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The Market Is Slowing,
but Not Crashing
What the Market’s Really Doing Right Now
Prices aren’t tanking, but they’re not rising either. Here’s what you need to know about this “slow burn” shift and how to interpret what’s really happening with values today.
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“Some areas are leveling off. Others are trending lower. But fast drops? Not so much.”
Flat or Falling Prices? It Depends
The current housing market isn’t collapsing; it’s cooling slowly. We’re seeing some softening in prices, but it hasn’t been a sharp or dramatic shift like the headlines sometimes suggest. Think of it more like a gradual fade than a sudden drop. It’s worth looking closer to understand what this means.
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To be clear, different parts of the market are reacting differently. While the general trend is a slow cooling, certain segments like condos are seeing more pronounced effects. And in the weeks ahead, we’ll take a deeper look at how newly built homes are performing, since they’re showing larger declines in some areas.
Price direction right now is nuanced. In some neighborhoods, prices are stable. In others, they’ve clearly dipped. As an appraiser, I’ve recently been checking the “declining” box on more reports, but not across the board. Graphs show this subtle change. For instance, in areas like Oak Park, the pattern of recent sales shows a gentle downward slope.
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While I’ll be updating regional trends soon, today’s focus is on scatter graphs, which some love and others avoid. Either way, they reveal a lot when read closely.
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Condos Showing More Obvious Weakness
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Some condo and townhome communities are where price drops are easier to spot. Not every project is struggling, but the trend is clearer in certain developments. Rising HOA fees, especially driven by insurance costs, may be part of the issue. Add in limited outdoor space and shifting buyer preferences, and it makes sense. While California’s new 2025 balcony law (SB 326) might become a factor, this cooling trend began before it took effect.
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Cancellations for condos are also happening more often than for single-family homes. Detached properties, while not untouched, are still performing better than in 2019.
The Market Online vs. In Real Life
Right now, there’s a wide gap between online doom-and-gloom predictions and what’s happening on the ground. Yes, the market has cooled. But it hasn’t nosedived. Prices have dipped slightly, not drastically. Could it shift more quickly in the future? Sure. But today, we’re still in slow-motion mode.
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Flat in Some Places, Declining in Others
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The truth is, market shifts are hard to identify in real time. Some areas feel flat, while others show more obvious downward momentum. Comps don’t always give instant answers either. There’s always a delay before the data reflects new trends. Reading the market takes time and nuance, not just a glance at a few sales.
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Why This Isn’t Like 2007
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Let’s not mistake this slow burn for a replay of 2007. Back then, inventory was nearly double today’s levels. Price drops were fast and dramatic. That’s not what’s happening now. In fact, fewer sellers have listed their homes in the past couple of months, which has kept inventory tight. Supply and demand remain closely linked, and both are playing a role in how the market is evolving.
How to Spot What’s Changing
If you want to understand today’s market, compare sold prices with what’s happening in the active and pending listings. Often, price softening first shows up in lower pending contracts long before it’s obvious in scatter graphs. And remember, don’t rely on a single example. Look for a pattern. Broad trends are more reliable than one-off cases.
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Sometimes you’ll need to pull comps from nearby neighborhoods to get a clearer picture, especially with fewer sales available. On a wider level, county and regional numbers are hovering slightly below where they were a year ago. That doesn't apply to every zip code or property type, but in many areas, the market genuinely feels a bit softer.
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For now, downward adjustments on appraisals are generally modest. The change is happening, just slowly. And that pace matters. As we continue into the year, we’ll be watching how seller behavior, buyer sentiment, and mortgage rates play their part. The story is still unfolding.
In This Arcticle
Discover why this market feels different from the past, how to spot subtle pricing changes, and why condos and other segments are feeling the pressure faster than others.