Your Home: Asset or Liability?

Have you ever heard the expression, “It’s a buyer’s market?” That phrase describes what’s happening with today’s residential real estate: homes are selling for under their asking price and are taking longer to sell. Good news for buyers; not good news for sellers.

I’m not a real estate professional, but I do understand that a home is often a critical asset for families. So, I would be remiss if I didn’t periodically update you on real estate trends and statistics.

As you can see, homes are selling at nearly 2 percent below the asking price. Perhaps even more concerning, homes are taking 56 days to go under contract–the longest in almost five years. So you may be seeing “for sale” signs up in your neighborhood for longer than you expect.

Is it a Chicken or an Egg problem?

You have to remember that prices of new homes and resales are at historic highs thanks to inflation and due to a national housing shortage. That means the seller may have high expectations.

When it comes to sellers, giving up that 2 to 5% mortgage is difficult, even if downsizing. While that new smaller home may be getting pricier, capital gains taxes and a probable 7.50% mortgage are stumbling blocks.

As you would expect, higher mortgage rates are considered the main reason for the slowdown. Higher mortgage rates mean monthly payments are at, or near, record highs for the last 25 years.

Of course, let's remember also that Real Estate is a Local Market and every community and neighborhood is unique.

If you have questions about your home, I encourage you to speak with a real estate professional who knows your local market. But if you have questions about your home's role in your overall personal finances, please let me know.

I’ll continue to pass along any information I have, including any updates on the outlook for interest rates.

^{RedFin.com, February 12, 2025}