The Cracks I Was Seeing In The Housing Market And What Sellers Needed To Do About It

Why So Many Homes Were Not Selling

A lot of sellers were still anchored to the idea of strong appreciation year after year. When the market slowed, that expectation became a difficult conversation.

The faster you accepted the new reality, the easier it was to make smart decisions and avoid chasing the market down.

Ten Market Cracks I Thought Sellers Needed To Pay Attention To

1 Household debt was at an all time high

I was watching household debt climb, and delinquencies rise with it. That mattered because it often showed up as buyers feeling more cautious and more budget sensitive.

2 Commercial loans were struggling

Commercial real estate was under pressure, especially after the shifts that happened during the covid years. Even if you were selling a home, stress in the broader market tended to impact confidence.

3 Housing inventory was increasing

Inventory was rising nationally, and it was rising locally in Orange County too. A big reason was that homes were sitting longer, which created more competition.

More competition meant buyers had more leverage. If one seller would not cooperate, buyers could simply move on to the next listing.

4 Mortgage applications were down

When fewer people applied for mortgages, it usually meant fewer buyers were actively jumping into the market. That translated into slower traffic and longer days on market.

5 Housing affordability was getting harder

I kept hearing the same thing from buyers. Housing felt unaffordable, and income growth had not kept pace with home prices.

When affordability tightened, buyers either paused, negotiated harder, or focused only on the best deals.

6 The rental market was cooling

Some sellers assumed renting was the easy backup plan. But rents were not always as strong as people expected, and a cooling rental market could create its own challenges.

7 Warren Buffett was stockpiling cash

I pointed out how Warren Buffett was holding a massive amount of cash reserves. I could not say exactly what that meant for housing, but it did signal that smart money was staying cautious and waiting for opportunity.

8 Consumer confidence was wavering

When people felt uncertain about the economy, they tended to delay big decisions. That uncertainty showed up as buyers being slower, more hesitant, and more sensitive to pricing.

9 Bond yields were pushing toward 5 percent

I was watching bond yields hit levels we had not seen since the Great Recession. That mattered because higher yields often went hand in hand with higher borrowing costs and more pressure on affordability.

10 First time home buyers were a smaller share of the market

First time buyers were making up a smaller portion of total buyers. That mattered because first time buyers often drove demand, especially for entry level homes.

What This Meant For Sellers

The main takeaway was simple. Price and presentation mattered more than ever.

If you wanted to sell, you needed to respond quickly to the market. This was not a moment to test the market, reach for the stars, or assume the next buyer would overpay.

The Comp Problem Sellers Were Running Into

Another challenge was that closed sales had been lower for the past couple of years. In many neighborhoods, there were fewer recent comps, and sellers were trying to fill that gap with hopeful math.

I gave an example where a seller saw a two year old comp at two million and assumed the home was now worth two point five million. Most buyers were not thinking that way, especially in a market where appreciation was no longer moving like it used to.

The Conversations I Kept Having With Sellers

I do not have to sell

I heard this constantly. Sellers would say they were not desperate, so they could just wait it out.

My response was that listing was not about need, it was about desire. If you wanted to sell, you had to cooperate with the market, because waiting could mean the home was worth less later.

I will sell if I get my price

This usually meant the seller wanted more than market value. In a slowing market, that strategy often led to longer days on market, price reductions, and weaker negotiating position.

I need top dollar because it is my nest egg

I understood the emotion, but buyers did not care what a seller needed. Buyers cared about what the home was worth to them, what it would cost to own, and what other options they had.

I will just rent it out

Renting could work for some people, but it was not a simple escape hatch. If the rental market was cooling, you might not get the rent you expected, and vacancies could cost you real money.

There was also the risk of getting a tenant you could not easily remove. That was not a decision to make out of frustration.

What Sellers Often Misdiagnosed

Some sellers focused on details that were not moving the needle. I heard things like reorganizing photo order in the MLS, changing the sign placement, or rewriting descriptions.

Those things were rarely the reason a home was not selling. Most of the time, it came back to price, condition, and how the home showed online.

Credits For Repairs Were Not A Magic Fix

Many sellers wanted to avoid painting, replacing carpet, or improving floors by offering a credit instead. I understood why, because it was expensive and a hassle.

But buyers knew it was expensive too, and they usually offered less than you hoped. Buyers also tended to overestimate renovation costs, which pushed offers even lower.

Why Hiring The Right Agent Mattered More In This Market

In a shifting market, you wanted an agent who had closed recent transactions and had real time feedback from buyers, showings, and negotiations. An agent who had not sold a home in months might not have the current data or instincts needed for pricing and strategy.

I also warned sellers not to pick the agent who promised the highest price just to win the listing. Overpricing early often led to price drops later, which could result in chasing the market down.

Final Takeaway

In this kind of market, the goal was to be realistic, move quickly, and price correctly from the start. The sellers who adapted early usually protected more of their equity than the sellers who waited too long to adjust.

If you wanted to sell, the best thing you could do was commit to the process, trust the strategy, and cooperate with what the market was actually telling you.