H
omeowners preparing to sell their properties are in for a rude awakening. The real estate market is poised for a shift, and it's not looking good for sellers. With US home listing prices at an all-time high, many homes are lingering on the market, prompting owners to slash prices and offer generous concessions. According to Redfin, the total value of homes on the market has reached $698 billion, a 20.3 percent increase from last year.

    However, this surge in inventory is causing demand to slow down. Redfin's chief economist, Daryl Fairweather, notes that there are nearly half a million more home sellers than buyers, making it necessary for prices to drop to attract enough buyers. "I think more homeowners will have to lower their prices," she said.

    Fairweather also warns that tariffs will continue to weigh on demand, predicting a 1 percent price drop by the end of the year. She believes that if tariffs remain in place, the economy could enter a recession, leading to lower interest rates and potentially more people interested in borrowing to buy a home.

    The rental market's improvement is also not helping homeowners, as it gives buyers more options. To compete, sellers must either price their homes conservatively from the start or be prepared to slash costs. Otherwise, their property will sit on the market, Fairweather warned.

    As the number of homes on the market reaches its highest level in five years, mortgage rates, high HOA fees, and economic uncertainty are scaring off buyers. However, for those who can buy, there's an opportunity for deals. Buyers can negotiate lower prices, get concessions like paid HOA fees or repairs, and even demand mortgage-rate buydowns.

    Nearly half of all sellers are now offering concessions as the market slows down to levels not seen since the Great Recession. Many are accepting below-asking offers, highlighting just how tough the market has become for sellers. As one agent noted, "People who bought in the frenzy of 2021 or 2022 are having a hard time letting go of peak prices." But after a couple of weeks with no bites, they come back to reality – and that's when the real deals happen.