According to the National Association of Realtors, home sales barely rose to $417,700 in April at a seasonally adjusted annual rate of 4.02 million units, up just 0.2% from March and flat year-over-year, while the median existing home price rose to $417,700, marking the 34th consecutive month of year-over-year increases. Inventory also increased, increasing by 5.8% from March to 1.47 million units.
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This data indicates that the market is fatigued rather than frozen. Shoppers are showing up, they just aren’t pulling the trigger.
James Harris, CEO of Breezy and formerly of Million Dollar Listing, spoke with Inman about what the NAR numbers mean on the ground and why the answers vary so much depending on which market and which buyer you’re talking about.
National numbers mask a fractured market
Harris says the urge to read NAR data as a single national story misses the structural differences that currently shape the market.
“The days when almost every major subway was under construction at the same time are now behind us,” Harris told Inman. “Some markets that saw significant price increases during the pandemic are still navigating affordability issues and overstock, especially in the Sunbelt region and some secondary markets.”
In February, the Case-Shiller Index confirmed that the housing downturn has spread far beyond its Sunbelt origins. Denver, Seattle, Los Angeles, and Washington, D.C., are now the markets with year-over-year price declines, along with Tampa, Phoenix, and Dallas.
Harris expects this trend to continue as a consolidation rather than a crash. Markets with limited supply and sustained long-term demand, particularly New York and parts of the Northeast, are holding up. Everything else is repriced.
“Real estate is becoming more local,” Harris said. “It is no longer possible to paint an entire country with a single stroke.”
Actual appearance of spring buyers
Harris said the buyers doing business this spring are unlikely to be buyers in 2021. They’re patient, they’re cautious, they’re operating with an influence they didn’t have two or three years ago.
“Today’s buyers are just more selective and more patient,” Harris says. “They are analyzing properties much more carefully and negotiating more aggressively than they were two years ago.”
Turnkey properties are leaving the sector, and Harris says buyers are avoiding renovation exposure. Construction costs, permitting delays, and contractor uncertainty are all being factored into purchasing decisions in a way they weren’t in the Crazy Times. Properties that are move-in ready and priced appropriately are still trading rapidly, while all others are stagnant.
At the top end of the market, things change. For wealthy buyers, lifestyle remains the main factor. Features like privacy, security, wellness amenities, and outdoor space continue to command premium prices, but these buyers are largely insulated from the pricing environment that locks other buyers down.
Don’t try to time the market perfectly
With mortgage rates still high, a significant proportion of prospective buyers are sitting on the sidelines, waiting for significant reductions. Harris believes that is a miscalculation.
“If interest rates are significantly lowered, competition is likely to increase quickly,” he said. “Even if interest rates improve slightly, the home itself could end up being more expensive to buy.”
His view on timing is: “Don’t try to optimize.” If the property is suitable and affordable over the long term, buyers tend to lose out if they wait for a slightly better rate.
“Historically, the best opportunities often come during times of uncertainty, not when everyone feels comfortable again,” Harris said.
This advice is in line with one of the most dramatic examples in recent memory. When interest rates fell to historic lows in 2020 and 2021, pent-up demand returned almost immediately, home prices soared, and waiting buyers found themselves in an unexpected bidding war.
The charm of new construction
Along with the NAR data, homebuilder confidence was stronger than expected, but Harris said he wasn’t surprised by the results.
Now, builders have a structural advantage. They can offer lower interest rates, financing incentives, and truly turnkey products in markets where resellers can hardly compete on these terms.
“Builders understand that there remains a severe housing shortage in many parts of the country, and they also know that there is a large group of buyers waiting for the right time to re-enter the market,” Harris said.
The appeal of new construction comes from the weakness of resale. When existing homeowners don’t list because they’re locked into low mortgage rates, the builder is often the only seller with new products and room to negotiate.
What real estate agents work with
For real estate agents, the NAR data confirms what most already feel in the pipeline. In other words, this spring has not delivered the volume increase that the calendar typically promises.
The bifurcation Harris describes creates real strategic complexity. Agents working with entry-level buyers face a highly rate-sensitive customer base that is squeezed by insurance premiums and competing for a thin slice of affordable inventory. Agents in the luxury sector work with cash buyers whose calculations are driven by portfolio management and lifestyle, not monthly payments.
“Luxury buyers are less sensitive to interest rates,” Harris said. “Many people pay in cash or have a lot of liquidity, so their decisions are driven by lifestyle, asset preservation and long-term value.”
Agents who straddle both worlds can price accurately, identify true turnkey properties, and advise buyers on the wait for the perfect rate that has stalled deals in much of the country.
“Quality, reasonably priced real estate is still being traded rapidly,” Harris said.
The same is true in 2021. The difference is that the definition of “correctly” is much stricter.
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