Approaching mid-year 2025, we've experienced a softening market in the Washington, DC suburbs in that even well priced homes are staying on the market without contract offers for 60-90 days or longer. IT seems that many sellers have latched on to prices that were paid when the buyers could use 2-4% mortgage money with much lower cost for each $ 100,000 borrowerd. It's now about $600-$700 per $ 100,000 borrowed in terms of monthly payment and this has made it more difficult both to qualify but also to have a payment that buyers are comfortable undertaking. This has turned it into a buyer's market in most neighborhoods and though many buyers and agents are not used to making offers 5% or more below the asking price, in many cases the lower offers are the only offers the sellers are getting in a normal 90 day listing term. Of course, the most sought after neighborhoods, whether the main attraction is school quality or specific amenities, demand remains strong which allows more sellers to obtain their desired asking price. What comes next is not clear but one thing is clear -- mortgage rates between 6-8%, which historically were quite good during the 1980's - 2000's are here to stay, and the likelihood of 2-4% mortgages are a thing of the past. In a long term sense, this means home prices are stabilized and will only rise with general inflation or factors unique to specific areas where employment or other factors attract people to live. I suggest running data on actual sales -- to see prices paid per square foot - in the area where you plan to buy or sell and to watch not just the price being paid but the volume of sales. If the market is absorbing homes listed within 30-60 days near the asking prices, then it's less likely that a buyer will be able to offer 5-10% asking price, but if most homes are on the market for 60-90 days or longer, and closed prices appear to be below the asking price, then bargains may be had to an astute buyer and sellers should be ready to bargain or include incentives such as closing cost allowances, generous buyer agency commission and a budget for improvements to older homes. Stay tuned for more market information and regardless of where you are in the USA, let the market date from recent sales dictate your strategy whether you are buying or selling a home.
