Waiting for the Crash? We’ve Already Had It.

The real estate market has definitely corrected since the interest rate spike of 2022. So why have home prices continued to grow steadily—and, in some communities, actually thrive? It comes back to inventory. Many homeowners are locked into mortgage rates around 3% or even lower, making them understandably reluctant to move. That has kept inventory tighter than we would typically expect and put continued pressure on home prices. Buyers have essentially been hit from both sides: higher interest rates have dramatically increased monthly payments, while home prices haven’t fallen enough to offset them.

So what are we seeing right now? A seasonal slowdown, higher-rate fatigue and another dose of economic uncertainty. Homes are absolutely still selling. But the homes getting the strongest results are damn near perfect: prepared well, priced correctly and photographed magnificently.

For sellers, getting an offer can feel like the finish line. We’re moving! Not so fast. Getting into escrow is only half the battle these days. Buyers are coming to terms with a very large monthly payment, and then comes the dreaded repair request—which, in my experience, has ballooned in recent years. My theory? Buyers have more information at their fingertips than ever before, including AI tools that can turn every inspection finding into a potentially terrifying rabbit hole. More information can be helpful, but it can also amplify concerns that might once have been handled with a simple conversation with an inspector or contractor. It’s almost as much work to stay in escrow as it is to get into escrow these days.

And yes, there’s some overpricing going on. Sometimes, I have to admit, even I’m guilty of it. Pricing is particularly tough when inventory is low and there simply aren’t enough recent comparable sales. But what I’ve seen repeatedly is that even a 2% price adjustment can jog buyers off the fence. It doesn’t sound like much, but to a buyer who has been stalking a house online, saving it, viewing the photos and waiting, it can be the difference between admiring the house and putting pen to paper.

So, is it a buyer’s market or a seller’s market? Strangely, I’d say it’s a juxtaposition of both. Not particularly helpful, I know. Buyers have more negotiating power than they did during the frenzy years. They’re asking for repairs, credits and concessions, and they’re willing to walk away. At the same time, sellers are often able to hold prices higher than you might expect given today’s borrowing costs and buyer demand—for one simple reason: buyers still don’t have enough choices.

And that’s why the headlines don’t tell the whole story. In North County San Diego, we have pockets where prices have performed remarkably well and others that have lagged. One neighborhood can behave completely differently from another just a few miles away. In this market, local knowledge matters more than ever—whether you’re buying, selling or trying to decide if you should do anything at all.

Because if you’ve been sitting on the sidelines waiting for the big real estate crash, you may have missed it.

This is the way the market crashes. Not with a bang.