Navigating A Challenging Real Estate Market
Buyers should review finances, be prepared to act quickly, work with an agent and consider long-term value to success in today’s market.
NEW YORK – Real estate has long been touted as a worthy long-term investment. With that conventional wisdom in mind, young adults often make buying a home one of their first big-ticket purchases.
Though real estate remains a potentially lucrative investment, the market for homes has been difficult to navigate for several years running.
High mortgage interest rates and low inventory have left many buyers feeling priced out of the real estate market. Others may find the competitive nature of the modern real estate market too stressful. No one can predict if or when the real estate market might be less challenging, but the following are some ways those looking for a house can navigate that process.
Ready your finances
It goes without saying that prospective buyers must get their financial affairs in order before they begin shopping for a house. But finding a home in the current market takes time, and some buyers might have let their mortgage preapproval letter expire without realizing it. Others might have experienced a dip in their credit rating as they turned to credit cards to confront inflation.
That means buyers who began looking for a home for months or even years ago might not be positioned to buy now should they find a home to their liking. Revisit your finances if it's been a while. Pay off any consumer debt that has accumulated in recent months and reapply for mortgage preapproval if necessary.
Be ready to pounce
Data from the National Association of Realtors® found that the average home spent 32 days on the market before being sold in November of 2024, which was a full week longer than a year earlier.
That's good news for buyers, but it still means buyers must be ready to pounce if they find a home and home price to their liking.
Hire a real estate agent
The hectic pace of the modern real estate market can be difficult for anyone to keep up with. But real estate agents keep up with the market for a living, and they can be invaluable resources for buyers whose commitments to work and family are making it difficult to keep pace.
Emphasize long-term growth and value when assessing properties
According to Zillow, the median list price of homes in the United States was just under $387,000 by the end of January 2025. But buyers must also recognize that 22.4% homes sold above list price in that month, according to a Redfin analysis of MLS data and/or public records. Buying a home is more than an investment in a property. It's also in some way an investment in the town where the home is located and in a homeowners' future. So, while it can be tempting to buy a home with the lowest asking price, home buyers should also seek homes that figure to experience the best long-term growth in value. Homes situated in safe and welcoming towns with good schools are arguably a better investment than homes with lower sticker prices but no such amenities.
The real estate market has been challenging for buyers over the last several years. Various strategies can help buyers find a home that suits them and their budgets.
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