Collins: Slower spring housing market is an opportunity for buyers

The highly anticipated 2025 spring housing market has not been nearly as robust as many have expected it to be.

Local inventory is up nearly 40%, and sellers are more willing than ever to negotiate. With interest near a 25-year average, buyers have a unique opportunity to successfully secure their dream home in what is usually an ultra-competitive market.

Clint Moore, a real estate agent with Intero, shares what he feels are a few of the major hurdles to the spring market.

“Confusion over economic policy and instability in the stock market has adversely impacted the market to a degree,” Moore said. “Whether their downpayment has shrunk considerably because of declining stock values or they aren’t as confident about job security, many buyers are feeling jittery.”

Michelle Perry, a real estate agent with Sereno, also notes the turmoil in the stock market earlier this spring led to volatility on the mortgage rate side as well.

“It’s been a rollercoaster, especially for first-time home buyers. Every penny counts for them,” Perry said. “We have a wonderful small family ready to buy. They’re utilizing their retirement accounts to get to that first step of 3.5% down on an FHA loan. When we started, they were looking at a 6.25% mortgage rate. Their payment was roughly $5,800 for an $800,000 townhome. By the time we found one a couple of weeks later, rates were at 7.25% which increased their payment another $500 that they couldn’t afford or qualify for.”

Fortunately, as May concludes it seems like mortgage rates have stabilized somewhat.

For sellers, all this uncertainty in the market has forced them to reset their expectations. Price reductions and contingent offers are more of the norm now as the market recalibrates.

“One of the biggest challenges is sellers with unrealistic expectations,” Moore said. “Now more than ever, listing agents need to have frank conversations with their sellers. If the listing agreement was signed in January or February, pricing strategies and sales expectations have changed dramatically.”

Sellers are used to hearing about multiple offers driving the final sales price up well above the listing price. That is not the case for most of the market. The exception is the luxury market where homes cost upward of $5 million. Compass Manager and Vice President Dave Walsh said luxury homes, specifically those in proximity to Stanford University, are “red hot” — up nearly 80% year over year.  Cities like Palo Alto and Los Altos are seeing median home prices of $4.2 million and $5.7 million, respectively.

“With more homes on the market, buyers have been more critical of a home’s condition, location and conveniences,” 2025 Santa Clara County Association of Realtors President-Elect Michael Gordon said.

Well-maintained and appropriately priced homes continue to attract strong interest.

Traditionally it has been a seller’s market driven by low inventory and high interest from buyers. The slower spring market has begun to swing the pendulum resulting in a more balanced market. This window of opportunity will not last long for buyers. Experts expect the normal surge in sales to be pushed back into the early summer months. The momentary rise in inventory offers buyers a broader selection of properties, potentially reducing competition and easing bidding wars.

“Less competition means you have more room to negotiate,” Perry said. “Remember, the mortgage rate can always be changed, but not the price you pay. Your property taxes are driven by the sales price so ultimately, you’re saving in the long run.”

No matter what is going on in the market, Gordon said with preparation and the proper strategy, “the right home that is meant to be, will be yours.”

“We have clients who have been patiently preparing the last one to four years and are now purchasing homes that were previously beyond their budget,” Gordon said.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. Contact Neil at [email protected].