On The Market

231: With Slow Spring Homebuying, Zillow Predicts Price Drops in 2025

Jul 4, 2024

Dr. Skylar Olsen, Chief Economist at Zillow, discusses the forecast of declining home prices in 2025 due to a slow spring homebuying season. She highlights the impact of high mortgage rates on buyers and sellers, predicts potential market corrections, and explores opportunities for real estate investors in different markets.

39:18

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Episode guests

Skylar Olsen

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Episode notes

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Quick takeaways

Zillow predicts a 1.4% drop in home prices from May 2024 to 2025 due to increased inventory levels and demand metrics.

Affordable real estate markets are thriving while traditionally hot markets see price corrections, impacting buyers and sellers.

Deep dives

Market Update with Dr. Skyler Olson

Dr. Skyler Olson from Zillow's economic research team shares an update on the recent spring buying season in the real estate market. The buying season traditionally peaks in April and May, but this year's activity has been impacted by a surge in mortgage rates, leading to fewer listings from existing owners. Despite the slowdown compared to pre-pandemic levels, there has been a 23% improvement from the market's lowest point during the pandemic.

Intro

2min

Analysis of Spring Buying Season and Housing Market Trends

12min

Insights on Real Estate Market Challenges and Opportunities

2min

Zillow's Forecast for a 1% Decline in Housing Prices

7min

Real Estate Market Insights

4min

Real Estate Market Trends and Predictions

11min

Discussion on Interest Rates and Research Sharing

2min

Zillow’s latest housing market forecast shows a decline in home prices over the next year after a very slow spring homebuying season. While spring is traditionally the hottest time of the housing market, with more sellers and buyers hitting the market at once, this year was stunted significantly. Will this trend continue as housing inventory remains at rock-bottom levels, or are things gradually improving, with a return to normalcy in sight? We’ve got Dr. Skylar Olsen, Chief Economist at Zillow, on to share the latest forecast and which markets could be in trouble.

With mortgage rates still hovering around seven percent, homebuyers and sellers are stuck. Sellers don’t want to trade into a more expensive mortgage payment, and buyers can’t afford today’s median home price. As a result, some under-the-radar, affordable real estate markets are seeing home and rent prices increase, while some traditionally hot markets are already seeing price corrections.

Where will the next correction hit, and which markets will have the most opportunity for real estate investors? Skylar explains it all, plus why Zillow updated their recent home price forecast to show a DROP in home values over the next year.

In This Episode We Cover

Zillow’s updated housing market forecast and why they’re predicting prices to drop

The spring homebuying season’s “extra slowdown” and why buying/selling is so stunted

Skylar’s 2025 housing market and mortgage rate predictions

What happens when mortgage rates get cut, and whether this could fire up the housing market again

The real estate markets seeing the most price corrections, plus hot markets Zillow is keeping an eye on

Markets with the strongest rent growth (for single-family AND multifamily investors)

And So Much More!

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