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Homebuyers Gain Leverage Over Sellers
Bidding wars over houses are fading, and buyers are gaining more leverage over sellers for the first time in years. More sellers are lowering prices or offering incentives to close deals in today’s less competitive real estate market. According to real estate brokerage firm Redfin, the average home now sells approximately two percent below the listing price. The shift is largely due to an increase in available housing.
In January, new real estate listings rose nearly five percent compared to 2024, with available listings reaching a six-year high. The number of homebuyers, however, has dropped to the lowest rates since 1995 for the second year in a row, according to the National Association of Realtors.
Additionally, sharply increased home prices and high mortgage rates are causing many prospective buyers to hold off on making offers or closing on a sale. Buyers are further hesitating due to rising costs for insurance, property taxes, and HOA fees.
Available homes spent nearly two months on the market in January, the longest since early 2020. The lag is prompting more sellers to entice buyers by accepting offers below asking price on homes needing repairs or adding personal items to the deal, such as pianos or patio furniture.
In Florida, markets in Miami, Fort Lauderdale, and Naples are becoming increasingly buyer-friendly. Rising home prices and insurance costs have encouraged new construction, increasing the available inventory by 30 percent and giving buyers who once had to submit offers within 24 hours more time to negotiate. Homes requiring flood insurance are often sold at a discount.
Despite market shifts, competition for move-in-ready homes in desirable school districts remains, and competition with little to no negotiating power remains. In colder markets such as New York, Massachusetts, and Michigan, sellers have more leverage as fewer homes are listed during cold weather. One move-in-ready four-bedroom home in New Jersey recently sold for $300,000 over the asking price. However, homes requiring renovations are seeing less demand, as buyers are hesitant to invest in costly remodels in addition to high mortgage rates, making “fixer-uppers” harder to sell.
While sellers in most markets are adjusting expectations, those who price homes competitively and offer incentives are more likely to close deals.
Herold Law, P.A. is a full-service law firm ready to help with your insurance needs. To learn more or schedule an initial consultation, call 908-679-5011 or contact us online. Located in Warren, New Jersey, we serve clients in Somerville, Morristown, and across New Jersey.
