It’s been a while since I’ve shared my thoughts on the market, mostly thanks to a busy seller season and the recent NAR changes that just kicked in. We've been retooling our business to stay ahead, and I want to cut through the noise and get straight to the point. What’s really happening in the housing market right now? The latest data, and it feels like it as well, shows the market is softening—some might call it a shift—and it’s giving buyers more leverage. But it’s not as simple as labeling it a buyer’s or seller’s market; there’s more to it than that.
Note: All links to the data referenced in this post can be found at the end.
Prices Are Up, But Sales Are Down
Home prices are up 4% over the past year—not bad, but not all markets are equal. It’s not a seller’s market for everyone. The number of homes sold is down about 12% from last year, meaning fewer people are willing to pay these prices, and it’s not for lack of trying on the sellers’ part. Inventory has risen by nearly 15%, giving buyers more options and, in many cases, better deals.
Mortgage Rates Are Stable
Mortgage rates have dropped significantly over the last several months, but the real story isn’t about the 30-year fixed rates in the 6% range. The biggest savings have been with Adjustable Rate Mortgages (ARMs), now available in the mid-5% range. Previously, ARMs were priced nearly the same as 30-year fixed rates because lenders expected rates to stay high and wanted to manage their risk. Now ARMs have become more competitive and are being chosen more frequently.
There are two major misconceptions: First, that when rates drop, the market immediately heats up. However, data shows that urgency tends to increase when rates start to rise, not when they fall. Second, many believe that a rate cut at the next Fed meeting will immediately lower mortgage rates, but the recent drop in rates has already factored in this anticipated cut. Buyers don’t mind the rates; they’re waiting for better deals.
Demand Is Softening
About 20% of sellers had to cut their prices last month—whether they started too high or the market is cooling down is up for debate. Entry-level homes, which used to move fast, are now sitting longer as demand slows. Even the luxury market isn’t immune—everything’s cooled off compared to last year.
This past June, 15% of homes under contract fell through—the highest rate on record. I unfortunately dealt with a couple myself.
What Does This Mean for You?
For buyers, this softening market could mean more negotiating power. For sellers, it might be time to rethink pricing strategies or be more flexible with offers. The market isn’t crashing, but it’s definitely shifting.
Fall Season: A Prime Time to Sell in Northern Virginia
The fall season starts in just two weeks, and historically, it’s the second-best time of year to sell a home in Northern Virginia. Once the school year is underway, many buyers re-enter the market, and the end of the fiscal year for Federal Contractors and the Federal Government often leads to a surge in job-related moves. The season is typically robust but short. I’ll keep an eye on the market and report back—it’ll be interesting to see if things turn around.
NAR Antitrust Changes
As of this weekend, significant changes have taken effect that will undoubtedly have lasting impacts on our industry. Shifts in commission structures, new regulations, and ongoing developments with the Department of Justice are reshaping the landscape. It’s crucial to stay informed and critical, rather than blindly accepting industry narratives. These changes will influence how homes are bought and sold and could fundamentally alter our relationships with clients. Industry leaders are downplaying what is truly a game-changer which bodes well for me ;)
As always, I’m here to help. Don’t hesitate to reach out with any questions or if you’d like to discuss how these changes might affect you.
Data References:
https://www.brightmls.com/article/july-2024-market-report
https://www.redfin.com/news/home-purchase-cancellations-june-2024/
https://www.redfin.com/news/housing-market-tracker-february-2024/
https://www.glasshousere.com/real-estate-blog/what-the-nar-antitrust-settlement-means-for-our-clients
https://www.glasshousere.com/real-estate-blog/what-the-new-nar-rules-mean-for-buyers
