Market shifts are underway, forcing sellers to rethink their strategies
Housing inventory is increasing across many markets, leading to longer listing times and more frequent price reductions as sellers adjust to shifting conditions, according to Real Brokerage Inc.’s February 2025 Agent Survey. Despite a slight dip, agent optimism and transaction growth remain near recent highs.
The survey, which gathered insights from over 500 real estate agents across the US and Canada, found that buyers now have more negotiating power, but affordability remains a key challenge in the housing market.
Market trends and sentiment
Real’s Transaction Growth Index, which measures year-over-year changes in home sales activity, declined to 49.1 in February from 51.3 in January, indicating a slight contraction in transactions. The US sub-index slipped to 49.4 from 50.2, while Canada experienced a sharper decline, falling to 46.2 from 60.5. This marked the first contractionary reading in Canada since August 2024, the report noted.
Meanwhile, the Agent Optimism Index eased to 70.4 in February from 74.0 in January. Despite the decline, nearly half (48%) of surveyed agents reported feeling more optimistic about their local market, while 9% felt more pessimistic.
A gradual shift towards buyer-friendly conditions
Housing market conditions remain balanced overall, but there are signs of growing buyer leverage. In February, 33% of agents described their market as balanced, down from 36% in January, while the share of agents reporting a buyer’s market rose to 33% from 30%. The percentage of agents identifying a seller’s market remained unchanged at 34%.
Affordability remains the most significant challenge for buyers, cited by 53% of agents, though this figure decreased from 61% in January. Economic uncertainty emerged as a rising concern, with 15% of agents pointing to it as the biggest challenge, up from 10% the previous month.
Inventory growth and pricing adjustments
More than half (52%) of surveyed agents reported an increase in housing inventory compared to a year ago. Among them, 15% noted a significant rise, while 37% observed a slight increase. At the same time, 20% of agents reported a decline in inventory levels.
As more homes enter the market, 49% of agents in high-inventory areas are advising sellers to set lower initial listing prices to attract buyers. Additionally, 22% recommend staging or home upgrades, while 12% suggest more frequent price reductions to align with market conditions.
Buyers are also taking advantage of the increased supply, with 45% of agents encouraging clients to negotiate more aggressively. Another 13% suggest buyers take more time to evaluate multiple options before making an offer.
Extended listing times and seller expectations
A significant portion of agents (65%) reported longer selling times compared to a year ago, with 50% observing a slight increase and 15% noting a more substantial rise. Among those seeing longer market times, 41% attributed the trend to unrealistic seller pricing expectations, while 39% pointed to affordability challenges limiting buyer demand.
“Sellers who overprice their homes are facing longer days on market, while those who price competitively or enhance their listings are securing faster sales,” noted Sharran Srivatsaa, president of Real Brokerage.
The Real Brokerage February 2025 Agent Survey was conducted between February 28 and March 11, 2025. The full report is available on Real’s investor relations website.
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