The 1 Factor That Explains Everything Happening with Home Prices Right Now

 

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You've probably heard that home prices are cooling off. And that's true – nationally. But zoom in on individual markets across the country, and the picture looks completely different depending on where you are.

Some areas are still seeing solid price growth. Others have gone flat. A few have actually dipped slightly negative. So, what's causing all of that variation? 

It All Comes Down to Inventory

Here's the simple version:

1. When there are more homes for sale, buyers have options.

2. More options, means less competition.

3. Less competition means sellers can't push prices as high.

On the flip side, when inventory is tight, buyers are competing over a small pool of homes, and that pushes prices up.

That dynamic is playing out right now in a really visible way across the country. 

Markets where inventory has climbed back to, or above, normal pre-pandemic levels are seeing prices flatten or fall slightly. Markets where inventory is still well below those 2019 benchmarks are still seeing prices rise. As Lance Lambert, CEO of ResiClub, puts it:

"Home prices are still climbing a little year-over-year in many regions where active inventory remains well below pre-pandemic 2019 levels, such as pockets of the Northeast and Midwest.

In contrast, some pockets in states like Texas, Florida, and Colorado — where active inventory exceeds pre-pandemic 2019 levels by a solid clip — are seeing modest home price pullbacks or flat pricing."

The Maps Say It All 

Take a look at where inventory stands today compared to 2019. In most places (the states in gray below), inventory still falls short of where we were back then. And that’s exactly why prices are climbing, albeit moderately, in the vast majority of states.

But you’re probably more interested in where prices are falling a bit, since that’s what is making headlines. So, let’s prove out how much inventory affects prices in those spots.

According to Realtor.com, 15 states and Washington, D.C. are now back above pre-pandemic inventory levels, and some by a wide margin (see the orange in the map below):

Now, let’s look at the latest Federal Housing Finance Agency (FHFA) data to see what's happened to home prices in those same states over the past year (again, you’ll want to focus on the orange in the next map). 

See how those line up pretty closely with the areas seeing more homes for sale today?

The overlap isn't a coincidence. It's cause and effect. 

The national average of 1.7% price growth is accurate, but it's an average of two very different stories happening at the same time – the few areas experiencing mild declines and the overwhelming majority that are still seeing prices rise.

What This Means If You’re Buying or Selling 

If you're a buyer, the market you're shopping in matters a lot right now. In places like Texas, Colorado, or Florida, you may have real negotiating power – more choices, less competition, and sellers who are more motivated to make a deal. In tighter markets like much of the Northeast, you're still likely facing a lot of competition.

If you're a seller, pricing strategy is everything. In markets where inventory has risen, overpricing is one of the fastest ways to linger on the market and eventually sell for less than you would have with the right price from day one. In markets where inventory is still low, you're in a strong spot, but getting your price right still matters if you want to attract serious buyers quickly. Either way, that's where a local real estate agent earns their keep.

Bottom Line

When it comes to prices, where you are matters more than ever right now, and a local real estate agent is the best person to help you make sense of it.

Reach out today and let's build a plan that fits our market.

That House That’s Been Sitting Could Be Your Best Shot at a Deal

 

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Open up a home search and you'll see them. Listings that have been on the market for two months. Three. Some longer.

Most buyers scroll right past them, assuming something’s wrong with the house. But that instinct could be costing you, since the longer a home sits, the more motivated the seller usually gets.

Where Some Buyers Are Finding Better Deals

If affordability has been your #1 hurdle to buying, here’s a surprisingly simple strategy that could help you finally get your foot in the door. Start with the homes that have been sitting the longest. That’s often where the best deals are.

Here’s why. Data from Realtor.com shows there’s a connection between longer time on the market and lower sales prices. Basically, the longer a house sits, the more likely it is that the seller will reduce the price (see graph below):

The blue line tracks how long homes stay on the market, while the green line tracks the share of homes getting a price reduction. As one climbs, so does the other.  

And if you focus on these homes that are just sitting and waiting, the opportunity for you is bigger than you may think right now.

Redfin data shows there’s $347 billion worth of stale listings on the market right now – more than ever before for this time of year. So, ask your agent to filter listings for you from oldest to newest. The home that fits your budget might already be there. Just further down the list than you thought.

Lingering Doesn’t Always Mean Something’s Wrong 

Let’s say you do that and something catches your eye. Still, you might be questioning why the home has been sitting in the first place. Just remember, sometimes it has nothing to do with the home itself.

According to Redfin, common causes are:

• The asking price was set too high to start

• The home didn’t show well online

• There are a lot of homes for sale in the area, so it just got buried

So, nothing that’s necessarily a dealbreaker, or even anything that’s wrong with the home itself. If there’s a real issue, a thorough inspection will surface it. And that’s information you can use to negotiate. Not a reason to assume it’s a house worth skipping over.

How To Turn a Lingering Listing into a Win

So how do you capitalize on a lingering listing? According to USA Today, you have two main levers to pull.

The first is price. Work with your agent to study what comparable homes recently sold for, then build an offer around that. Coming in below asking price is fair game when a home has been sitting.

The second is concessions. If a seller won’t budge much on price, they may still help in other ways, like covering some closing costs, repair credits, or even a mortgage rate buydown that lowers your monthly payment.

A local agent has the context to tell which homes are the real opportunities and which are skippable.

Bottom Line

A house sitting on the market isn’t always a glaring red flag. In today’s market, it may be your best opportunity yet.

For help deciding which lingering listings are actually worth a second look, let’s connect.