Why Home Sales Are CRASHING and What It Means For You

Right now, the U.S. housing market is coming to a standstill and a lot of sellers are waiting and waiting and waiting without an offer on their home, and some of them are starting to bleed out financially. National Association of Realtors just came out with their latest existing home sales report, and there's some interesting stuff to unpack in here. First things first is that existing home sales continue to decline, guys, continue to decline. It has already been declining, and it is declining even further now. Total existing home sales, which includes single-family homes, townhomes, and condominiums and co-ops fell 5.9% from February to March, and is now at a seasonally adjusted rate of $4.02 million as of March of 2025. And the year-over-year sales figures are now down 2.4% in 2024, was basically the worst year we've seen in the housing market in the past 30 years, at just a little over 4 million homes sold, about 4.1, 4.2 million homes sold in 2024. Well, if you annualize the March 2025 data, that puts us on track to only have 4.02 million homes sold throughout the year, which means this will be even worse than last year. And while this is happening, the inventory is heading upwards on the market. At the end of March, we had 1.33 million homes for sale, which is up 8.1% from February, and it's up a whopping 19.8% from March of 2024, so a 20% increase in inventory in just one year, guys. Meanwhile, the sales are down 2.4% in one year. So this is the perfect scenario that is building right now for homebuyers. People who have been patient, your patience is literally being rewarded by the month as the inventory creeps up and the sales continue to decline. We also have a four-month supply of inventory on the market, which technically is not a buyer's market. However, with interest rates where they are, and with the economy in the tank, four months of inventory right now probably is a buyer's market because you're seeing a lot of buyers able to wait and see what happens, get deals, and actually get a home for less than what the seller is asking in many cases. But then there's the strange question about, well, if all of this is happening then, Michael, why is the median home price going up? Because part of this report still says that the median existing home price for all housing types is at $403,700, which is up 2.7% from one year ago. Why is the price going up if all of the market reactions to what's happening are heading down? Well, I'm going to dig into that and show you guys why this is happening. Homes that are in the higher price range are actually selling at a much higher rate than homes in the lower price range. And this can be illustrated by looking at this table that's directly from the National Association of Realtors. This shows you the percent change in sales from one year ago. And if you look all the way to the right, okay, at the $1 million plus category, the numbers are tremendous. Up 25% in the Northeast, up 22% in the Midwest, 14% in the South, et cetera, 14% nationwide up. If you look all the way at the other side of the spectrum here, homes that are in the zero to 100K range are down tremendously. The sales of those homes are down 14.5% year over year, 16% year over year, 13% year over year, and 15% nationwide. The median home price is calculated based on the homes that are selling in the middle. Well, the middle of this category is the $250,000 to $500,000 range. And you can see by looking straight down the middle here that the sales on those homes in that price range, which is basically covering 90% of most American cities and towns, 250 to 500K range, is basically flat. And the Northeast, it actually fell 2%, only went up 1.5% in the Midwest. In the South, it was basically flat. In the West, it was down. And in the US, it's a 0% change, guys, which means that people are just not buying homes at the lower price points nearly as much. Even in the 100 to 250K, sales for all four regions of the country are down from where they were a year ago. And they're up tremendously on the homes that are 500K and up. The lion's share of the sales that are taking place right now between last year and this year are well over half a million dollars or even over a million dollars. So that explains why the median home price continues to climb because it keeps shifting that middle because the median is right in the middle. If you have 0 to 100, median would be 50, right? But if you keep shifting the scale more and more to the right, what you're going to find is the median is going to shift that way as well. And now the median is no longer 50. Now maybe it's 60 or 70. So nobody should be surprised when you see the median home price going up right now when the data straight from National Association of Realtors is telling you why that's happening. It's not because everybody's home is magically going up in value. That is not what is happening. It's just that higher end homes that are $500,000 and up are selling like hotcakes right now and homes below half a million dollars are not. And to further illustrate that point, take a look at this table from the National Association of Realtors. Median days on the market, okay, throughout the entire country. Which category has the lowest days on the market? The $1 million plus range. How is that possible? In the second lowest category is the second most expensive category. 21 days on the market from $750K to $1 million. In fact, the longest days on the market are the properties that are $0-$100K at 30 days on the market, guys. So explain that. What does that tell you? It tells you that people who have money, the wealthy right now, are buying up homes because inflation is out of control. Look at the price of gold. That just tells you everything you need to know about inflation right now. And they are putting their money into safe haven assets like real estate. That's what's happening. So it makes sense to see this trend play out in the data. And one other interesting finding of this report from National Association of Realtors is the difference between condo sales and single family home sales. Because I've talked a lot about the current condo crisis and how much the HOA fees and special assessments have skyrocketed. There's a glut of inventory here for sale now, especially in South Florida, of these condos. So you would think that condo sales would actually be crashing more than single family home sales, but it turns out that's actually not the case. Because single family home sales are down 6.4% year over year, and condo sales, which includes co-ops, are down 5% year over year. So they're both on the decline, but actually the single family home sales are declining more than condo sales, which is kind of surprising given the situation with condos right now. And you can see that the amount of inventory just keeps creeping up by this bar chart here, even just over the past year, guys. It is going up. And this is good news for anybody who's looking to buy a house right now. It means you can be more patient than ever. It means you can offer less than you could in the past five years. And it means you have more choices, which is the best part. You're not forced into buying a house you really don't like, but you kind of need to buy one right now. And don't forget, if you need to buy or sell a house anywhere in the country, I got you covered. I can set you up with a real estate agent 100% for free. All you got to do is use the link down in the description below. Fill out the form real quick, and somebody from my team will contact you ASAP. Now the data shows us that wealthy people are pouring their money into real estate right now. And pretty much everybody who's not wealthy is kind of just sitting on the sidelines for the most part. And let's face it, even to buy a half a million dollar home, you're not technically wealthy, but you got to make like 140K a year. Your household income needs to be very high to be able to afford a half a million dollar home. So you're not really wealthy, but definitely upper middle class. And this difference in demographics also translates over into selling experiences right now, because you see the data when it comes to buying. So that translates into selling as well. Homes are sitting on the market longer than before at 36 days on the market compared to 33 days on the market in March of 2024. And you have a 13 to 14% cancellation rate on signed contracts for buyers, which was only 10% a year ago. So more people are backing out of deals. And at the same time, homeowners are waiting longer than ever for people to come and buy their home. And guess what? Some people can afford to wait, and some people can't. Surprise, surprise. This news story talked to this guy in California that has a house for sale for about $3 million and it's not selling. It's been sitting on the market for quite some time. Well, I wonder why. How many people can afford a $3 million house? You see this all the time in here in Miami when I'm walking through the neighborhood, like there are so many homes for sale that are way above what the average person can afford. And people are shocked that no one buys it. So if you are a wealthy buyer, it's actually a great time to be buying in the sense that a lot of other wealthy buyers are doing the same thing, which is probably going to push up the luxury listing prices. But also you have more choices than ever before because most people can't afford those type of homes. But guess what? These people who own this $3 million home say they're in no rush to sell it. And the only way they're probably going to get it sold is if they just keep doing price reduction after price reduction, which they said they don't want to do. Basically, their quote is, we just don't need to sell badly enough to capitulate, meaning that, yeah, well, as much as we'd like to sell this house, we're not desperate. So we'll just wait. So you have this couple in Phoenix, Arizona, on the flip side, who bought this new house in January of 2025. They listed their old house for sale in February of 2025, and it still hasn't sold. We're coming up on May already. So right now, these people have two mortgages and they're making two payments on everything. They have two mortgages, two homeowners insurance premiums, two HOA fees, two utility bills, everything. And they said this is bleeding them dry. But here's the problem. These people had no clue what was happening in the local market because this is a quote from them. We sold a house in 2020 and we had no problem even with COVID. Oh, well, a lot's changed since 2020. So this guy's been out of the loop for the past five years and thinks that the market is still the same as it was in 2020. That's delusional. And I don't really feel bad when people get themselves in these situations because you're playing with a ton of money here when you're talking about real estate. And if you don't even bother to brush up on the state of the market, then you kind of deserve to lose money. They've already cut the price on the home, hasn't sold. And now they're paying about $6,000 a month between the two different mortgages they pay. And they also have a student loan debt payment that they have to pay as well. And now this guy is saying, well, I think I might need to dive into my financial assets and borrow from my 401k or some of the other assets I have. I think you never would have had to do any of that stuff if you would have just paid attention to YouTube channels like mine or even just done a little bit of research on your market before jumping into buying a new house, not even selling the old one first. That's kind of stupid, guys. And the reason I bring this stuff up is because I don't want people who watch my channel to make these same mistakes. You've heard this story now, then you know that's not a smart thing to do. So you should do your research before buying or selling any type of home. Make sure you know the market, make sure you know what you're getting yourself into, and then act. This quote from Lawrence Young in this whole report is kind of funny because he says, I was hoping that we would begin to see meaningful recovery in sales this year. So far, it's not happening. Well, yeah, no kidding, Lawrence, because a lot of people are aware that the economy is in the dumpster right now. But people like you have been saying that everything is great and home prices keep going up and this magic show is just going to last forever. And then they're shocked when it doesn't. And get this. The home sales were so bad in March that it actually missed Wall Street expectations. And Wall Street expectations even expected home sales to go down, but not by this much. They thought the annualized number was going to be 4.13 million, which is pretty much what we had in 2024. But instead it went down to 4.02 million. But a lot of real estate agents out there are still telling buyers the same thing, like you need to be ready to act and to be ready to make an offer at moments notice on all these properties. And yeah, there might be some markets right now still where properties are selling fast and you got to be ready to act fast. They have an open house on the weekend and by Wednesday they have three or four offers. That is still happening, but that occurrence is rare. And if you live in one of those markets, you probably know it. But I want to show you guys these charts to just give you an idea of how slow home sales are right now. Take a look at these two charts here. This shows you the existing home sales going all the way back to 2005, which was before the last housing crash when they were selling over 7 million homes a year. It was insane, guys, and you can see it came down when we had the crash, but it was still over 4 million homes a year being sold and then gradually picked up until we see that little bit of peak in 2021 there during the pandemic. And now 2024, you can see the amount of homes sold is about 4.1 million homes. But in 2025, they're projecting it's going to be 4.47. But as we know from this March data, it's probably not going to be anywhere near that. It's probably going to be even worse than it was in 2024, which means that we are going to see home sales at levels that were lower than they were even during the last big housing crash, which is pretty insane when you think about it. But realtors are telling people, you know, buyers that are acting fast are still the ones winning the deals. And you need to treat buying a home like your second job. You need to spend all of your free time on buying a house right now. Well, of course, they're going to say that because they want to sell you a house. And this is why part of the advice I want to give here is that you should not be desperate to buy a house. Never put yourself in a situation where you have like a deadline, right? Like, oh, I have to buy a house in the next 60 days or else X, Y or Z will happen. If you do that, you are going to make poor decisions, just like these people in Arizona that are now stuck with two mortgage payments because they acted without thinking first. And I'm going through kind of a list here of things that are realtors are telling their clients to do right now. And one of them is to secure a preapproval to show sellers that you're prepared. I always think you should do that regardless of what's happening in any market. That's a good idea to always have that for yourself. And you know what you can afford to buy. But this is a really bad piece of advice that real estate agents are giving their clients right now. They say, don't get hung up on asking price because they say you probably won't pay asking price for your next house. If there's multiple offers, you might end up paying more. And if the house is sitting, you'll probably pay less. Well, yeah, that's kind of common sense, but that is not a reason not to get caught up on the price, because remember, that is the one thing you can't change after you buy the house is the price, guys. You can change your financing. You can refinance. You can make additions to the house. You can remodel the house. You can do all sorts of things to it. But one thing you can't do is change the price you paid. You are locked into that price forever until you sell. But they want to tell buyers to not get fixated on the price because obviously the prices are absolutely ridiculous right now in many cases, and they want you to feel comfortable with paying those ridiculous prices. And you definitely should not, especially if you're in one of these areas where inventory is rising and price cuts are prevalent. Another thing they're telling buyers to do is potentially even paying for an inspection report up front before even making an offer on a home. Now, this kind of goes back to hot market versus cold market. If you do this, then chances are you are going to be in a very hot market where, you know, there's going to be multiple offers on the house. You've already seen it happen several times with different properties that are similar to that one. Then in that case, maybe it makes sense to do that so you don't have to have an inspection contingency in your contract. That's the idea behind it. But in most normal situations for most normal folks, I would not suggest doing this because an inspection is going to be at least probably three, four hundred dollars in many cases, and you're spending that on the property before you even make an offer. And honestly, it's kind of a sign of desperation, guys. If you're that desperate to buy, then you probably aren't even in the mindset to buy anyways. So you got to think about that. But one piece of advice that real estate agents are giving their clients that I do kind of agree with right now is that if you're in an area that's expanding and it's growing, then maybe you should be looking at new construction because new construction homes right now are just as if not even more affordable than many existing homes. In fact, the price for a brand new home and an existing home is essentially the same right now at around four hundred and three thousand dollars. And traditionally speaking, brand new homes were always at least 10 to 15 percent more expensive, but not anymore. And think about it like this. You're getting a brand new house that no one's ever lived in before. The builder is going to give you a lot of incentives to buy that house that you are not going to get from a traditional home seller. They're going to give you upgrades to the house. They're going to give you possibly a mortgage rate buy down or a permanent reduction in mortgage rates. Some home builders are even giving some people rates in the mid fours in certain cases at a time when everybody else is paying in the mid sixes. That can tremendously lower your payment. And also, if you buy a good new construction house, which you should still get an inspection on before buying, then you can even end up with a home that doesn't need any major maintenance or repairs for at least the first five, maybe even 10 years. So you're paying the same price for a home that you might have to spend a lot of money on upgrading and remodeling versus one that maybe you don't have to touch it for a long time. Obviously, you got to do your research on the area. You got to do your research on the builder, see what other neighbors are saying, especially about the houses in the neighborhood, if it's already kind of half built and people already living there, because that will give you a good indication if you're getting a deal and it will give you a good indication of how well the homes are built, which are kind of the two biggest concerns with buying a new construction property. But people always say all I talk about is gloom and doom, guys. I think a lot of this is very good news right now for people that have been looking to buy a home. It's becoming a better and better time to buy. And it looks like it's just going to continue in that direction, considering we are in the busy, hot season of homes supposed to be selling right now and things aren't selling. It's even worse than last year. So don't make any hasty decisions. Be patient and make sure you're on the lookout for the home that you really want and get it for the price that you think is fair. So if you enjoyed this video, make sure you subscribe to the channel. And if you don't want to wait for my next video to come out, check out this one on the screen right over here, and I'll see you in the next one.