No doubt, there has been a shift this year.

Few sellers have to move. Most just want to. None of them are excited about being a buyer if they need to finance their next home. They don’t want to give up their very low interest rate they got during COVID. They are upset that they can no longer expect to sell their house the first day on the market, get above list price, and the buyer waive a home inspection.

Buyers are only buying if they really need to move. They don’t like the combination of high prices and high interest rates. They have more choices and power in the transaction than ever, but they can’t see the forest for the trees.

First time buyers account for the lowest percentage of buyers in forever. Most first time buyers seem to want to skip the small, boring most affordable houses and rent until they can afford what we used to call the “Move up” house. This is leaving most houses under $250k to investors. Almost every super affordable house I have sold this year has been purchased by an investor. Even in multiple offers, they are easier to work with and will often pay the most for a house.

Basically nobody is happy.

This is the first time in my 20 year career of seeing such pessimism from both sellers and buyers in a fairly good market. The only other time I have seen both parties this discouraged is during the Great Recession. It was an extreme Buyer’s Market so sellers were unhappy. Buyers were worried their house would be worth less than they paid for it after the closing. Nobody was happy.

I think we are stuck here for a while. I don’t see prices going up much in the near future and I don’t see them going down either. I don’t see interest rates going down enough to make much of a difference. I think this is just the new normal.