Housing Market Flips to STRONG Buyer’s Market: What We’re Buying Now

TL;DR

The U.S. housing market has shifted toward buyers, giving real estate investors more supply, less competition, and greater leverage with motivated sellers. Active listings are up roughly 35–37% year over year, and buyers may negotiate below list price, but high near-term construction and uncertain interest rates still affect potential returns. Read on for Michael Zuber and Scott Trench’s criteria for identifying worthwhile deals.

Transcript

Congratulations. The data says it's a buyer market for US real [Applause] estate. Welcome to the Bigger Pockets podcast. I'm Scott Trench, CEO of Bigger Pockets and co-host of the Bigger Pockets Money Podcast. I'm filling in for Dave Meyer today as a guest host of the Bigger Pockets real estate podcast. And that wonderful gentleman congratulating y... Read More

Key Insights

• The U.S. real estate market has transitioned into a buyer's market, providing more opportunities for investors due to increased inventory and decreased competition.
• Current macroeconomic factors, including interest rates and tariffs, are influencing the real estate market, creating a favorable environment for buyers.
• Investors can benefit from negotiating with motivated sellers, often securing properties below list price with additional concessions.
• Supply is increasing significantly, with active listings up by 35-37% year-on-year, creating more options for buyers.
• Interest rates remain a critical factor, with potential risks of near-term increases affecting mortgage rates and buyer decisions.
• Demand dynamics are unpredictable, with varying trends across different regions, influencing market conditions.
• BiggerPockets has launched a new tool, BiggerDeals, to help investors find cash-flowing properties efficiently by providing estimated cash flow and cap rate data.
• Investors are encouraged to focus on their specific buy box criteria to identify great deals that meet their investment goals.

Questions & Answers

Q: Why has the U.S. housing market shifted toward buyers?

Homeowner demand is falling, some buyers are canceling contracts after failing to lock interest rates, and sellers are becoming nervous. At the same time, active listings are up roughly 35–37% year over year, giving buyers more supply and less competition.

Q: What advantages does the buyer’s market offer real estate investors?

Michael Zuber identifies three favorable conditions: less competition, more supply, and more motivated sellers. Together, these conditions give investors more opportunities to negotiate and create deals instead of simply accepting list prices.

Q: How far below list price might an investor negotiate?

Zuber says a motivated seller may accept a price that is 10%, 20%, or even 30% below the list price. The potential discount depends on finding a seller with enough motivation to negotiate.

Q: Should investors buy properties when interest rates are high?

Zuber says the cost of capital matters less when every buyer faces roughly the same cost. He runs each deal using 30-year fixed-rate debt and buys only properties that produce cash flow from day one; if none qualify, he buys nothing.

Q: What factors determine near-term real estate investment returns?

Scott Trench highlights three factors: supply, interest rates, and demand. He defines supply partly through new construction, which he says is peaking in Q2 2025 and should slow dramatically during the second half of the year.

Q: How could high housing supply affect prices and rents?

Trench says near-term supply is very high because of new construction reaching the market. All else being equal, that level of supply should push prices and rents down.

Q: Why are interest rates a major uncertainty for real estate investors?

Trench describes interest rates as a wild card and says investors need to form an opinion about them. His view is that there is a significant threat of near-term rate increases, although he acknowledges that any forecast may prove wrong.

Q: What deals are Michael Zuber and Scott Trench looking for now?

They focus on opportunities created by reduced competition, greater supply, and motivated sellers. Zuber specifically looks for great deals that cash flow from day one under 30-year fixed-rate financing, while the episode also examines recent major transactions from both hosts’ personal portfolios.

Summary & Key Takeaways

• The real estate market has shifted to a buyer's market, with increased inventory and decreased competition, providing new opportunities for investors. Macro factors like interest rates and tariffs play a significant role in shaping current market conditions.

• Investors are encouraged to negotiate with motivated sellers to secure properties below list price, taking advantage of the current market dynamics. BiggerPockets' new tool, BiggerDeals, aids in identifying cash-flowing properties efficiently.

• Supply is up significantly, and interest rates remain a wild card with potential increases. Demand varies by region, influencing market conditions. Investors should focus on their buy box criteria to capitalize on the buyer's market.