The housing market is finally showing signs of cooling for potential homebuyers. Homes are sitting longer — a median of 60 days on the market in July, the slowest pace on record for that month — and sellers are cutting prices. Nearly 27.4% of listings saw reductions, the highest share since 2018, according to Zillow.
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For buyers willing to work with today’s not-so-low mortgage rates, the question is whether now is the time to act. With more inventory and less competition, home shoppers may find themselves with more negotiating power than they’ve had in years.
Room for Negotiation
What the current market offers buyers is leverage, according to Evan Harlow, a realtor at Maui Elite Property. He said the high share of price cuts doesn’t automatically make homes cheap but certainly more affordable. “Unlike the last housing cycle downturn, these discounts are more about sellers adjusting to aspirational pricing than a collapse in values,” Harlow said.
He recently helped a client in Phoenix secure a house for 6% below list price, “an unimaginable feat just two years ago.” Of course, that buyer had run the numbers, was preapproved and had a clear handle on total costs.
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Tread Cautiously and Think Long Term
Even with room to negotiate, newcomers should tread carefully. A $20,000 reduction can disappear once insurance, property taxes and current mortgage rates are factored in.
If you plan to stay seven to 10 years, conditions are good. “If you’re trying to ‘time’ the market for a fast return, this environment might not be friendly to such a strategy,” Harlow said.
Cash Buyers Have a Leg Up
Buyers with cash or large down payments have added flexibility. Yancy Forsythe, a real estate investor and agent with Missouri Valley Homes, explained, “Cash buyers and investors are very successful right now with the current inventory and that most sellers are willing to negotiate, but even then with the holding costs associated with high interest money, even they have limits.”
Location Matters
Forsythe also emphasized the importance of location. In the Midwest and some Southern markets, price cuts are bringing homes back within reach, while on the coasts even discounted homes remain expensive.
“That’s why it’s smart of buyers to get preapproved and know exactly what their budget looks like before jumping in,” he said. Well-prepared buyers will be the best positioned now and if reductions and inventory expand into 2026.
Inflation Is Still Affecting Home Prices
Rising costs continue to shape the landscape. Jeff Lichtenstein, CEO and broker at Echo Fine Properties, pointed to broader pressures. “We have been experiencing a ramp up in inflation due to tariffs and deportations. As for labor, my landscaper told me labor cost has went from $180 to $280 a day for a laborer. He has to pass those costs onto the consumer. Same with other maintenance and building costs such as roofers.”
Even if listing prices have softened, these expenses can blunt the benefit to buyers.
Sellers Outweigh Buyers
Inventory has improved too. “When the market slowed down in May 2022, the baseline of inventory was too low. Three and a half years later the baseline of inventory caught up,” Lichtenstein said.
Consider Seasonality
Finding a great price might depend upon timing local market patterns, which are often seasonal. In South Florida, Lichtenstein noted, “our buying season market doesn’t kick into play until February. If you plan on renting the house out, you will run dry in August.”
Knowing your market’s seasonality can help you plan your offer strategy and cash flow.
Follow Warren Buffett’s Lead
He noted a signal from Wall Street’s “Oracle of Omaha,” billionaire Warren Buffett, and his latest move as Berkshire Hathaway recently made major investments in homebuilders. “The Oracle making not one but two gambles on housing is as sure of a signal as you can get.”
This Could Be the Bottom
For buyers with finances in order, Lichtenstein sees this period of time as a window worth considering. While deals may still exist in 2026, he said the current mix of factors is unusual.
“The same factors [as right now] won’t be in place, which is a perfect storm for buyers.” Many sellers are effectively saying “make me an offer,” which points to motivation and openness to negotiate, he noted.
If you’ve done the math and are prepared for the costs, now could be the moment to move; markets this friendly to buyers don’t come around often.
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This article originally appeared on GOBankingRates.com: Record Price Cuts on Houses: Is Now the Time To Buy?
