for, meaning they don’t hold the same leverage they might have had in a hotter market. When sellers lose negotiating power, it generally indicates weaker demand or an oversupply of homes in the market—both of which can lead to price declines.

Buyers in this environment have more bargaining power and can often wait for price reductions, knowing that sellers are more willing to negotiate. This is a big shift from the conditions that Texas saw in recent years, where high demand often led to bidding wars and homes selling above asking price.

If this trend holds, it’s likely to bring more downward pressure on housing prices across Texas in 2025.

Source: Norada Real Estate

Get our spreadsheets tailored to Texas!

Our tools cover everything: NOI, COC, Cap Rate, Gross Yield, Net Yield, LTV, ROI, and numerous other metrics and charts.

DOWNLOAD

So, will Texas housing prices drop in 2025? Yes, they likely will!