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Remember the home-buying frenzy and bidding wars of 2021? In many parts of the country, those have disappeared into the rearview mirror as home buyers find the real estate market has finally flipped in their favor, according to new data from Redfin (NASDAQ:RDFN).

New Homes Sales Down 2%

Due to increased supply, new homes are now transacting for nearly 2% less than the listing price. In January, inventory was up by 5% over the same time last year, and in some markets, listings are higher than any time over the previous six years. At the same time, high prices and high interest rates have lessened the demand, which has also contributed to turning the market from a seller's to a buyer's. 

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Key Findings In Redfin's Data

• Sluggish sales: Homes in contract by 6.3% to the lowest figure since the early days of the pandemic
• Listings sitting longer: Homes that sold in January had been on the market an average of 56 days — the longest period since 2020.
• Home price growth is slowing down: The median home price appreciation in 2024 was 4.1%, which hadn't been experienced in over five years.
• Sellers are more willing to negotiate: In January, homes sold on average for 1.8% less than the asking price.
• Deals are failing to close: Deals were canceled in January at the highest rate since at least 2017.

"Historically, a buyer's market has been defined as when months of supply reaches 4-6 months—but old definitions don't fit the reality of today's market," said Redfin Economics Research Lead Chen Zhao. "Many buyers don't feel like they are in a buyer's market, with home prices at near-record highs and mortgage rates elevated. But we are more than halfway through the decade, and this is the first time we can say that buyers have as much, if not more, power than sellers."

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A Tale Of Two Markets

New home construction has occurred in the Sunbelt much faster than anywhere else; according to Construction Coverage, the top ten states with the most homes include Texas, North Carolina, Florida, Tennessee, and Arizona, some of which appear multiple times. The abundance of new construction has turned the Sunbelt into a buyer's market. Florida is particularly favorable to new buyers because the construction boom there failed to account for increased house prices, the fear of natural disasters, and increased insurance costs, causing buyers to press pause.

"It's 100% a buyer's market right now," said Bryan Carnaggio, a Redfin agent in Jacksonville, Florida. "There's a ton of inventory. Everywhere you go, there's a house for sale. Most sellers here know the market is bad and it's not advantageous to sell right now, but either they're tired of waiting for things to improve, or they really have to sell because they are moving out of state. For buyers, this means there are more opportunities to negotiate on price and terms." 

Conversely, Northeast sellers still have the upper hand in some markets. According to Altos Research, the Northeast lacked markedly in inventory at the end of 2024 compared to the Sunbelt. However, inventory levels are expected to even out in 2025, which HousingWire.com predicts could be the last year of an inventory shortage. 

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This article Sellers Are Getting Desperate, Flipping U.S. Real Estate Into A Buyers Market, Redfin says originally appeared on Benzinga.com

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