New: 🧠 Market Minds Issue #082

We appreciate each and every one of you for taking the time to read Market Minds. Buckle up and enjoy the free value, and you won’t want to miss some of the weirder listing photos we’ve seen in the house of the week…

Why Pricing Like It’s 2021 Could Cost You in 2025

Supply Now Outpaces Demand

There are now half a million more home listings than active buyers in the U.S. market — the widest gap on record. For the first time in years, leverage is clearly swinging to buyers. Properties that once sparked bidding wars are sitting, price-cut, and collecting dust. Some sellers still think they’re the exception. The data says otherwise.

Pandemic-Era Anchors Are Weighing Sellers Down

Many sellers who bought in 2021 or 2022 are trying to “get their money back,” listing homes at prices the current market can’t support. But buyers aren’t biting. In fact, they’re getting pickier, asking for credits, repairs, and price cuts (and often getting them). Overpricing in this market isn't just a risk; it’s a strategy that can backfire fast.

Buyers Are Back in the Driver’s Seat

Even with more options, economic uncertainty (layoffs, tariffs, policy shifts) is keeping buyers cautious. Mortgage rates may be easing, but that’s not enough to trigger urgency. What it is doing is giving prepared buyers leverage, especially those with approvals and clarity on value.

Timing and Realism Are the New Differentiators

Whether you’re listing or advising clients, speed and sanity matter. Listing sooner (before further softening) and pricing with precision is critical. Sellers clinging to 2021 pricing psychology will miss this window entirely. Buyers, meanwhile, need to negotiate smart and act fast when the right opportunity arises.

The Fixer-Upper Fantasy Is Fading

Buyers Are Choosing Certainty Over Potential

The affordability crisis is changing the buyer’s calculus. Move-in-ready homes are winning because buyers, especially Millennials and Gen Z, aren’t just cash-poor — they’re bandwidth-poor. The days of buying a project and building equity through renovation are being replaced by a deep desire for predictability. Renovation costs have exploded. Construction timelines have ballooned. And mental bandwidth is at a premium. Buyers are paying more to avoid surprises, and the data backs it up: remodeled homes get 26% more shares on Zillow and sell for a 3.7% premium.

The Fixer-Upper Discount Is Real

Fixer-uppers are now selling for 7.3% less than comparable move-in-ready homes. On paper, that sounds like an opportunity. But rising labor costs, inflated material prices, and higher rates on construction loans make that discount vanish quickly. What used to be a “deal” now often becomes a cash drain, especially for first-time buyers with no equity to tap. Flipping is nearly dead unless you’re professional, capitalized, and extremely strategic.

Younger Buyers Are Renting Longer

Today’s buyers have grown up with convenience. Renting longer has conditioned them to expect turnkey homes. They’re not looking to swing hammers; they’re looking for minimal friction. The math supports their behavior: when spread across a 30-year mortgage, paying more up front often costs less than funding a renovation in today’s environment.

If You’re Listing a Fixer, You Need Strategy (Not Hope)
The first 7–10 days on the market matter most. Price it too high and you lose credibility and eventually, money. Sellers of fixer-uppers need to consider a pre-sale inspection, offer concessions for upgrades, and understand the value of timing (homes sell for 1.6% more in late May). Selling off-market or overestimating what buyers are willing to take on? That’s how listings linger.

Why the Fed Isn’t Flinching Yet

Labor Market Isn’t Weak Enough… Yet

Despite some softening, the labor market isn’t showing enough stress to justify a rate cut. May’s jobs report added 139,000 positions — underwhelming, but not alarming. The unemployment rate held at 4.2%, and while prior months saw downward revisions (-95,000), this isn’t the kind of deterioration the Fed needs to see before shifting its stance. Translation: don’t expect rate relief just yet.

Residential Construction Holding Steady

This is a critical signal for real estate. Residential construction employment showed resilience with positive revisions, bucking the typical early-recession pattern. Historically, when this segment cracks, it precedes a broader downturn. For now, it’s showing that the real estate cycle isn’t in freefall but may be approaching a slower gear.

Unemployment Pressure Is Building Quietly

If the jobless rate creeps up even slightly, it could force the Fed’s hand. A move from 4.2% to 4.3% would mark the highest level since 2021. Some Fed officials are already reconsidering their unemployment targets due to added economic pressure from tariffs. Still, the Fed’s bias remains: wait, watch, and only act if the job market deteriorates faster.

The Fed’s Message Is Clear: No Panic, Just Patience

Chair Powell isn’t reacting to political pressure, including Trump’s public call for a 1% cut. Instead, the Fed wants unmistakable labor market weakness before it pivots. The risk? If economic shocks stack up (like the 7,000 layoffs at Procter & Gamble), the Fed might again be late to act. But as of now, no rate cuts are coming until the data forces their hand.

Weird, or Genius?

This Redwood City, CA home listed for $2.195M has some pretty unique listing photos. Do you consider these weird or a genius marketing strategy in today’s market?

Check it out 👇

TL;DR (Too Long; Didn’t Read)

The housing market has entered a new reality — and pricing like it’s still 2021 is a fast track to being left behind. There are now over 500,000 more listings than buyers, and inflated list prices based on pandemic-era expectations are sitting untouched. Buyers, cautious yet empowered, are demanding concessions and skipping fixer-uppers entirely in favor of turnkey homes that offer certainty and fewer surprises. Meanwhile, the Fed is standing firm on rates, citing a labor market that’s softening but not weak enough to justify cuts — a signal that sellers and investors need to act decisively, not optimistically.

Have a great weekend - we’ll see you next Saturday.

Cheers 🍻

-Market Minds Team