Opportunity arises for negotiating price decreases?
In the U.S., the housing market is experiencing a significant shift, particularly in formerly hot markets like Texas and Florida. This transformation, characterised by an oversupply of homes, softer pricing, and more negotiation leverage for buyers, is leading to a buyer-friendly market[1][4][5].
Key points about this trend:
- Cooling sales and prices: Home sales are expected to decline in 2025 to levels not seen since the mid-1990s due to elevated mortgage rates, which remain high, averaging around 6.7% in 2025[1][3]. New home sales and overall homebuyer demand are softening across many markets, including Texas and Florida[3][4].
- Rising inventory and cancellations: Oversupply and high cancellation rates on contracts—around 15% nationally and higher in Sun Belt markets like Florida and Texas—are shifting power toward buyers. This creates more choice and less urgency on the buyer side[4].
- Improving affordability: With high mortgage rates and prices cooling, buyers no longer have to rush offers or waive inspections as they did during the pandemic housing boom. This creates opportunities to negotiate better deals, especially in markets with a surplus of listings[2].
For homebuyers looking to leverage this market, understanding local conditions is crucial. In markets where supply is high and buyer demand is softening, buyers have more room to ask for discounts or concessions[2]. Taking advantage of the increased supply means being more selective and patient, using competing listings as leverage to push for better terms.
Asking for concessions is another key strategy. Since sellers are more concerned about holding time and cancellations, buyers can negotiate on price, inspection contingencies, repair credits, or closing costs. Monitoring mortgage rates is also important, as acting strategically when rates are stable but before they drop further might yield better negotiation outcomes[2][5].
High cancellation rates mean some sellers may be more willing to negotiate rather than risk lost sales. The length of time a property has been on the market can be a crucial indicator that a seller might be ready to bargain. Reappearance of a property in listings after disappearing could indicate a motivated seller. A month on the market is around when a seller may start to panic due to upcoming mortgage payments. If a seller purchased their property in 2023 when mortgage rates were at 8 percent, they might be eager to sell[6].
In summary, in formerly hot markets like Texas and Florida, the housing market has cooled with rising inventory and softer prices, giving buyers more power to negotiate. Homebuyers should focus on local market data, leverage surplus inventory, be patient, and negotiate aggressively on price and terms to secure better deals in 2025[2][4][5].
[1] National Association of Realtors [2] Zillow [3] Freddie Mac [4] Redfin [5] Bankrate [6] Case-Shiller Index
- In light of the cooling housing market, particularly in Texas and Florida, individuals who are planning to invest in real estate may find it beneficial to focus on personal finance strategies, such as monitoring mortgage rates and asking for concessions, as these bargaining tactics can help secure better deals.
- For those interested in financing their home purchase in the coming years, understanding the current shift in the housing market, including the growing inventory, softer pricing, and increased buyer power, can provide valuable insights when choosing a location for home buying, as it presents opportunities to negotiate more favorable terms and find better deals in formerly hot markets.
