The Real Estate Market Takes a Turn

(6/2/25)  Have you been keeping an eye on the real estate market in your neck of the woods? If not, you may be surprised.

While the market fundamentals in many metros in the United States remain strong, other areas are weakening. Take a look at the statistics, from a variety of sources, and draw your own conclusions – which will vary depending on whether you’re a prospective buyer or seller.

·      Real estate consulting firm John Burns Research and Consulting reported on May 29 that regional housing markets are performing very differently right now. Areas that boomed during the pandemic – like South Florida – are seeing more homes available for sale and falling prices. Markets with too many resale homes for sale include Northern Florida (38% more homes than in 2019), Texas (37% more homes) and the Southwest (23% more homes).

·      Redfin reported on May 29 that despite the fact that mortgage payments rose in May, year over year, due to interest rates and high home-sale prices, relief is in sight for home buyers. The company reported that home-sale prices are already falling in 11 of the 50 most populous U.S. metropolitan areas, with the biggest declines in Oakland, Calif., Dallas and Jacksonville, Fla.

·      The National Association of Home Builders reported on May 16 that economic uncertainty stemming from tariffs, higher mortgage rates and rising building material costs pushed single-family home starts lower in April.

·      According to a report by Realtor.com, Americans need to earn $114,000 annually to afford a median-priced home. That’s up 70.1% from $67,000 just six years ago, driven largely by home price appreciation and higher mortgage rates.

·      On May 27, Redfin reported that pending luxury home sales fell 10%, to the lowest April level in over a decade, due to economic uncertainty.

And, in the rental market:

·      Redfin reported on May 30 that new apartments are sitting vacant for months, giving renters the power to negotiate concessions, like free rent or free parking. The company reported that less than half (49%) of newly built apartments completed in the fourth quarter of 2024 were rented within three months. This is the fifth consecutive quarter that the rental absorption rate was below 50%, a speed that continues to lag behind pre-pandemic norms. The slowdown is due to the increase in new apartment supply, with record numbers of them coming onto the market. In the fourth quarter alone, nearly 125,000 new apartments were completed, the second-highest number on record.