The Housing Market SHIFT Will Have A HUGE Impact On House Prices

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Is the Housing Market Crashing? Not Quite, But It Is Shifting

In early 2025, the housing market looks dramatically different than it did during the pandemic boom. Homes are sitting longer. Price cuts are more common. And for the first time since 2019, buyers are regaining some leverage. Jeb Smith put it bluntly: “The housing market hasn’t crashed, but it is shifting.” This post unpacks exactly what that means for buyers, sellers, and anyone trying to navigate a rapidly evolving real estate landscape.

Why the Market Is Cooling: It All Comes Down to Supply and Demand

Josh Lewis emphasizes a timeless truth: housing is always about supply and demand. And today, the equation is shifting nationwide. According to Realtor.com, active listings reached 1.036 million this year — the highest since 2019, and up 31% year-over-year.

Texas & Florida Lead the Surge

• Killeen, TX: Inventory up 122% since 2019
• Austin, TX: +70%
• Florida: 10 metros above pre-pandemic inventory levels

Even in high-performing metros, more homes are available today than just a year ago. And that increase in options is reshaping how buyers behave.

Sellers Are Facing a Psychological Shift

Jeb points out that the biggest hurdle isn’t just supply — it’s seller expectations. Many homeowners still have a 2021 mindset, expecting their home to sell in days, not weeks or months. But as Jeb puts it, "We’re getting back to a more normal market. Most just don’t have the context to recognize that."

Short Memories, Unrealistic Expectations

Most real estate agents and sellers only remember the last three to four years. That means they’re unprepared for the return of longer selling timelines, negotiation, and buyer caution.

• Agents panicking because listings aren’t moving
• Sellers questioning pricing after two weekends with no offers
• Buyers waiting and watching, not rushing

In Jeb's Huntington Beach market, for example, total inventory rose from just 80 homes to over 280. That’s a 300% jump — but still not a flood of inventory. Context matters.

Buyer Behavior Has Evolved

Buyers are no longer desperate. They expect more, and they're willing to wait. Jeb shares examples of buyers who, instead of pouncing, now say things like, "I'm going on vacation. If it's still there when I get back, we can talk."

The New Buyer Mindset

• Less urgency, more caution
• Preference for turnkey properties
• Increased power to negotiate repairs and credits
• Not afraid to walk away

Josh explains this shift clearly: "Affordability has pulled back able demand. People want to buy, but fewer can actually pull the trigger."

Inventory Feels High, But It’s Still Local

National headlines often miss the nuance. Yes, inventory is up — but 30% of that inventory increase is concentrated in just two states: Texas and Florida. In other markets, like parts of California, inventory is still far below pre-2019 levels.

Example: Huntington Beach

• Pre-pandemic: 80 homes on market
• 2025: ~280 homes on market
• Actual choice remains limited due to senior communities, leasehold land, and ultra-luxury skewing the numbers

Bottom line? Real estate is local. Always. And your strategy should reflect what’s happening in your zip code, not just the headlines.

Perfect Homes Still Sell — But The Rest? Not So Much

Josh uses a vivid analogy: the "HGTV Home" is like the attractive 50-year-old who checks every box. It will sell. Maybe not for a crazy premium, but it won’t linger.

Meanwhile, imperfect homes — the ones with odd layouts, outdated features, or less desirable locations — must compete harder. Price becomes their only weapon.

Sellers Must Be Strategic

• Price right from the start
• Offer rate buydowns or credits
• Be open to concessions and negotiation

Pro Tip: Your first offer is usually your best offer. Don’t chase the market downward.

Condos: Unique Challenges, Not a Collapse

Condos, especially older high-rises in Florida, are seeing cracks. Rising HOA dues, insurance shortfalls, and non-warrantable financing issues are keeping buyers away.

Important Distinction

This isn’t a systemic problem — it’s regional and property-type specific. Most buyers aren’t targeting 50-year-old, poorly insured high-rises. But these pockets do affect the national numbers.

Motivation Has Shifted Too: It’s Not About Opportunity, It’s About Need

In 2021, many sellers were moving to upgrade or capitalize on hot prices. Today’s sellers are more likely to be moving because they have to:

• Relocation for work
• Divorce
• Downsizing for retirement
• Needing liquidity for care (e.g., aging parents)

This results in a different type of inventory — not distressed, but motivated.

Builder Incentives Are a Game Changer

Builders are protecting price points while boosting affordability through their in-house lenders. Josh explains how they’ll offer $30,000+ in credits to cover rate buydowns and closing costs rather than cut list price.

Why It Matters

• Buyers get a lower rate, sometimes over 1% below market
• Builders keep comps high by not lowering prices
• Resale sellers can compete with similar strategies

Use your lender or agent to help evaluate these offers — some builder incentives look better than they are.

First-Time Buyer Advice: Buy Smart, Not Fast

• Get pre-approved before shopping
• Know your must-haves vs. wants
• Focus on comps, condition, and concessions
• Be willing to walk away

In today’s market, your biggest negotiating leverage is patience.

For Sellers: You Only Get One Chance to Be New

Josh wraps it perfectly: the longer your home sits, the harder it is to sell. Sitting becomes a red flag. Instead, compete like builders:

• Offer 2-point rate buydowns
• Cover buyer closing costs
• Keep your pricing in line with condition and comps

Final Word: Opportunity Exists, But Strategy Matters

The 2025 housing market isn’t crashing. It’s rebalancing. The winners will be those who understand the nuances, whether you’re buying or selling.

• 📊 Focus on comps, not headlines
• 📈 Focus on condition, not assumptions
• 📉 Focus on concessions, not just list price

✅ Start your journey with a trusted Realtor and lender team: theeducatedhomebuyer.com/start.