Housing Market Cools as Sellers Slash Prices
For the first time in years, the housing market is showing signs of cooling. In July, homes spent a median of 60 days on the market, the slowest pace on record for that month. Nearly 27.4% of listings saw price cuts, according to Zillow — the highest share since 2018.
This shift gives buyers something they haven’t had in a while: leverage. More inventory, longer listing times, and motivated sellers mean shoppers have room to negotiate. But with mortgage rates still elevated, the decision to buy now comes with important caveats.
Negotiation Power Returns to Buyers
“Unlike the last housing cycle downturn, these discounts are about sellers adjusting unrealistic asking prices, not a collapse in values,” explains Evan Harlow, realtor at Maui Elite Property.
Harlow recently helped a client in Phoenix buy a home for 6% below asking price — nearly impossible just two years ago. Still, he stresses that preparation is key: serious buyers should be preapproved, run the numbers, and know their total costs before making an offer.
Proceed with Caution
Price cuts don’t automatically equal affordability. A $20,000 discount can quickly be erased once property taxes, insurance, and mortgage rates are factored in.
“If you plan to stay seven to ten years, conditions are favorable,” Harlow says. “But if you’re trying to ‘time’ the market for a quick profit, this isn’t the best environment.”
Cash Buyers and Investors Have the Edge
According to Yancy Forsythe, investor and agent at Missouri Valley Homes, cash buyers are thriving in today’s market. Sellers are often more willing to negotiate with them, but even investors face limits due to holding costs associated with high-interest money.
Forsythe also highlights location as a key factor:
- In the Midwest and South, price cuts are making homes attainable again.
- On the coasts, even discounted homes remain expensive.
The takeaway? Buyers should get preapproved and know their exact budget before jumping in.
Inflation Still Pressures Prices
While listing prices are softening, inflation continues to drive up ownership costs. Jeff Lichtenstein, CEO of Echo Fine Properties, points to labor and materials: “My landscaper’s cost went from $180 to $280 a day. Roofers and builders are passing on similar increases.”
These rising expenses mean buyers may not feel the full relief of lower listing prices.
Inventory and Seasonality Matter
Inventory has finally rebounded after years of being too low. Lichtenstein says the market slowdown that began in May 2022 gave supply a chance to catch up — and buyers are now reaping the benefits.
He also reminds buyers to watch for seasonal trends. For instance, in South Florida the market is strongest in February, while rental demand dips in August.
Market Signals: Buffett Bets on Housing
Adding weight to the case for buyers, Warren Buffett’s Berkshire Hathaway recently made significant investments in homebuilders. For many, this is a strong signal that housing fundamentals remain solid despite short-term uncertainty.
Could This Be the Bottom?
Lichtenstein calls the current environment a “perfect storm for buyers” — with motivated sellers, rising inventory, and room to negotiate.
“If you’ve done the math and are prepared for the costs, now could be the moment to act,” he says. “Markets this friendly to buyers don’t come around often.”