How to Coach Reluctant Buyers and Sellers in This Unusual Market

As price cuts become more common and inventory slowly rises, you may be wondering how best to advise clients who are deciding whether to buy or sell. Zillow Economist Nicole Bachaud distills three big takeaways from the latest market research.

1. Inform cautious buyers that waiting for big price drops may be a bad idea.

Takeaway for agents: “We’ll see the usual slowdowns that come in the fall and winter,” says Bachaud. “But it’s probably going to be even more pronounced this year, as we’re seeing people pulling out for reasons like budgetary constraints and higher interest rates. Home values will continue to decline for the off months, just not by much.”

“And when we're looking at the amount that homes appreciated over the course of the pandemic, these small dips in prices are not meaningful in making a home affordable. They’re also not hurting homeowners’ equity.”

“Inventory is still way too low in order for those dips to make a real difference. As soon as prices get to a point where more folks can afford to buy a home, they and every other buyer waiting on the sidelines is going to jump in there. That demand bump is going to push prices right back up.”

“If your buyers are sitting out, waiting for prices to drop significantly, they’ll likely be waiting a long time.”

2. Encourage buyers to take the time to pick the right home.

Takeaway for agents: “If you're a buyer right now who can afford it, this can be a great time to buy,” says the Zillow economist. “You don't have to waive all your contingencies. You don't have to worry as much about bidding war situations. We're seeing prices falling slightly, and buyers now have negotiating power for the first time in several years.”

“Buyers are really having that ability to breathe and negotiate, which they haven’t had for a while. Buyer's agents should really encourage clients to take their time and think things through. They have the ability to do that now. If clients are truly happy with their purchase, they’ll remember you when it’s time to sell.”

3. Remind worried sellers what a pre-pandemic market looked like.

Takeaway for agents: It can be nearsighted to look at conditions relative to how they were six months ago but ignore how they were three years ago,” says Bachaud.

“It’s important to help sellers understand the world is not ending. Homes taking a few weeks to sell, or sellers cutting prices in late summer, are not abnormal in terms of the big picture. It's okay if your house sits on the market for three weeks. It's okay if you don’t get 20 offers. You only need one buyer. Just take a deep breath and let go of the pandemic frenzied market. The last few years were an insane time in residential housing. That’s behind us now.”