Today’s Buyers Just Can’t Afford Yesterday’s Price

A report from WTOP in Washington DC. “The D.C. housing market continues to show signs of shifting. The number of sales in April was down 3% from a year ago. New listings to come on the market last month rose 16%, and the total number of active listings in the D.C. metropolitan area is up almost 53% from last spring. ‘I think we’re transitioning into a buyer’s market. I would not call it a buyer’s market yet. It is not yet fully balanced, but there are a bunch of indicators that show we are going toward there,’ said Sherry Rahnama, owner of RE/MAX Executives in Fairfax, Virginia. ‘Maybe you’ve missed the peak, but if you are more realistic about your expectations, we are definitely not in a market where you are going to see a bidding war and less than 24 hours later you have multiple contracts. Just be realistic about your price and your expectations, and know that it is going to take a little bit longer to sell.'”

From Maine Biz. “Two high-end condominium developments and a 327-unit apartment complex targeted to middle-income households are all now on hold. All were fully approved. A luxury condo project planned for 64 Pine St. is not currently an affordable build, according to developer Tom Landry, who owns Portland-based Benchmark Real Estate. Another paused project is Redfern Properties’ 327-unit apartment building planned for 165 Washington Ave. A five-story mixed use building planned for 185 Commercial St. has also been sidelined, due to economic factors, concerns over crime and a slowing of the condo market on the peninsula. ‘The changing environment of the downtown landscape relative to safety is a real concern. Buyers seem to be looking for alternatives to downtown,’ said developer Steve Baumann.”

From DNYUZ. “As 2025 began, the stars were aligning for a housing market rebound. Even in markets where prices have fallen and inventory is piling up, like Austin, Texas, homes are sitting on the market for months. In fiercely competitive areas, like the New York City suburbs, where prices are still rising and homes sell fast, properties that would have gotten a dozen offers a year ago now get two or three. La’Keshia White, a real estate agent in Douglasville, Ga., said that some of her prospective buyers dropped out of the market after losing federal jobs. Others are nervous and scaling back their budgets to leave more cushion should their financial situation change. ‘They used to be content, thinking their jobs are going to be there, but it’s not the same anymore,’ Ms. White said.”

The Star Press. “The third type of housing problem in Indiana afflicts much of the state. Past population decline has led to a crash in the price of housing, so that it is now beneath the replacement cost of building a new home. Now, housing prices rose during and after COVID-19, rearranging this geography a bit. However, the cost of construction also rose. With tariffs on perhaps 10% of housing inputs and restricted immigration, the cost of building a new home this summer is now much higher than last year. But prices are beginning to drop, so we’re back in a position where two-thirds of Indiana counties suffer from an excess supply problem. According to the U.S. Census Bureau, there were almost 250,000 habitable, yet vacant, homes across the state as of 2023. This does not include derelict housing that could be repaired.”

“It is worth noting that these homes do not appear in real estate listings. That causes real estate agents and builders to mistakenly claim there’s a housing shortage. That is piffle. These excess homes don’t appear in the Realtor listings because real estate agents cannot make money selling them. The fact that agents don’t list another quarter-million homes is clear evidence of this problem. Subsidizing new homes to sell them below cost further reduces the value of existing homes across the city. Blame the people who are working to fix a demand-side problem with counterproductive supply-side solutions. Just to be clear, the problem is not that there is some mysterious failure of housing markets. Housing markets are saying loud and clear, ‘Don’t build here until you improve demand for housing.'”

Arizona’s Family. “Realtors say the metro Phoenix area is a buyer’s market. The number of sellers is now outpacing buyers. But it’s not so great if you are trying to sell your home. The U.S. housing market currently has about 34% more sellers than buyers. Local experts say the margin is even higher in metro Phoenix. ‘Today’s buyers just can’t afford yesterday’s price,’ said Jeff Sibbach, a real estate agent. ‘If it doesn’t sell in 15 days, we’re going to have to make a price adjustment. I actually, for people that have extra slow traffic after 10 days active on the market, if there’s no offers, that means you’re overpriced.’ In fact, some economists are emphasizing just how different things are today. ‘Inventory is up 50% today compared to last year at this time. So that means there’s a lot more competition amongst sellers to get their homes sold,’ said economist Fletcher Wilcox.”

CBS 8 in California. “San Diego’s once red-hot housing market might be losing some of its heat. More homes are sitting on the market longer, and some sellers are starting to cut prices. At a property in La Mesa, realtor Zaid Karim with Karim Realty Group is overseeing renovations to help his client’s home stand out in this evolving market. ‘In this market, sellers have to do a little bit of legwork in order to help their property sell for maximum profit,’ Karim said. Active inventory is up 71.2% compared to this time last year. Still, overpricing remains a common pitfall. ‘We are seeing where properties do sit a little bit longer on the market, and the main ingredient for that is being overpriced,’ said Karim. ‘If you’re overpriced, the property will sit. Then you’ll have to lower the price and lower it again, which does not look like a positive trend for that home. It always has a positive outlook in the future. Yes, you will get a local up and down, but if you look at it over a number of years, the values are always continuously going up.'”

Global News in Canada. “For residents of B.C.’s Lower Mainland, lining up for condo pre-sales isn’t new. But the chance to save money brings them out in droves. Hundreds lined up outside the Belvedere Presentation Centre in Surrey on Saturday morning, drawn by the developer’s ‘Condo Day’ flash sale to find buyers for the few dozen unsold units remaining in the project. ‘They’re selling 25 per cent lower [than full price],’ Realtor Harman Sandu said. ‘It’s a really good deal.’ Square Nine Developments, the company behind the project, sold 700 suites over the past two years while the building was under construction. The owners told Global News they hope Saturday’s flash sale will quickly move the remaining 75. Many of the people Global News spoke to at Saturday’s flash sale said they were buying the suites to rent out.”

Western Investor in Canada. “Demand for land is up but prices are down as a wave of court-ordered sales creates a period of price discovery. ‘A significant increase in distressed residential land properties for the first few months of 2025 is resetting new price floors, providing opportunities for developers to get back into the market,’ said Casey Weeks, an executive vice-president with Colliers. The distress sales are happening across the Lower Mainland, in multiple submarkets. Weeks said values have declined in many cases by 20 to 40 per cent or more. An absence of investors, spooked by economic turbulence, has further challenged developers’ pro formas, making it tough for them to secure financing and move projects forward. Softening rents have also made it difficult to justify fresh investment by both developers of purpose-built product and investors.”

“The Fraser Valley is an area where consumer confidence is very much in the spotlight. ‘Volume of residential land transactions are down over 80 per cent for the past two years,’ said Joe Varing, principal at Varing Marketing Group in Abbotsford. ‘There were 40 transactions that took place in 2022-2023 whereas from 2024-2025 there were less than 10 land transactions.’ The result is a squeeze on land pricing, with owners clinging to past notions of value as buyers offer significantly less than what they did three years ago.”

“Varing cites the example of a townhome that was selling for $1.1 million to $1.2 million for the finished product in Surrey and Langley but today it is selling for $900,000. Hikes to interest rates in 2022 kick-started the decline, but even with today’s lower prices there is little movement in terms of the volume of deals needed to hit the pre-sale target in order to finance new construction projects. When it comes to single-family homes, Varing said there has been a slowdown during the last month across all residential product types. As for Vancouver Island, the land market has been experiencing a lot of pressure in terms of pricing. There haven’t been a ton of sales on the land side, said Cordell Lloyd, associate vice-president with Cushman & Wakefield in Victoria; instead, there have been a lot of court-ordered sales and processes with groups that weren’t able to move forward with their projects because of these changes in the market since January 2024.”

From The Post. “Construction companies now make up nearly a third of all business liquidations, and the sector’s downturn still has some way to go, experts say. The industry has been struggling through a prolonged downturn, and that has led to a decline in new startups and an increase in liquidations, according to the Building Research Association of New Zealand (Branz). Its latest industry data shows construction business liquidations were up 37% in the year to February, and made up 31% of all business liquidations. Centrix reported that 728 construction companies went into liquidation in the year to March, with new home builders and property developers among the business types with the highest number of company failures.”

“Infometrics chief forecaster Gareth Kiernan said that across the industry a lot of construction businesses, in both the residential and the commercial space, were under pressure. ‘I’ve heard reports of businesses pricing work at a level where they are not going to make money. It’s to try and keep people in work as long as possible, but it is not a sustainable position to work from.’ In late 2024 and the early months of this year, there was a bit of an upswing in optimism, with the residential sector stabilising and some more demand, Kiernan said. ‘But that optimism has evaporated again, and the pressure on the sector remains. Interest rate cuts have not had much effect on construction activity, and only limited effect on the housing market.'”

The Chosun Daily. “South Korea’s construction industry is faltering under a perfect storm of rising costs, tighter regulations and vanishing demand—raising fears of a wave of bankruptcies this summer. In Chuncheon, Gangwon-do (Province), work on a 318-unit apartment complex has been at a standstill since October last year. Although the 37-story building’s frame and electrical wiring were completed, construction was halted after the builder went bankrupt amid a liquidity crunch. The original move-in date of June 2024 was postponed to July 2025, but with no clear timeline for resumption, even that schedule now seems in doubt. The project is not alone.”

“Already under pressure from prolonged weak demand, shrinking orders and a spike in unsold homes, these companies are also grappling with soaring construction costs that have slashed profitability. Now, with tighter lending rules expected to suppress housing demand even further, many firms fear a liquidity crisis is imminent. A construction industry official said, ‘We’re already seeing a rise in unsold units and a drop in new orders. If loan regulations are tightened further, small and mid-sized builders will be the first to fall. That’s why people are calling this the ‘July crisis.’ One of the biggest red flags is the surge in unsold completed homes—so-called ‘toxic inventory’—which hit 26,422 units in April, the highest level in nearly 12 years. In the first quarter of 2025 alone, 747 firms closed, up 3.6% from the same period last year. The Korea Construction Industry Institute warned that the current slump is unfolding more rapidly than during the 2008 global financial crisis, with multiple indicators deteriorating at a faster pace.”