In the housing market, sellers have a lot of leverage right now.
With home prices up 28% from 2019, mortgage rates still hovering above 6% and steady competition over a small number of homes for sale, buyers have a lot working against them.
This is known as a seller’s market, where sellers have a distinct advantage. However, it hasn’t always been this way, and it won't be forever. The dynamic in real estate always shifts back and forth between a seller’s market and a buyer’s market.
We’ve been in a seller’s market for more than a few years now, and many buyers are waiting for the tide to turn. Will home prices decrease and the housing supply increase? Will competition ease? Will it flip to a buyer’s market in 2025?
Real estate experts don’t expect things to change much over the next several months. While conditions for buyers might improve slightly next year as mortgage rates decline, sellers will likely retain the advantage.
What is a buyer's vs. seller's market?
In a buyer’s market, people looking to buy homes have more power and leverage. In a seller’s market, the opposite is true, where sellers have more power in the transaction.
In a buyer’s market, there are usually more homes for sale than there are buyers, meaning sellers will have a harder time finding a buyer because there’s an oversaturation of inventory, according to Adie Kriegstein, a licensed real estate agent at Compass.
Because there’s lower demand for a larger supply, prices tend to be lower in a buyer’s market, Kriegstein said. It also gives buyers more negotiating power beyond price: They can ask sellers to make repairs or reduce closing fees, for example. “All of that is more easily on the table and negotiable,” Kriegstein said.
In a seller’s market, most of these dynamics are flipped. There’s a small inventory of homes and a high demand from buyers. Due to the limited supply, sellers are able to charge more for their homes.
Plus, sellers have the power when it comes to negotiation, Kriegstein said. This means buyers will likely have to make concessions to compete with other offers, and a seller gets to choose the most attractive offer.
| Buyer’s market | Seller’s market | |
| Interest rates 📈 | Typically on the lower side, which gives buyers more purchasing power. | Typically on the higher side, which decreases inventory, because homeowners don’t want to sell and give up low rates. |
| Time on market ⏰ | Longer: Homes may take months to sell in a buyer’s market because there is lower demand. | Shorter: Higher competition over a smaller number of homes means homes sell in a matter of days or weeks. |
| Home prices 💰 | Lower: Because sellers are competing for a small pool of buyers, they lower prices to make their listing more attractive. | Higher: Limited inventory allows sellers to charge more for their homes because there’s more demand. |
| Inventory 🏠 | Very high: A buyer’s market happens when there are more homes for sale than there are buyers. | Very low: A seller’s market occurs when there is more demand than supply of available homes. |
When was the last time we were in a buyer's market?
We’ve been in a seller’s market for a long time.
The last time we were in a strong buyer’s market was shortly after the country recovered from the 2008 financial crisis, and the housing market picked up again in the early 2010s, according to Leah Robinson-Christian, an associate real estate broker at Engel & Völkers Atlanta.
During that period, homes were taking longer to sell, which meant buyers had the power to negotiate a lower price and better terms on a home purchase, Robinson-Christian said.
But then home prices began to climb again in 2012, and by the middle of the decade, inventory also began a long downward slide. All those components contributed to the seller’s market we’ve been in now for over a decade.
Do experts anticipate a buyer's market in 2025?
Each local housing market is a bit different. However, experts generally don’t expect a national buyer’s market in 2025.
Still, both Kriegstein and Robinson-Christian see some positive signs for buyers in 2025: Mortgage interest rates are slowly coming down, homebuilding has recovered somewhat from its pandemic slump (therefore increasing inventory) and price growth is starting to cool off.
While it could be slightly easier for buyers to afford a home next year, experts say it wouldn't completely shift the balance of power to their side.
In some areas of the US right now, sellers don’t have quite as much power. According to a recent analysis by Realtor.com, some regions are currently quite friendly for buyers. For example, home inventory is rising and prices are stabilizing or dropping in certain markets in Texas and Florida.
Advice for buyers in a seller's market
As long as we’re still in a seller’s market, there are ways that buyers can make the best of it. Here’s some expert advice:
✔️ Find a trusted real estate agent. This can help you compete against other buyers and will give you access to the expertise you need to succeed in your local market. “Experience really, really matters in these situations,” said Kriegstein.
✔️ Be patient. Buying a home is an emotional decision, but Kriegstein urges buyers to slow down and make sure they’re choosing a home that works for them. Don’t compromise just because there are few options available.
✔️ Stay within your budget. You may need to increase your offer to compete with other buyers but don’t go beyond what you can comfortably afford.
✔️ Don’t give away all of your power. It might be tempting to waive a home inspection or other items to make your purchase offer more attractive, but that’s not always the right move. Consult your real estate agent to decide what you should (and shouldn’t) be willing to negotiate.
