Redfin’s latest housing report offers a startling stat: There are 500,000 more resale homes on the market nationwide than the buyer pool can absorb. That should logically tip the scales into solid “buyer’s market” territory. And yet… home prices haven’t dropped the way you might expect. In fact, many markets are still seeing price increases. So, what’s going on?
The short answer: It’s complicated.
Affordability remains the biggest hurdle for today’s buyers, thanks to high interest rates and the still-inflated post-pandemic prices of 2021-2022. But even though inventory is rising, those homes aren’t flying off the shelves because fewer buyers are financially positioned to act – especially first-timers.
New construction might seem like a solution and, in many parts of the country, buyers are giving it a serious look. Why? Big homebuilder companies can offer incentives that resale sellers simply can’t match. Some are offering financing at interest rates a full point or more below the market average through their in-house lenders. That’s appealing.
But here’s the catch: New construction homes are expensive to build. In fact, 20 to 25 percent of their price is often made up of pre-construction costs alone – fees, taxes, permits and regulatory expenses before a single shovel hits dirt. That baked-in cost keeps prices high and limits room for negotiation.
In mountain towns like ours – Crestline, Lake Arrowhead, Running Springs, Big Bear – new construction is rare, unless it’s a custom build on a private lot. That means our market is primarily resale inventory, and the dynamics are different.
So, what can today’s would-be buyers do?
First, understand that sellers are starting to price more realistically, especially on homes that have lingered longer than 30 to 60 days. Look for homes that have had price reductions or show signs of being over-improved for the area. That’s where the wiggle room often is.
Second, work with a buyer’s agent who’s local, experienced and proactive. I can’t stress this enough. In a market like ours, where every neighborhood has its own microclimate and quirks, having a sharp advocate in your corner can mean the difference between a missed opportunity and a smart buy.
Third, get crystal-clear on your monthly budget – not just what you can spend, but what you’re comfortable spending. Today’s market rewards buyers who are pre-approved, realistic and ready to act quickly when the right home appears.
Last, consider properties that need some TLC. Not every home is HGTV-ready, but that might work in your favor. A bit of vision – and sweat equity – can go a long way in today’s market.
Bottom line: Prices aren’t dropping because costs are still high, and sellers are holding firm where they can. But that doesn’t mean opportunity isn’t out there. You just have to know where (and how) to look. And around here, that’s my specialty.
Theresa Grant is a real estate broker and columnist covering Lake Arrowhead, Crestline, Running Springs and the surrounding mountain communities. Reach her at (909) 442-1345, visit www.HomesInLakeArrowhead.com and follow her on social media, @theresagrantrealtor. Theresa is a Broker Associate with REAL Broker Technologies. DRE#01202881.
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