Home Sellers, Wake Up: Record Listings Mean You Need a Smarter Game Plan

The biggest news in the world of real estate involves something that few people expected to see in the Summer of 2025: the inventory of homes for sale in the United States has ballooned to a staggering $698 billion, marking the highest figure that the market has seen in the last five years.

When compared to a year ago, this figure represents an increase of 20.3%. While it’s certainly true that home prices are still high, the reason for this increase points to the potential resolution of an inventory crisis that has brought the market to a near screeching halt over the last few years.

According to Daryl Fairweather, the chief economist at Redfin, "All these homes are listed for really high prices, which is why they are sitting on the market. But buyers can't afford at these high prices, which is why they're backing off of the market.”

Whether you’re a homebuyer who has been waiting for an uptick in inventory or you’re planning on selling your home, this sudden real estate inventory surge is going to impact you. Today, find out more about what the housing inventory record means for those who are trying to craft a home selling strategy or those who want to get the best price possible.

Why Inventory Is So High, And What It Means

On a national scale, the number of homes on the market is higher than it's been in five years. In April 2025, the housing market will have 16.7% more homes than it did in April 2024. According to the National Association of Realtors (NAR), the number of sellers is roughly 500,000 higher than the number of buyers.

At its core, this surge is being driven by what’s been labeled as the mortgage-lock-in effect. A few years back, many homeowners refinanced their mortgages to get access to rates that were lower than 3%. However, rates have risen, and multiple other economic factors are in play that weren’t so common in the early 2020s. This had led some homeowners to try to sell their homes.

This market shift presents homebuyers with an opportunity that they haven’t had in the last three years. With inventory increasing, buyers are no longer rushing to the negotiating table to make offers that are higher than the asking price, nor are they willing to waive contingencies like they were as recently as the summer of 2024.

However, not all sellers have been willing to recognize the shift. In fact, some of the most expensive homes on the market have been sitting there for months on end, as sellers seem to still believe that they can get the asking prices that were common in 2021 and 2022. While this is partially responsible for the staggering $698 billion in homes for sale, it’s certainly not the only reason.

Sellers Cannot Continue Relying on Scarcity

Every industry relies on the principle of supply and demand, but it could be argued that the old economic concept impacts real estate more than any other. If you’re looking for a home in a particular city, and there is only one available, the owner of that home can put a much higher asking price on their property than they would be able to do if there were 99 other homes for sale.

When 10 buyers all want to move to that city where only one home is on the market, the seller has all the control. When 10 homebuyers make an offer on the same home, they have to do something to make their offer stand out. Whether that’s offering significantly more than the asking price, waiving home inspection clauses, or taking other steps to make their offer more appealing, scarcity puts the seller in complete control of the transaction.

While that’s a much smaller example of the market, the principle has been in play for the last few years. However, scarcity isn’t the problem today that it was a year or so ago. Buyers now have more options when they look for homes, which allows them to make lower offers while also enjoying the protection that comes with contract clauses.

For sellers, this means that overpricing can prove to be a costly mistake. According to Zillow, buyers should lower their asking price when their home has been on the market for two weeks without any acceptable offers. This means that every day that a home is on the market, its value drops incrementally. For the last few years, sellers have been able to list their homes and adjust their asking price as a last resort. That’s not possible in today’s market, where more homes are on the market, and buyers have options.

How Sellers Must Adapt

The selling strategies of 2022 and 2023 are not the home selling strategy in 2025. In fact, the methods that sellers used in 2024 are quickly becoming outdated. With that in mind, if you’re currently trying to sell your home, or you plan on listing it for the annual summer rush that’s quickly approaching, you need to know how to adjust. Ultimately, successfully selling your home is going to require you to be a bit more proactive than you would’ve had to be only 12 months ago.

This begins by setting a realistic asking price. If you’re working with a realtor, they should be able to offer you some guidance on this, but the choice is ultimately yours. If you’re using the For Sale By Owner (FSBO) approach, you’ll need to take a look at what’s happening in your local market and set a price accordingly. If your price is out of sync with the market, it won’t just sit for a while; it may develop a stigma as an overpriced property that buyers don’t even want to consider.

Next, you need to invest in the presentation of your home to potential buyers. Over the last few years, things like professional photography, staging, and even updates became less important because there was such an inventory shortage. However, today, you need your home to make an impact, even before potential buyers show up for an in-person tour.

Once your home is listed, be prepared to be flexible when it comes to showings. Your home isn’t the only one in the area being sold, and buyers will want to see homes when it’s convenient for them. You’ll also need to be prepared to be willing to negotiate. You don’t hold all the cards like you would have a year ago, so some closing concessions and other protections for the buyer can go a long way. Of course, these tips are even more important if you need to sell your home quickly.

The Evolution of the Buyer’s Advantage

Even though there is a real estate inventory surge, you may find that asking prices are still higher than they were in the past. In fact, prices in June 2025 are 1.4% higher than they were in April 2025. That tells us something important about the current market. While supply is up, affordability is still a big question. Because of this, the market is still in a bit of a sluggish state.

On the surface, that seems problematic, but depending on where you’re at on your homebuying journey, this could be good news for you. If you’ve already been preapproved for a mortgage, even though mortgage rates remain elevated, you may have more control than you would have had earlier in the year. Buyers who are actively in the market right now face less competition, which gives them the chance to negotiate hard.

This shift is not being felt evenly across the nation. For instance, in Indianapolis, Indiana, the supply-to-demand imbalance hovers around 21%. Market studies in Indy show that buyers are a bit savvier, and sellers are quickly becoming more realistic about ongoing trends. Conversely, in coastal markets, such as Los Angeles and Miami, inventory is still tight, even though buyers continue to flock to those areas.

The Big Picture: Strategic Discipline Wins

Ultimately, the housing market is changing for the first time in years. While many people assume that things shifting toward a seller-friendly model is bad news for sellers, that may not be the case at all. Instead, the balance that is currently being reached creates a market in which buyers and sellers should be able to find fair transactions that set them up for financial success. The way to achieve that success, no matter which side of the table you’re on, is to be strategic in every decision that you make.