Homes Are Taking Longer to Sell: Why That Could Create Opportunities for Homebuyers

For the past several years, one of the biggest frustrations for homebuyers has been the speed of the housing market.

A desirable home could hit the market on a Thursday, have a packed weekend of showings, receive multiple offers, and be under contract by Monday. Buyers often felt pressured to make quick decisions, limit contingencies, increase their offers, or compete against several other people for the same property.

That kind of housing market can be exhausting—especially for first-time homebuyers trying to make one of the largest financial decisions of their lives.

But the market has been changing.

Recent housing data shows that homes are spending more time on the market than they were a year ago. In July, the typical home took a median of 25 days to go under contract, approximately five days longer than during the same period last year.

Five extra days may not sound significant, but in real estate it can represent a meaningful shift in the balance between buyers and sellers.

For buyers in New Jersey, Pennsylvania, Delaware and Florida, a slower housing market could mean something we haven't seen consistently in several years:

More time to think, more homes to consider, and potentially more room to negotiate.

The Housing Market Isn't Moving as Quickly as It Once Was

Anyone who tried to purchase a home during the most competitive years of the recent housing market probably remembers what it felt like.

Inventory was extremely limited.

New listings attracted attention almost immediately.

Open houses could be packed.

Multiple offers were common.

And buyers frequently had to make decisions very quickly.

Some buyers would tour a property and feel like they needed to decide almost immediately whether to submit an offer.

That environment gave sellers considerable leverage.

When several qualified buyers wanted the same house, sellers didn't necessarily need to negotiate much. If one buyer wasn't comfortable with the terms, another buyer might be waiting behind them.

Today's market looks different in many areas.

Homes are generally taking longer to go under contract, giving buyers additional time to evaluate their options.

That doesn't mean every house is sitting on the market.

A desirable home that's properly priced and located in an area with limited inventory can still sell extremely quickly.

Real estate is always local.

But nationally, the trend toward longer selling times suggests that buyers may have more breathing room than they did previously.

What Does 25 Days on the Market Actually Mean?

When housing reports say a home took a median of 25 days to go under contract, they're measuring the period between when the property was listed and when the seller accepted an offer.

A median of 25 days means half of the homes included in the data went under contract faster and half took longer.

That's important because buyers shouldn't interpret the number as meaning they automatically have 25 days to decide whether they want a particular home.

Some properties may still receive an acceptable offer within days.

Others could remain available for weeks or months.

What the broader trend tells us is that the intense urgency that characterized much of the housing market over the past several years has eased.

And that's potentially good news for buyers.

More Time Can Mean Better Decisions

Buying a home shouldn't feel like buying something during a flash sale.

It's a major financial commitment.

When the housing market is moving incredibly quickly, buyers can feel pressured to make decisions before they've had enough time to evaluate the property, neighborhood and financial implications.

A slower market can give buyers more opportunity to ask important questions.

How old is the roof?

How old is the HVAC system?

What are the property taxes?

How much will homeowners insurance cost?

Is flood insurance required?

Are there HOA or condominium fees?

What repairs might the property need?

What will the complete estimated mortgage payment be?

Does the home actually fit the buyer's needs?

Those questions become easier to investigate when buyers aren't constantly worried that another offer will arrive within the next hour.

Fewer Bidding Wars Can Change the Buying Experience

One of the biggest challenges in a highly competitive seller's market is the bidding war.

Imagine finding a home listed for $450,000.

You determine that $450,000 works within your budget and decide you'd like to make an offer.

Then you discover there are eight other offers.

Suddenly, the conversation changes.

Should you offer $460,000?

$475,000?

Should you reduce your contingencies?

Should you offer an appraisal gap?

Should you make other concessions to strengthen the offer?

That's where homebuying can become stressful very quickly.

As homes remain available longer and buyer competition decreases in some markets, sellers may be less likely to receive multiple aggressive offers immediately after listing.

That doesn't guarantee you'll avoid competition.

But it can improve the environment for buyers.

A Home Sitting Longer Doesn't Necessarily Mean Something Is Wrong With It

This is another important change in buyer psychology.

During an extremely fast housing market, buyers sometimes became suspicious of a home that had been listed for several weeks.

They'd ask:

"Why hasn't anyone bought it?"

There wasn't necessarily anything wrong with the property.

Buyers had simply become accustomed to homes selling almost immediately.

As average marketing times increase, buyers need to adjust their expectations.

A home that's been available for 20, 30 or even 45 days isn't automatically a problem property.

It could be overpriced.

It could have been listed at an inconvenient time.

The seller may have rejected earlier offers.

The home may need cosmetic updating.

Or it may simply be located in a market where homes are taking longer to sell.

For buyers, these listings can be worth another look.

Longer Listing Times Could Create Negotiating Opportunities

One of the most important potential benefits of a slower housing market is increased negotiating leverage.

When a home has just been listed and several buyers are interested, the seller has little incentive to make concessions.

But imagine that same property has been on the market for 30, 45 or 60 days.

The seller may become more motivated.

That doesn't mean every seller will accept a low offer.

But there may be more opportunity to negotiate things such as:

• Purchase price

• Seller-paid closing costs

• Mortgage rate buydowns

• Repair credits

• Inspection-related items

• Closing date

• Included appliances or personal property

• Other transaction terms

This is one reason buyers shouldn't look only at the asking price.

The terms of the transaction can matter too.

Seller Concessions Can Be Valuable to Homebuyers

For many buyers, cash is one of the biggest obstacles to purchasing a home.

You may have enough income to comfortably handle the mortgage payment but still need money for the down payment, closing costs, prepaid taxes, homeowners insurance and other expenses.

In a highly competitive market, asking a seller to contribute toward closing costs can make an offer less attractive.

In a slower market, the conversation can change.

Depending on the mortgage program, transaction and applicable lending guidelines, seller concessions may potentially be used toward certain allowable closing costs.

For some buyers, negotiating $5,000 or $10,000 in seller assistance could be more valuable than negotiating the same amount off the purchase price.

Why?

Because reducing the price slightly may only reduce the monthly mortgage payment by a relatively small amount.

Receiving money toward eligible closing costs could significantly reduce the amount of cash needed at closing.

The right strategy depends on the buyer's individual circumstances.

Seller-Paid Rate Buydowns May Be Worth Exploring

Another possible strategy in a market where sellers are more willing to negotiate is using seller concessions toward an eligible mortgage rate buydown.

Mortgage rates have been one of the biggest affordability challenges for homebuyers over the past several years.

If a seller is willing to contribute toward allowable closing costs, it may be possible in certain transactions to use some of that contribution to reduce the borrower's mortgage interest rate.

Whether this makes sense depends on several factors, including the loan program, amount of seller assistance available, cost of the buydown and how long the buyer expects to own the home or keep the mortgage.

That's why I prefer running actual scenarios.

Instead of simply asking whether you should negotiate $10,000 off the home price, we can compare what happens if that $10,000 is used differently.

The numbers can sometimes be surprising.

A Slower Market Doesn't Mean You Should Wait Forever

More negotiating leverage doesn't mean buyers should become overly cautious.

Good homes can still sell quickly.

If a property is priced correctly, in good condition and located in a desirable neighborhood, there may still be significant buyer interest.

The goal isn't to wait until every seller becomes desperate.

The opportunity is having a better chance to make a thoughtful decision and potentially negotiate terms that weren't realistic during the most competitive years.

If you find the right home at a payment you're comfortable with, waiting solely because you hope the housing market will become dramatically more favorable can have its own risks.

Nobody knows exactly where home prices, mortgage rates or inventory will be six months from now.

The better approach is to evaluate the opportunity that's actually in front of you.

Mortgage Rates Aren't the Only Thing Buyers Should Watch

Homebuyers naturally focus on mortgage rates.

That's understandable.

The interest rate affects the monthly principal and interest payment and the overall cost of borrowing.

But mortgage rates are only one part of the housing market.

Suppose mortgage rates fall significantly.

That sounds great for buyers.

But lower rates can also bring more buyers back into the market.

If demand increases faster than the number of homes available for sale, competition could increase again.

That could mean more multiple-offer situations and less negotiating leverage.

Conversely, today's mortgage rate may be higher than a buyer would ideally like, but that buyer might have an opportunity to negotiate a better purchase price or seller concessions because there's less competition.

That's why trying to perfectly time the housing market based solely on mortgage rates can be difficult.

Today's Opportunity May Be Negotiability

For several years, buyers were waiting for mortgage rates to return to extremely low levels.

That hasn't happened.

But something else has changed.

In many markets, buyers have more choices and more negotiating power.

That matters.

Consider the difference between these two scenarios.

In the first, mortgage rates are lower but ten buyers are competing for the same property. The winning buyer may need to offer above asking price and receive little or no seller assistance.

In the second, rates are somewhat higher, but the property has been listed for several weeks. The buyer may be able to negotiate price, closing costs, repairs or a rate buydown.

Which transaction is better?

There isn't one universal answer.

You have to run the numbers.

Why Mortgage Pre-Approval Matters More in a Changing Market

A slower housing market doesn't eliminate the importance of being prepared.

In fact, preparation can give buyers an advantage.

Mortgage pre-approval helps you understand approximately how much home you may qualify to purchase and, more importantly, what different purchase prices could mean for your monthly payment.

A thorough mortgage discussion should consider more than the maximum loan amount.

We should look at:

• Purchase price

• Down payment

• Mortgage program

• Interest rate

• Property taxes

• Homeowners insurance

• Mortgage insurance, when applicable

• HOA or condominium fees

• Estimated closing costs

• Seller concessions, when applicable

Once those numbers are established, you can shop with a much clearer understanding of what actually fits your budget.

New Jersey Homebuyers May Have More Room to Explore Their Options

For buyers searching in New Jersey, particularly throughout South Jersey, increased market time can create opportunities that weren't always available during the hottest years of the market.

Buyers looking in areas such as Williamstown, Washington Township, Sewell, Blackwood, Cherry Hill and surrounding South Jersey communities may find that certain homes remain available longer than they would have previously.

The Jersey Shore can present another set of opportunities depending on the specific community, property type and season.

Real estate conditions vary tremendously from one town and price range to another, so national statistics shouldn't be assumed to describe every local market perfectly.

But when a specific listing has been sitting longer, it's worth investigating why—and whether there's an opportunity to negotiate.

Pennsylvania and Delaware Buyers Can Benefit From the Same Strategy

Buyers in Pennsylvania and Delaware should take a similar approach.

Don't automatically dismiss a property because it has been on the market longer than neighboring homes.

Look at the listing history.

Has the price been reduced?

Did a previous transaction fall through?

Has the home been sitting for several weeks?

Is the seller already under contract on another property?

Those circumstances may affect how motivated a seller is to negotiate.

Your real estate agent can help evaluate the seller and property side of the transaction, while I can help determine how different financing and concession scenarios affect your mortgage.

Florida Buyers Should Pay Attention to Days on Market Too

Florida is another market where buyers may encounter opportunities as inventory and selling times change.

For someone relocating, purchasing a second home or moving within Florida, increased listing times can provide additional breathing room to evaluate properties.

That's especially valuable because Florida buyers need to investigate expenses beyond the mortgage itself, including homeowners insurance, flood insurance where applicable, property taxes, HOA fees and condominium expenses.

Having additional time to understand those costs before making an offer can help buyers make a more informed decision.

Don't Confuse a Slower Market With a Bad Market

Housing headlines can make every change sound dramatic.

Homes taking longer to sell doesn't necessarily mean the housing market is collapsing.

It means the relationship between supply, demand, affordability and buyer behavior is changing.

For buyers, that's potentially positive.

You may have more choices.

You may have more time.

You may face fewer bidding wars.

And you may have a better opportunity to negotiate.

For sellers, it means pricing and presentation may matter more than they did when almost every desirable listing immediately attracted multiple buyers.

It's simply a different market.

The Best Deal Isn't Always the Lowest Purchase Price

When negotiating a home purchase, buyers often become fixated on getting the seller to reduce the price.

But that's not always the most financially beneficial option.

Suppose a seller is willing to give up $10,000 to make a transaction happen.

Should you ask for a $10,000 price reduction?

Should you ask for $10,000 toward allowable closing costs?

Could some of it be used toward an eligible interest-rate buydown?

Would another combination make more sense?

The answer depends on your loan, cash available, mortgage rate and long-term plans.

This is where coordination between your real estate agent and mortgage professional can be extremely valuable.

We can run the numbers before you structure the offer.

Buyers Finally Have Something They've Been Missing: Time

Perhaps the most valuable part of the current shift isn't price.

It's time.

More time to tour homes.

More time to compare neighborhoods.

More time to understand property taxes and homeowners insurance.

More time to review financing options.

More time to consider inspections.

More time to decide whether a house is actually right for you.

Buying a home is too significant a financial decision to make simply because you're afraid someone else will buy it first.

There will always be properties that generate immediate competition, but a broader slowdown in market pace can give buyers a more comfortable home-shopping experience.

Is This a Good Time to Start Looking for a Home?

That depends far more on your personal circumstances than on a national headline.

If you're financially prepared, expect to remain in the home for an appropriate period, have stable income and can comfortably afford the payment, the current market may be worth exploring.

The fact that homes are taking longer to sell can create opportunities that weren't available to many buyers a few years ago.

You don't necessarily need the lowest mortgage rate in history.

You need the right combination of home, price, financing, monthly payment and transaction terms.

And in a market where sellers may be more willing to negotiate, there can be multiple ways to put that combination together.

Start With the Numbers Before You Start Negotiating

If you're considering buying a home in New Jersey, Pennsylvania, Delaware or Florida, get your mortgage strategy in place before you begin making offers.

A mortgage pre-approval can help you understand your buying power, but we can go further than that.

Once you identify a property, we can calculate an estimated payment using the actual property taxes and realistic insurance costs. We can compare down-payment options. And if the seller is open to concessions, we can evaluate whether those dollars may be more valuable toward eligible closing costs, a rate buydown or another permitted use rather than simply reducing the purchase price.

The housing market isn't the same market buyers faced a few years ago.

Homes are taking longer to sell. Buyers may have more time to consider their options. Competition may be less intense in certain markets. And some sellers may be more willing to negotiate.

That doesn't guarantee every home will be a bargain—but it does mean buyers should be paying attention to the opportunities that exist right now instead of waiting only for mortgage rates to change.

If you're thinking about buying a home, let's run the numbers before you start shopping.

Mortgage Mike – Michael DeSantoCrossCountry MortgageNMLS #1766709Licensed in New Jersey, Pennsylvania, Delaware and Florida