The last 5 years since Covid began (FIVE years?!?!) have been a real estate rollercoaster. The first couple of years were a wild ride, but in 2023 and 2024, we sort of just… stalled. Now, we’re starting to get moving again, but we don’t know exactly what’s ahead. What we do know is that this exact moment in time offers homebuyers some relief from a very tough seller’s market over the last several years and opportunities to create massive value if they play their cards right. Let’s dive into five strategies that are helping buyers win RIGHT NOW:
Ride the Wave of Rising Inventory
After years of slim pickings for homebuyers, we’re seeing more homes hit the market as inventory rises nationwide. This is due in part to persistently high interest rates that have kept many buyers on the sidelines – this restricted demand has allowed inventory to build up. Typically, this dynamic would cause home prices to begin dipping, but because inventory is still low by pre-pandemic standards, home prices are still creeping up, albeit slowly. Now, without the burdens of insane bidding wars and extremely constrained options, homebuyers finally have some breathing room to find the right property and maybe even a slight upper hand in negotiations.
Don’t Wait for Rates
There’s not a buyer out there right now who isn’t concerned that rates will drop in the near future and worry they’ll wish they had waited to buy. But here’s the thing… In all likelihood, when rates do drop, it’s going to cause a surge of homebuying activity that is going to push prices up even further. If that happens, you’ll be kicking yourself for waiting. Instead of playing the waiting game, consider these smart moves:
- Before you lock your rate, ask your lender about a float-down option in case rates fall while you’re under contract on your home.
- Weigh the cost of a rate buy-down – if you can save more in the long run than you’ll spend upfront, it could be worth coming up with the extra cash.
- Take a look at Adjustable-Rate Mortgages (ARMs). They have a bad reputation, but if rates are lower during their adjustment period (which is likely), you’ll benefit from the risk.
- Keep an eye on rates after you close on your new house. When they dip, take advantage of the opportunity to refinance!
Leverage Your Buyer Power
Listen, this is not the hottest buyer’s market there’s ever been – far from it – but buyers do have some newfound leverage over sellers in the current market, with rising inventory and stagnant demand. It’s time to flex those negotiation muscles and act like you’ve been in the endzone. Here’s how:
- Have your agent do some digging before you make your offer. You want to structure your offer to be appealing, but you don’t have to give it all away upfront (like you would have in 2021).
- Don’t sleep on requesting concessions. You can request credits from the seller for things like compensating your buyer’s agent, necessary repairs, closing costs, and rate buydowns. Don’t go crazy, but definitely try to negotiate concessions from the seller where it makes sense. (Pro tip: These concessions often don’t show up in final sale prices, so the market looks stronger than it really is. Use this insider knowledge to your advantage!)
- Come to the table with the attitude of creating a win-win scenario for yourself and the seller. In most cases, you catch more flies with honey than vinegar.
Hunt for Appreciation Potential
If you want to really get ahead of the game, don’t just buy a house – invest in your future. Look for properties with serious upside:
- Seek out areas that are experiencing job growth and population increases, where homes are still affordable than in neighboring areas; these are factors that will cause property values to spike in the near future.
- Walkable neighborhoods with quality schools and amenities are trumping traditional hotspots – explore these “new prime” locations, as they appreciate faster than everyone’s favorite neighborhood.
- Evaluate properties through the lens of potential for future adaptations. Adding an ADU can yield some serious return on investment and provide passive income. Other upgrades, like energy efficiency and smart features, can also offer an upside in value.
Bonus: Builders are sitting on spec inventory. Use this to score a deal on a brand-new home with all the bells and whistles and maybe even some perks on concessions. New homes can appreciate faster than resale properties.
Don’t Fear a Crash – Plan for It
Realistically, there will be a “crash” at some point. Recessions are inevitable. Personally, I think we are probably looking at one sooner rather than later. I hope I’m wrong, but if I’m not, there’s a silver lining: I don’t think the real estate market is going to suffer much.There are several strong arguments to support that claim that I won’t get into here.
But let’s say that somehow, all of these safeguards fail, and the real estate market breaks. Here’s my advice: If you fall on hard times, do whatever you can to hang on to your primary residence. When the recovery is complete, you will be in a better position than ever. In the event of an uncontrolled crash that impacts real estate, policymakers will be highly incentivized to stabilize the market and provide assistance to homeowners to prevent defaults. Use these to your full advantage.
Remember that real estate is a long game. Even if we hit a bump, values always bounce back stronger. It took 6 years for the median home price to recover to its peak in 2007 after it’s trough in 2009. Today, the median home value is nearly double what it was in 2007. Even if those homeowners had to hang on by the skin of their teeth, they have some serious wealth-building to show for it.
I’m telling you now, 2025 will not go down in the history books as an exciting year in real estate as rates, prices, and buyer sentiment all stagnate. But while it may be counterintuitive, I think these conditions provide the perfect opportunity for those willing to buck the trend. I don’t know who said this, but I think it’s very wise: “In the quiet, find your power; in the stillness, make your move.” Get out there and make the most of the moment. My money says you’ll be glad you did by this time next year.
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