Housing Monitor: October 2026, seller price cuts rise as absorption holds

The tension this month is straightforward: sellers are reducing asking prices more often, yet buyers are still putting homes under contract at roughly the same pace relative to available inventory as a year ago. Price cuts therefore signal pressure on sellers' initial expectations, while the contract data keep the case for a sudden countywide supply glut from getting ahead of the evidence. The monitor's rating weighs both signals. Buyers may find more room to negotiate; sellers should treat an asking price as a test of demand, not as proof of the eventual sale price.

Views come from the Comal Housing Conditions Index components; arrows show 3-month momentum.

Scores run from −100 (bearish for prices) to +100 (bullish). Hard distress data is not published online, so its weight is redistributed.

Dashboard

Three moves matter most: September's price-cut share reached 27.9%, up 4.9 percentage points from a year earlier; active listings rose 6.7% year over year to 1,874 while pending sales rose 7% to 444; and the mortgage-rate reading moved from a September average of 6.86% to 7.4% for the week of October 8. The first points to seller stress, the second to broadly steady absorption, and the third to an affordability risk that may show up in later contract data. The two rate figures cover different periods, so their difference is a watch point rather than a seasonal comparison of home sales.

Year-over-year changes are the primary read; housing data is seasonal. Momentum compares the last 3 months with the 3 before, each against a year earlier.

Seller stress

The share of listings with a price cut is a leading indicator of sellers adjusting to the bids they are receiving—or failing to receive—before a closed-sale price appears in the data. September's 27.9% share is meaningful because the rise is measured against the same month a year earlier, limiting the risk of mistaking an ordinary seasonal change for a new trend. A cut to an asking price does not establish that the home ultimately sold at a discount. It does show that more sellers have had to revise the terms on which they are seeking a buyer.

That pressure matters most for owners setting a new listing price: recent asking prices may be less useful than the prices at which comparable homes actually enter contract and close. For buyers, the higher cut share may create negotiating opportunities, but it is not a blanket measure of bargaining power. The monitor reads seller stress alongside contracts and inventory precisely because a rising cut share can coexist with continued demand. The next reading will be more persuasive if cuts remain elevated while the pending-to-active ratio weakens; a retreat in cuts with steady contracts would soften the bearish signal.

Supply and liquidity

The pending-to-active listing ratio was 0.237 in September, almost unchanged from 0.236 a year earlier. That comparison is central to the call. More homes were advertised, but the number under contract rose at a similar year-over-year rate. On this measure, added choice has not yet translated into a clear new imbalance between available homes and buyers willing to commit. Inventory growth still matters for an individual seller facing competing listings; the ratio says the countywide increase has so far been matched by contract activity.

Active inventory is a leading measure of choice, while pending sales register demand closer to the point of purchase. Neither is a final sale or a guarantee that every contract will close. Their relationship is more useful than either count alone when asking whether supply is outrunning demand. If listings continue to expand and pending sales stop keeping pace, price pressure could intensify beyond what the current ratio suggests. If both keep growing together, the market may absorb new supply without a comparable additional decline in prices. The October forecast leaves room for either a modest fall or no fall.

A lower ratio means more homes on the market for each one going under contract.

Prices

The price series disagree, and their dates and definitions explain why they should not be collapsed into one headline number. Zillow's Home Value Index was $430,990 in August, down 1.2% from a year earlier. September's median listing price was $479,500, down 6% year over year. Zillow's median sale price for July was $485,000, up 5.4% from a year earlier. Asking prices, estimated values and closed-sale medians capture different sets of homes at different points in the sale process. The July sales figure is also older than the listing reading.

For the 3–6 month call, the softer home-value and asking-price readings carry more weight as evidence of current pricing pressure than the older sale median does. The positive sale-price comparison still matters: it cautions against saying that every measure shows falling prices. A median can also change when the mix of homes sold changes, even without the same price movement for a comparable home. The Home Value Index is the measure against which this first edition's forecast will be graded, so the forecast and its later score will use the same yardstick.

The practical implication is to separate a list-price negotiation from the market's underlying price path. An owner can cut an ambitious ask without establishing an equivalent fall in local home values. A buyer can see a lower advertised price without knowing whether the property is now cheap relative to comparable sales. The model's -3% to 0% range applies to its stated near-term housing outlook, not to a promised discount on any listing. Later value-index readings will tell us whether the current seller adjustments preceded a measurable countywide decline.

Zillow Home Value Index (mid-tier, smoothed, seasonally adjusted) and Zillow median sale price.

Different property populations (listings vs. closed sales); track the spread's direction, not its level.

Builders and new supply

August's 263 permits were up 87.9% from a year earlier, a sharp change in that month's flow of potential new construction. The trailing-year total tells a different story: 2,356 permits, down 0.5%. A single strong month therefore does not yet establish a sustained acceleration in building. Permits are a leading supply indicator, not a count of completed homes available to buy today. Their effect on prices depends on how many permitted projects proceed, when homes reach the market and whether demand absorbs them.

The distinction between a monthly flow and a trailing-year total is especially useful when judging near-term risk. August's gain makes future inventory worth watching, while the nearly flat trailing-year comparison keeps the longer construction pipeline from being described as a new boom. Builders can influence both the quantity and pricing of homes offered to buyers, but the permit count alone does not identify particular projects, their completion dates or their eventual terms. The next permit readings will show whether August began a persistent expansion or was an isolated increase.

U.S. Census Bureau Building Permits Survey. Permits are not completions.

Permits are not completions, and household size for newcomers can differ from the county average.

Affordability

Principal and interest on the modeled median-priced home took 26.1% of median income. That share excludes property taxes, insurance and homeowners-association charges, so it is narrower than a household's full ownership cost. It nevertheless shows why financing conditions can have a direct bearing on demand: a change in borrowing cost alters the payment required to carry a given price. Buyers comparing homes should add the excluded costs before treating the model share as their own budget. Sellers should watch whether rate pressure changes the pool of qualified offers.

The September 30-year mortgage-rate average was 6.86%; the latest weekly reading in the record, for October 8, was 7.4%. These are differently timed rate measures, and neither by itself proves that buyers withdrew from the market. The later, higher reading creates a forward-looking test. If it persists, the same house price could become harder to finance, which may affect contracts before a change appears in closed sales or the value index. If rates ease, stable absorption could help the market reach the flat end of the model's forecast range.

Principal and interest only, 20% down, 30-year fixed at the month's average Freddie Mac rate. Property tax, insurance and HOA are not included.

Freddie Mac Primary Mortgage Market Survey.

Principal and interest only, 20% down, 30-year fixed at the month's average Freddie Mac rate. Property tax, insurance and HOA are not included.

Economy and demographics

Housing demand rests partly on incomes and employment, but the economic series do not point in precisely the same direction. Resident employment was down 0.2% from a year earlier, while the county jobs count was up 1% in the first quarter. One measures employed residents and the other jobs located in the county; the periods also differ. The jobs gain offers some evidence of local economic activity, while the resident-employment reading gives no comparable confirmation of strengthening household demand at the later point.

This is a reason to separate economic strength from housing strength. A county can add jobs and still have a rate-constrained housing market if purchase payments rise beyond what prospective buyers can comfortably carry. Conversely, housing contracts can hold up for a time even when a labor indicator softens. The monitor treats employment as context for the durability of demand, not as a substitute for the observed listings, pending sales and prices. Future employment readings matter because a sustained weakening of buyers' incomes would make the bearish housing case harder to reverse.

Submarkets

The countywide index is a starting point for a decision about one part of Comal County, not a price forecast for every neighborhood or price tier. The model's submarket data should be read alongside the relevant home's competing listings and recent transactions. Countywide pending sales can keep pace with countywide inventory while a particular segment faces more competing homes—or fewer. That possibility is especially important for sellers deciding whether to adjust an asking price and for buyers judging whether a cut reflects an opportunity or an initial overpricing.

The same discipline applies to new supply. A county permit total can flag a potential pipeline without showing how many of those homes will compete with a particular resale listing. A buyer looking for an existing home and a seller in a new-build-heavy area may experience the same county-level conditions differently. The monitor's forecast is a county-level view, and it should be checked against the submarket figures in the underlying data before it is used to make a property-specific judgment. This edition does not turn the county index into a subdivision forecast.

Realtor.com ZIP-level inventory data. Small markets swing month to month.

How Comal compares

Comparisons with other markets are most useful when they test a mechanism, rather than supply a ranking. For Comal, the mechanism to watch is whether increased choice and higher financing costs begin to outrun contracts. A neighboring market with a different mix of listings, prices or new construction could react differently to the same borrowing rate. The peer data in the Housing Monitor provide context for that question; the Comal rating and outlook remain grounded in the county's own seller cuts, absorption, prices, affordability and permit readings.

Readers should also compare like with like. A lower median listing price elsewhere does not, by itself, mean that market is more affordable to a household with a particular income, and a stronger sale-price median does not prove faster appreciation of comparable homes. The same series, period and definition must line up before a peer difference becomes evidence of relative strength. In Comal's own data, the divergence between July sales, August values and September asking prices demonstrates why that caution matters. The monitor's county call does not require those different measures to tell an identical story.

Realtor.com county, state and national inventory data.

Risks and outlook

Bull case: Pending sales continue to rise at least as quickly as active listings, the price-cut share retreats and mortgage rates ease from the later October reading. That combination would suggest buyers can absorb available homes with less pressure for sellers to revise asking prices. The next month's pending-to-active ratio and cut share are the immediate tests; later Home Value Index readings will show whether the market moves toward the flat end of the model's -3% to 0% range. This is a conditional path within the stated outlook, not a separate higher-price forecast.

Base case: Seller adjustments remain visible, contracts broadly keep pace with listings and the value index softens modestly. That fits a Moderately Bearish index reading more closely than either an abrupt collapse in demand or an immediate return to price growth. The year-over-year cut share, the pending-to-active ratio and the next value-index release will show whether the market is following that path. For sellers, the operative question is whether a realistic asking price produces a contract; for buyers, it is whether the financed payment remains workable.

Bear case: The higher mortgage-rate reading persists, pending sales fail to keep pace with listings and additional permitted supply reaches buyers before existing homes are absorbed. More price cuts under those conditions would strengthen the evidence of seller stress. The next contract, inventory, rate and permit readings are the checks; a later decline in the Home Value Index would confirm that pressure has moved beyond asking prices. The current data support monitoring that risk, while the model's stated 3–6 month outlook remains -3% to 0%.

Track record

This is the first edition of the Comal County Housing Monitor, so there is no earlier call to grade. The Monitor will grade this call against the Zillow Home Value Index at 3 and 6 months. It will report hits and misses against the stated range rather than judge the forecast by a later asking-price or sale-median series with a different definition. That choice matters because the price measures already disagree in this edition; switching measures afterward would make the call impossible to evaluate fairly.

The next decision point is the following month's Housing Monitor: check whether seller price cuts ease, whether pending sales still keep pace with active listings, and whether financing conditions begin to appear in contracts. Readers can inspect the underlying series and the stated October call in the Comal County Housing Monitor data. Those subsequent observations will test the thesis; they do not change the range or High conviction recorded for this edition.