Inventory Rising, Sales Stalling
Min 1:
Sellers outnumber buyers by the widest margin in modern real estate history.
New listings rose over 1% year-over-year in January after months of declines. Sellers who sat on the sidelines for years are finally listing properties. But buyers aren't showing up to meet them.
Redfin tracked pending home sales falling over 3% year-over-year.
The typical home sits 64 days on market before going under contract—the longest span in six years and nearly a week longer than last year.
That gap between supply and demand creates negotiating power unprecedented since pre-pandemic markets.
Sellers are bleeding carrying costs for two months while waiting for buyers who can now afford to be extremely picky.
Min 2:
Sellers finally accepted they can't wait forever for rates to drop back to 3%.
Many sat on properties hoping to time the market perfectly. Rising property taxes, insurance costs, and maintenance expenses forced their hand.
Buyers gained leverage sellers held for years. Austin agents report sellers coming to terms with pandemic pricing being over.
They're accepting offers below list just to close deals and move on.
The reversal happened fast. Markets that favored sellers completely flipped as inventory expanded while demand stayed flat.
Some sellers pull listings rather than accept reality—around 6% according to NAR data—but most are negotiating.
If you're buying today, you're dictating terms impossible eighteen months ago. Inspection contingencies sellers wouldn't consider during bidding wars are now standard. Closing cost credits sellers laughed at during 2021 are now expected.
Min 3:
Compare negotiating power today versus two years ago and the swing feels like different markets entirely.
Buyers who made twenty offers and lost in 2022 are now making one offer and winning with concessions.
A Milwaukee agent confirmed seeing steady buyer traffic but they're taking time, requesting inspections, and negotiating hard.
Contrast that with pandemic markets where buyers waived everything just to compete.
The dollar impact stacks powerfully. Negotiate 5% off list price, demand 2% in closing cost credits, and secure seller-paid repairs worth another 1% to 2% of purchase price.
You're effectively buying at 8% to 9% below asking.
Buy five properties in current market versus peak seller's market and you're saving potentially hundreds of thousands across the portfolio through superior negotiating position alone.
Min 4:
Small investors crush this market because you can be selective without committee pressure to deploy capital.
Pick the best deals. Walk away from anything that doesn't pencil perfectly.
Speed still matters but differently than before.
You can take time on due diligence without losing deals. Sellers waiting 64 days for buyers aren't walking away from serious offers requesting thorough inspections.
Local knowledge identifies desperate sellers versus those just testing the market. You know who needs to close and who's fishing for miracle offers.
The algorithm treats them identically.
Risk worth considering: if inventory keeps rising without buyer demand increasing, prices start falling outright.
You're negotiating today's prices while tomorrow brings potentially cheaper options. But timing bottoms is impossible.
Min 5:
Any buyer with patience can access this negotiating power. You don't need special relationships or inside information.
Listings sit publicly for two months—plenty of time to analyze thoroughly.
The combination of rising inventory and stalling sales creates buyer's markets in metros that were seller's markets recently.
You're not competing against ten offers. You're often the only serious offer on the table.
Small operators who understand seller motivations can structure offers that appeal emotionally while saving financially. Flexible closing dates, rent-backs, and personal letters cost nothing but improve acceptance rates.
The restored bonus depreciation amplifies savings.
Buy properties at negotiated discounts, write off massive amounts immediately, and profit from seller concessions that reduce your capital requirements.
Takeaway:
Sellers are finally listing properties after years of sitting tight, but buyer demand isn't keeping pace.
That creates the widest gap between supply and demand in six years—and unprecedented negotiating power for buyers.
Properties sitting 64 days on market represent sellers bleeding carrying costs for two months while waiting for offers.
That desperation translates into acceptance of terms impossible during seller's markets—price cuts, closing cost credits, and repairs previously off the table.
Small investors win because patience beats pressure to deploy capital.
You can analyze thoroughly, negotiate aggressively, and walk away from anything that doesn't meet standards. Institutional investors face deployment mandates that force suboptimal deals.
Market dynamics favor buyers dramatically.
Around 6% of sellers are pulling listings rather than accept new pricing reality, but the rest are negotiating. That means serious buyers face less competition while holding all leverage.
Move in the next 90 days while inventory continues rising without corresponding buyer demand. Structure offers with inspections, credits, and concessions sellers rejected two years ago.
Wait until buyer demand returns and you'll compete for properties instead of commanding terms.
