October 2024: Falling Home Prices, Rising Inventory

As of October 2024, the U.S. housing market is experiencing notable changes that are shaping the landscape for both buyers and sellers. Home prices have fallen slightly, with the median listing price down 0.7% from the same period in 2023. At the same time, the inventory of homes available for sale has increased by an impressive 31.9%. This combination of falling prices and rising supply is changing the way both buyers and sellers approach the market.

For potential homebuyers, this shift presents new opportunities. The increased number of listings means more choices in terms of location, home style and price range. With mortgage rates also falling to two-year lows, buyers are in a stronger position than in recent years. However, this doesn’t necessarily mean smooth sailing, as buyers are still navigating a complex and competitive market. Properties are spending an average of seven more days on the market compared to last year, signaling that while there is more inventory, buyers remain cautious.

On the other hand, changes in the marketplace create challenges for sellers. The increase in available homes means that buyers have more options, making it harder for individual properties to stand out. In this competitive environment, sellers must be more strategic with their pricing. Overpricing a home in this climate can lead to longer listing times, as buyers are more likely to compare multiple homes before making a decision.

To stay competitive, many sellers are offering price cuts-about 18.6% of listings in October 2024 had price cuts. This trend reflects a growing understanding that realistic pricing is key to attracting buyers in a crowded market. Additionally, sellers may need to invest in minor renovations or home staging to make their property more appealing, as the surplus of listings allows buyers to be more selective.

For buyers, the current market dynamics can be very beneficial. With more homes on the market, there is less pressure to rush into a purchase. The expanded selection allows buyers to find homes that meet their needs without having to compromise on location or features. In addition, falling mortgage rates have increased many people’s purchasing power, making it an ideal time to enter the market, especially for first-time buyers.

However, buyers should remain cautious. While the market may seem favorable, there are still factors to consider, such as future interest rate movements or local market fluctuations. It’s important to work with a knowledgeable real estate agent who understands both the broader market trends and the specific conditions in the buyer’s desired area.

Sellers may be inclined to drop prices, but that doesn’t automatically guarantee a sale. Pricing competitively from the start is often a better strategy than relying on post-listing discounts. In addition, as homes spend more time on the market, buyers may use this as leverage to negotiate even further price reductions, putting additional pressure on sellers to be flexible.

Sellers should also focus on highlighting the unique aspects of their homes to stand out in a crowded market. Whether it’s highlighting energy-efficient features, proximity to schools or recent upgrades, showcasing what makes the home desirable can make a significant difference. In some cases, working with an agent who can implement creative marketing strategies, such as virtual tours or social media campaigns, can help generate more interest.

October 2024 presents a mixed bag for the housing market. While falling prices and increased inventory create more opportunities for buyers, sellers must adapt to a more competitive environment. By remaining flexible with pricing and focusing on marketing, sellers can still succeed in attracting serious buyers. At the same time, buyers can take advantage of expanded options and lower mortgage rates, but should remain informed and strategic about their purchases. Understanding current market conditions is key for both sides to make informed, successful decisions.