Real Estate News
With sellers far outnumbering buyers, conditions now favor home shoppers, according to a new Redfin report. Does that mean home prices will start falling?
Key points:
- There are nearly 34% more sellers than buyers, the biggest imbalance since at least 2013, Redfin reported.
- Florida has the most metros highly favorable for buyers, but agent surveys and data from other regions point to a growing national trend.
- If the market remains on this path, home prices could decline by the end of the year.
The market shifts seen in some regions of the country appear to have gone national. For the first time since the pandemic, it’s a buyers market, according to new data from Redfin.
In April, sellers outnumbered buyers by nearly 34% — the highest percentage in more than a decade, Redfin noted in a May 29 report.
The conclusion? Buyers now have the advantage. While the ratio of sellers to buyers has been expanding since late 2023, the pace has quickened. Last year at this time, there were just 6.5% more sellers; two years ago, there were more buyers than sellers.
Where markets have flipped
Some regions have already seen market changes. A Bright MLS survey in April found that conditions had improved significantly for buyers in the Mid-Atlantic region, and in several Florida metros, sellers have been reducing prices to entice buyers. Of the 10 strongest buyers markets in Redfin’s report, six were in Florida. Miami, West Palm Beach and Fort Lauderdale claimed the top three spots, with sellers outnumbering buyers by nearly 200%.
Agents have noticed the shift too: 35% of agents in Real’s March sentiment survey said their market favored buyers, versus 32% who reported it was still a sellers market.
“The balance of power in the U.S. housing market has shifted toward buyers, but a lot of sellers have yet to see or accept the writing on the wall. Many are still holding out hope that their home is the exception and will fetch top dollar,” Redfin Senior Economist Asad Khan said in the new report.
Notably, the condo market is even more biased toward buyers. Condo sellers outnumber buyers by 83.5%, with Florida again showing the greatest imbalance, due in part to rising HOA fees and insurance costs. A condo mortgage “blacklist” may also be contributing to the slowdown.
Why the change?
Home prices have risen steeply over the past several years, even as mortgage rates have climbed — yet sellers continued to have the advantage while inventory remained tight.
But a few factors may be contributing to the current shift, according to Redfin’s analysis. High home prices continue to be a deterrent for buyers, especially during this time of economic uncertainty, and increasing supply means those who are ready to buy can be more selective.
And on the sell side, listings have risen in part because the mortgage rate lock-in effect appears to be waning. Life events may finally be forcing moves, and sellers have likely adapted to the reality of higher interest rates, Redfin suggested.
Does that mean prices will finally drop?
Looking at historical trends, home prices should cool when the market shifts. Redfin noted that this happened in late 2018, when sellers outnumbered buyers for the first time in three years. A few months later, home price growth fell significantly.
But will prices actually fall nationally? The pace of growth has slowed this year, with prices up just 1.6% year-over-year, according to Redfin, and home prices are declining in more areas.
While some markets are still going strong for sellers, particularly in the Northeast, Redfin economists predict that median home prices in the U.S. will dip by the end of 2025. Not by much — just 1% — but it would mark a major change in a trend that’s held steady for well over a decade.