June 25, 2025
By:
Artur Zadrozny
Navigating the 2025 Real Estate Market
The housing market is often regarded as a barometer of the overall economic health. In 2025, the housing market finds itself at a complex crossroads, shaped by the aftermath of the global pandemic, persistent inflation, fluctuating mortgage rates, and changing consumer preferences. It has been a taxing year for real estate attorneys, as well as buyers and sellers alike, where it seems that every deal is met with challenges.
First, home prices remain stubbornly high. The median sale price for existing homes hit a record of $422,800 in May, according to the National Association of Realtors. Despite record prices, sales continue to lag: existing home sales slumped to just 4.03 million annualized in May, the slowest for that month since 2009.
Second, the inventory is very low. Many homeowners are holding on to sub 3% mortgages rather than moving and taking on current 6-7% rates. This, in turn, keeps prices high. However, new construction is helping. Builder inventory is up, resulting in new available homes reaching their highest since 2007-2008.
Third, mortgage rates remain high. First-time homebuyers are particularly affected by this. Many are finding it increasingly difficult to save for a down payment while also contending with rising rents. Government programs and creative financing solutions, such as down payment assistance and shared equity models, have become more popular, but a substantial affordability gap remains.
Facing today’s market challenges, what should buyers and sellers anticipate? Buyers should carefully consider requesting credits or repairs, particularly in competitive, multi-offer situations. Sellers are inclined to choose offers from buyers who waive inspections (though this is not recommended), even if the purchase price is slightly lower than other offers. Additionally, buyers should be prepared to sign an appraisal waiver to strengthen their offer. While most properties appraise without issues, providing a waiver might persuade the seller to accept the buyer’s offer. Lastly, cash offers are typically favored by sellers. If a cash offer is not feasible, ensure that the buyer’s loan application is fully prepared once the offer is accepted.
It remains a seller’s market. Properties that are priced appropriately and in good condition tend to sell quickly, often receiving multiple offers. Homes in desirable locations frequently sell through private listing networks rather than being listed publicly. Conversely, properties in less favorable locations or poor condition often attract offers from less qualified buyers, leading to more canceled deals or transactions that take longer to complete. This has a direct effect on the seller’s bottom line.
For real estate attorneys, today’s market has resulted in more work than in the past: not in volume, but rather the amount of time and effort needed to close a typical transaction. Buyers are pickier and sellers are less accommodating, which translates to longer and more contested attorney review periods. The loan approval process has also become complicated, requiring more due diligence from the attorneys and all parties involved.
The real estate market will remain unpredictable for the considerable future, which is all the more reason to hire an experienced real estate attorney to help protect your investment and close the deal smoothly.