Homebuyers

A Tale of Two Markets: What Buyers and Sellers Need to Know This Spring

Home shoppers entering the market might find themselves in a head-scratching situation this spring. In one neighborhood, listings may vanish in a flash—often above asking price.

Just a few miles over? Crickets.

Recent economic uncertainty is also likely to affect the housing market, leading to some surprises.

“The current real estate market is definitely one of confliction,” said Cara Ameer, a real estate agent with Coldwell Banker who operates in California and Florida. “You may have homes that have multiple offers and others that are sitting. A lot of this depends on what type of home it is, where it is, and what it has or does not have.”

Whether you’re buying or selling this season, success may come down to reading your local market—and adjusting your strategy accordingly.

More homes on the market

Much of the see-sawing in the housing market comes from a spike in housing stock.

The number of homes for sale shot up 28.5% in March compared to the same time last year, according to the latest data from Realtor.com’s March housing report. That’s the 17th month in a row of year-over-year growth in the number of homes on the market.

New home listings also jumped by 10.2%—marking the busiest March in three years.

An uptick in listings mean some buyers have more room to negotiate and may not need to rush into an offer unless their local market is heating up. Instead, they can tour a variety of homes and take time to compare them.

Home shoppers looking for an edge can get pre-approved early and lock in their rate if they can. They should also run the numbers—not just on the home price but also on the monthly payment, taxes, and insurance.

Price cuts are back

Some sellers hoping for a bidding war over their home may be in for a surprise.

The national median list price held firm at $424,900 in March, according to Realtor.com, which is flat year-over-year. In other words, there’s no surge, no crash, just a market treading water.

However, nationally, nearly one in five homes, 17.5%, saw a price reduction in March, the highest level for that month since at least 2016. That may signal sellers are feeling the pressure of increased housing stock and overall competition.

Volatility in the stock market may lead to additional price cuts in certain markets. Buyers who were planning to take money out of their investments to use for to purchase homes may have less money to spend.

Translation: Sellers may not be in the driver’s seat anymore. But there is a way to make your home stand out.

“Make your home move-in ready,” said Samantha Sousa, a real estate broker in Visalia, Calif. “Add fresh paint, curb appeal, and get your real estate agent to write a thorough listing description.”

Where the market’s still hot

Not every market is cooling its heels, and some metros are downright sizzling.

Only 7% of listings in New York City saw price cuts in March, according to Realtor.com. In Hartford, Connecticut, the situation is even tighter, with 5.5% of the listings seeing price reductions.

These markets are seeing the flip side of the housing market coin because they have in-demand job markets and tighter housing stock. There also isn’t as much new construction in these areas due to a lack of land to build on.

A pent-up desire from buyers after years of waiting on the sidelines may also be fueling these markets.

It’s not unusual to see bidding wars, offers above list price, and quick closings in hot areas.

Despite a fast-moving market, sellers should resist the temptation to list their homes well above other homes in the neighborhood. Especially at a time of economic uncertainty, a well-priced home will draw more buyers and could spark a bidding war. Meanwhile, a too-high list price may result in few, if any, offers.

“There’s a saying the home may be priced right but not priced right for this market,” said Ameer. “You have to work with the pricing to find the sweet spot that will motivate buyers to act. That is usually lower than what a seller expected.”

Where the market’s cooling down

On the flip side, some once-scorching markets are now firmly in the “cooling” category.

In Phoenix, Ariz., 32% of homes saw a price reduction in March, according to Realtor.com. Austin, Texas, wasn’t far behind at 22%. These metros that saw breakneck price gains in the COVID-19 pandemic years are now catching their breath.

Local job market slowdowns, buyers hitting the tops of their budgets and beyond, and an influx of listings play a role in the sluggish pace. These are also areas where there often tends to be more new construction.

In some places, buyers are firmly back in control, with more homes to choose from translating to leverage at the negotiating table.

“Buyers may be able to submit offers lower than asking for homes that have been sitting,” said Sousa. “They have more control over the market than in previous years, so they can write an offer that makes sense for them. This spring, we should see an influx of listings, so be patient and find a home that works for you rather than rushing.”

How sellers can stay competitive

Whether you’re in a hot ZIP Code or a cooler corner of the U.S., anyone looking to put a home on the market this spring may need to adapt.

In softer markets, it’s about patience, flexibility, and presentation.

For example, sellers are not just turning to price reductions. Concessions are also making a comeback—think sellers helping with closing costs, adding home warranties, or even allowances for cosmetic updates.

Sellers can talk to their agent about what’s motivating buyers in your area.

For homeowners in hotter metros, the strategy may be simpler: Price it right and prepare for a fast sale.

“The price needs to be close to appraised value, so an accurate neighborhood sales evaluation is crucial,” said Sousa.