Homes are selling at a slower pace than they have in the last five years—and that’s a good thing for anyone looking to buy a house right now.
Realtor.com’s September Housing Market Report found that homes spend an average of 55 days on the market, which is seven more days than this time last year and two more days than last month.
In cities like Austin, TX, Jacksonville, FL, and New Orleans, LA, homes are spending upward of 70 days on the market.
What a slower housing market means for buyers
Up until recently, buyers felt rushed to close the deal lest they get beaten by the competition.
“Up until the last few months, buyers had to compete by relinquishing home inspections, more cash, and of course, higher bids,” says Denise Supplee, a Realtor with Long and Foster in Doylestown, PA.
Now, however, she’s observing a bit of a shift.
“Even though I am still seeing agents using tactics to gain excitement with a possible bidding war, I am not seeing too many in the last month or so,” she says. “I personally believe that we are entering a buyer’s market. This works two-fold for the buyer: one, lower mortgage payments; two, negotiation possibilities will increase.”
What can you negotiate? Well, just about everything from cleaning and repairs to closing costs. (That said, to successfully negotiate, you should really understand what’s motivating the seller and what their needs are.)
“I believe we will see a comeback, at least temporarily, of the use of home inspections, less cash offered, and lower bids,” Supplee says.
Noelle Tassey, of real estate platform Redy, says buyers can now afford to be a bit more picky.
“Buyers have more time to consider the property they’re buying, and we’re seeing that smart buyers are often taking their time to find properties that are priced below comps and [are] making more thoughtful offers that suit their circumstances,” she says.
Buyers should focus on the long-term value of their potential home rather than rushing into an agreement, Tassey advises.
“Negotiating is key in a market like this, and if you aren’t getting the deal done on the terms you’re looking for, you can always walk away—there will be more opportunities,” she says.
Make smart moves soon
Now that the frenzy appears to be dying down, prospective buyers can take a minute to really think about what they want in a property.
That said, don’t wait too long. And if you’re thinking about dipping a toe back into the market, it’s helpful to have a mortgage pre-approval letter.
“Many are waiting for interest rates to drop,” says Cara Ameer, a Realtor with Coldwell Banker who operates in both California and Florida.
But Ameer says it’s better to jump in now rather than wait until the market is flooded with competition—and prices are driven higher (which would negate any savings from the lower mortgage rate).
Don’t be afraid to check out properties that have been on the market for a while, says Nikki Beauchamp, an associate broker with Sotheby’s International Realty in New York, NY.
Even in the wilds of New York City real estate, there have been signs of normalization, Beauchamp says.
“If the property meets your criteria, you may have more flexibility than you realize if you craft a compelling offer,” she notes.
Plus, the longer a home is on the market, the more leverage you may have.
“In most cases, properties are sitting longer, and buyers can take advantage by offering less and asking the sellers for a credit in order to buy down the rate,” says David H. Michan, a real estate agent and property manager with Terra Equity Management in San Diego. “We just closed on a property where we offered a bit over $20,000 off asking price and asked for $15,000 towards closing costs. The sellers accepted, and we ended up buying down the rate to 5.5%.”
Ron Meyers, of Ron Buys Florida Homes in Wellington, FL, says he’s seeing buyers take more time to really think over their purchases than during the COVID-19 pandemic.
“There’s less of a rush, and buyers are being more strategic about their offers. It’s a great time to focus on getting a solid deal without the fear of being outbid within hours of a home being listed,” says Meyers. “So, homes that are priced well and in good condition are still moving. Buyers should be ready to negotiate and be flexible when a property is priced aggressively for the market. Being prepared can make all the difference right now.”
