The Housing Market Just Flipped- Here's What No One's Saying

The housing market flipped in the spring of 2025, and I felt most real estate agents were not talking about it. Here is what I was seeing from my desk in Northern California in late June 2025.

The CEO of Redfin said in June that home prices were coming down, and Zillow said it expected home prices to fall by 1.4% that year, which would be the first decline in home values in years. That has a lot of people on edge. What I was seeing was a home seller who thinks it is 2021 and can get top dollar, and a home buyer who has started to think it is 2009 and the market is crashing. Neither is true.

If you are selling, you are going to compete with more inventory. When values are climbing fast, you can often list above the comparables. In a flat market, some going down, the sellers who are actually getting their homes sold are pricing at or below the comps in their direct area. I know that is not what anyone wants to hear. Days on market had gone up to about 38 days nationally, and some of the biggest national builders were offering some of the craziest incentives I had seen to get buyers. But to call it a crash, we would need to see a 20% drop in value or more, and that does not look like what will happen. Inventory is still well below where a normal market would be. It was up between 10% and 60% depending on the state. In California it was up but not nearly as much as Florida, where in some markets it was up 50% or more. Those are the markets where buyers are getting the best deals.

On rates, the Fed said in June it would not lower rates, but it left room for a couple of adjustments later in the year. Mortgage rates follow inflation, and we were seeing signs of a weakening economy in GDP, jobless claims and unemployment. Most economists predicted mortgage rates would come down by the end of the year. Fannie Mae said the 30-year fixed would be 6.1% by year end. When I recorded, rates were roughly 7%, so that would be almost a 1% drop, which would be a huge impact on the average buyer.

My advice to sellers is to hire great representation. Not all listing agents are created equal. You want someone who will market your home well and tell you the truth about price. The number one reason homes do not sell is that they are overpriced. The other reasons are poor marketing or something wrong with the property.

For buyers, this was one of the most exciting times I had seen in years. Sellers who have been on the market for 60 days or more are willing to negotiate. They are paying closing costs and temporary rate buydowns and taking lower prices, especially if they are motivated to move. If I were a buyer I would negotiate aggressively. And you finally do not have to be in a rush. For five years, buyers feared another offer would come in behind them. That still happens, but far less, so take your time to learn the area and negotiate.

This is what I saw from my desk, and I try not to give you anything false. If you want to know what your pre-approval could do in a negotiation, start with first-time buyer options or get your rate. MortgageOne is now licensed in 49 states.