As I approach my 40th year in Real Estate sales this October, I reflect on the market once again. I can feel change coming based on going through this rodeo a few times before.
When I began selling homes, interest rates were around 11-12%, down from a high of about 16%. Discount points for that rate were around 2%. They fell further, settling into the 6-9% range most of the 1990’s and 2000’s. It wasn’t until the 2010 decade they fell further and hovered in the 4-5% range for most of the decade. This decade, the 2020s have been as wild as the 1980s, where we’ve ranged from close to 2.5% to 8%.
What this does to home prices is pretty predictable, though it’s never the full story on price values. We are fortunate that the last few years have been stable in the 5-7% range and have had pretty close to flat sales prices when adjusted for inflation.
While I am selling and doing Property Management full-time again after 15 years of selling part-time while I coached real estate agents (and others), I feel I’m again coming into a new cycle for Real Estate Sales once again.
Some years ago, I began looking at the cycles like a clock face. With 12:00 being the peak of the cycle and 6:00 being the bottom of a cycle. I just saw another way to look at the cycle on Reddit that claims a downturn is imminent, but gives no solid reasoning other than “history.” Call me if you want a picture of their graph – 678-477-4897.
The problem is, even with my method, due to the lag in closings from the time things are sold, you never know when you’ve been at a peak or bottom until 6-12 weeks AFTER it happens. However experiecne shows us that specific things occur before those peaks and bottoms of the market, and I’ve been watching for them.
They include:
1. Buildup of inventory in both resales and new homes. I am seeing that happen. If you have been in North Georgia since 2007, you will recall what we called “pipe graveyards,” where builders were so close to building they had the pipes in the ground only to go belly-up.
- Price reductions. When the market slows, people who really need to sell reduce their prices. If you want to know how many active listings in your area have reduced prices, ask, and I’ll run a report of your specific local market for you.
- Slow or lower numbers of homes under contract despite increasing inventory, price reductions, and lower interest rates. I see that happening now. Nationwide, January 2025 to January 2026 saw an 8.4% reduction in the number of homes sold. This is not seasonal; it’s from last January to this January.
- Increased days on market before a sale. Yes, I am seeing this trend occur as well.
Bottom Line Takeaways:
- We have slipped from a Seller’s Market to a Buyer’s Market. And remember: Buyers ALWAYS pay what they THINK a home will be worth later vs what it’s worth on paper today. In other words, if they think the market is INCREASING in value, they have no problem paying MORE than it’s worth, since they’ll own it when it’s worth that later… And conversely, if they think the market is DECREASING, they want to pay what it’s going to be worth LATER.
- If your retirement plans include using the equity in a home you own now, you may want to talk to your wealth manager and Realtor about what that may look like for you. We are IN a peak of prices now. If the equity in your home – AKA “The bank of your house” – is going to decrease, does it make sense to get it out of that “Bank of your House” NOW and put it somewhere the equity-eating gremlin – that comes and takes some of it away every day when the market value declines – can’t get to it. I have a story about this strategy where clients I had sold their home, bought their replacement home, and then RENTED for 2 years while the market declined. Their retirement dream still came true, when – if they had waited – it never would have. A sound STRATEGY can make all the difference for the rest of YOUR life.
Happy to discuss your future plans confidentially. Call me – 678-477-4897
Donna Stott, Realtor, Broker
Stott Homes
