Market Update March 17th, 2025

The asking price per square foot for 2025 has already begun to decline after peaking in February, an unusually early trend in the housing market. Historically, asking prices tend to peak later in the year, making this early downturn a significant indicator of shifting market sentiment. The distinct downward trend suggests that sellers are losing confidence, which is understandable given the current supply and demand dynamics. With inventory continuing to grow while demand remains weak, sellers are facing a challenging environment that limits their pricing power.

In comparison, 2024 was not a strong year for sellers either, but the peak in asking prices occurred at the end of March, six weeks later than in 2025. This delayed peak provided sellers with slightly more leverage, though the market still presented difficulties. Additionally, data from other sources indicate that sellers are now offering larger concessions to buyers, and an increasing number of closings include these incentives. This shift further emphasizes the changing balance of power in negotiations, favoring buyers who are in a stronger position than in previous years.

Well-informed buyers recognize that they face little competition unless they are bidding on an exceptionally desirable property. With fewer competing buyers in the market, they can adopt a more aggressive stance during negotiations, knowing that sellers may be more willing to compromise. This is a stark contrast to the pressures faced by sellers, who must contend with growing competition from other listings. As a result, many sellers are feeling the strain and adjusting their expectations accordingly.

The combination of rising supply, tepid demand, and early price declines paints a picture of a market increasingly favoring buyers. Sellers who were hoping for a strong start to the year are instead encountering heightened uncertainty and growing pressure to make concessions. As the market evolves, both buyers and sellers must adapt to these new conditions, with buyers gaining leverage while sellers are forced to navigate a more competitive landscape.

"Keep your face always toward the sunshine, and shadows will fall behind you."
— Walt Whitman

Have a great week, everyone!