The Market Shift Every Buyer & Seller Should Know
The real estate market is always evolving, and January 2025 just delivered some of the most important shifts we’ve seen in years.
🏡 Housing supply is at its highest level since 2020.
📉 Demand, however, has hit rock bottom.
📈 Mortgage rates are making buyers pause, but sellers are ready to move.
So, what does this mean for homebuyers, sellers, and investors in today’s market? Let’s dive in.
More Homes for Sale—But Why Now?
After years of low inventory, we’re finally seeing more homes hit the market. What’s causing the shift?
1️⃣ Sellers are done waiting. Many homeowners have been holding out, hoping for lower mortgage rates. But with rates hovering near 7%, they’re realizing they can’t wait forever.
2️⃣ The “Golden Handcuff” effect is fading. During the pandemic, homeowners locked in ultra-low interest rates. But life changes—new jobs, growing families, downsizing—are forcing many to sell despite higher rates.
3️⃣ Homes are sitting longer. The average home sat on the market for 56 days in January—the longest in four years. That means inventory is building up, giving buyers more choices.
How Much More Inventory Are We Talking?
According to Redfin’s January 2025 Housing Market Report:
- New listings rose 4.7% year-over-year—the highest since mid-2022.
- Total homes for sale climbed 12.9% compared to last year.
- Months of supply hit 3.6 months, showing a shift toward a more balanced market.
📢 Key Takeaway for Sellers: You’re not alone if you’re thinking about selling right now. But more competition means pricing and presentation are more important than ever.
Why Aren’t More Buyers Jumping In?
While sellers are listing, buyers are hesitating—and for good reason.
✔️ Mortgage rates hit an 8-month high. The average 30-year fixed rate was 6.96% in January, up from 6.72% in December, according to Freddie Mac.
✔️ Home prices are still rising. The median home price climbed 4.1% year-over-year to $418,581, according to Redfin—a 45% increase compared to pre-pandemic levels.
✔️ Economic uncertainty is giving buyers cold feet. Inflation, layoffs, return-to-office mandates, and mortgage rate volatility are making people think twice about making a big financial move.
Pending Sales Tell the Story
- Pending home sales dropped 4.2% in January—the largest decline since August 2023, per National Association of Realtors (NAR).
- Year-over-year, pending sales fell 6.3%.
- Cancellations surged. 14.3% of homes that went under contract fell out of escrow—the highest January rate on record, per Redfin’s data.
📢 Key Takeaway for Buyers: You have more negotiating power than we’ve seen in years. If you’re serious about buying, now is the time to find deals and secure concessions.
What This Means for Buyers & Sellers in 2025
The housing market is shifting, and strategy is everything. Whether you’re buying, selling, or investing, here’s what you need to know:
✅ For Buyers:
✔️ You have more choices. You have less competition and more supply of homes. You won’t have to compete against as many buyers anymore and have room to negotiate.
✔️ Sellers are willing to negotiate. Many sellers need to move and may offer closing cost credits, rate buy-downs, or price reductions.
✔️ Waiting might not be the best move. Mortgage rates could stay high longer than expected, and home prices are still climbing.
✅ For Sellers:
✔️ Pricing is everything. Overpriced homes will sit on the market as people will figure something is wrong with them. Buyers know values by looking at homes every day, and they can tell when a home is overpriced. So they’ll gravitate towards homes that are priced correctly or competitively.
✔️ Presentation matters. A well-staged, move-in-ready home is more appealing than ever in a market with more choices.
✔️ Flexibility is key. Be open to negotiations, whether it’s price, repairs, or closing timelines.
Final Thoughts: Is Now a Good Time to Buy or Sell?
It depends on your goals, but one thing is clear—this is NOT the same market we had in 2021 or 2022.
✅ Sellers need a strategy to stand out.
✅ Buyers have negotiating power they haven’t had in years.
✅ Investors should watch for opportunities as prices stabilize and more homes hit the market.
👉 If you’re thinking about buying or selling, let’s talk. DM me, text, or call 615-392-1186 and we’ll create a game plan that works for you.
📌 Don’t let market uncertainty keep you on the sidelines. The right strategy can help you win in today’s real estate market.