The United States housing market is currently caught in a deep freeze, characterized by a tense standoff between buyers and sellers with vastly different expectations. Leo Pareja, the chief executive of eXp Realty, describes the situation as a fundamental disconnect: sellers are mentally stuck in the boom of 2021, while potential buyers are approaching the market with the caution of the 2008 crash.
This stalemate is contributing to the slowest sales pace seen in three decades, as high home prices and elevated interest rates keep many on the sidelines. The result is a market that hasn't crashed but is simply not moving, creating a complex environment for the more than 82,000 agents Pareja leads and for millions of American families.
Key Takeaways
- The US housing market is experiencing a standoff, with sellers expecting 2021 prices and buyers acting with 2008-level caution.
- National home sales are on track for the slowest pace in 30 years, according to the National Association of Realtors.
- The median sales price for an existing home was $415,200 in September, a 50% increase from September 2019.
- Recent industry lawsuits have changed agent commission structures, aiming for more transparency and negotiation power for consumers.
- Leo Pareja, CEO of eXp Realty, advises that buying still makes sense for those planning to stay in an area for at least 10 years.
The Great Disconnect Between Buyers and Sellers
The core of the current housing market's paralysis lies in a psychological gap. According to Leo Pareja, who has navigated the industry's cycles for over two decades, the two sides of the transaction are living in different realities.
“Some sellers think it’s 2021, and some buyers think it’s 2008,” Pareja stated. “But the reality is it’s neither.”
This difference in perception is fueling the market's stagnation. Sellers, remembering the frantic bidding wars of the recent past, are reluctant to lower their asking prices. They are unwilling to accept that the power dynamic has shifted away from them.
On the other side, buyers are facing significant affordability challenges. High home prices combined with interest rates that remain elevated have pushed monthly mortgage payments to historic highs. This financial pressure, coupled with broader economic uncertainty, makes them hesitant to commit to what they see as inflated prices.
Market by the Numbers
- Median Home Price (Sept.): $415,200
- Price Increase Since 2019: 50%
- Listings Pulled in September: Over 47,000
- Increase in Pulled Listings (YoY): 52%
The data reflects this standoff. In September, sellers removed more than 47,000 listings from the market after failing to receive acceptable offers, a 52% increase from the same month a year prior. This indicates that rather than reducing prices, many homeowners are choosing to wait, hoping for a return to more favorable conditions.
A Hyperlocal and Fragmented Market
While national headlines point to a slowdown, Pareja emphasizes that real estate is now a “hyperlocalized” issue. The experience of a buyer or seller can vary dramatically depending on their city or even neighborhood.
For instance, some markets in Florida are seeing a surge in housing inventory, leading to sharp price corrections. In contrast, other regions across the country continue to experience tight inventory and strong price growth. This fragmentation makes it difficult to apply a one-size-fits-all analysis to the national market.
This complexity is set against a backdrop of major structural changes within the real estate industry itself. A landmark settlement involving the National Association of Realtors has upended the traditional commission model.
Understanding Commission Changes
Historically, a seller's agent and a buyer's agent would split a commission, typically 5-6% of the home's sale price, which was paid by the seller. New rules resulting from a major lawsuit now require more explicit agreements between buyers and their agents about compensation. This encourages consumers to negotiate commission rates and gives them a clearer understanding of the services they are paying for.
Pareja views this move toward transparency as a positive development for consumers. “Now buyers have a better understanding before they see a house about the service their agent will be providing and how much they’ll pay for it,” he explained. This shift empowers buyers and sellers to shop for agents and negotiate better terms.
Navigating the New Landscape
For individuals trying to decide whether to buy or sell, the environment is more complicated than ever. Beyond market dynamics, concerns about the job market, inflation, and the rise of artificial intelligence are making some buyers skittish.
A recent survey by Fannie Mae found that about three-quarters of Americans believe it is a bad time to buy a home. Despite these headwinds, Pareja remains bullish on homeownership as a long-term strategy for wealth creation.
His advice is to focus on the long view. “He advises consumers to consider whether they plan to stay in the same area for at least 10 years,” noting that waiting could be costly as homes tend to appreciate over time. He refers to the standard 30-year mortgage in the U.S. as a “forced savings account” that helps build equity.
The Debate Over Private Listings
Another industry trend adding to the complexity is the push by some brokerages toward more in-house or “pocket” listings, where a property is marketed privately rather than on the public Multiple Listing Service (MLS). Proponents argue this gives sellers a more strategic, phased approach to marketing.
However, Pareja is a strong advocate for maximum exposure. He argues that restricting the number of potential buyers who see a property is rarely in the seller's best interest.
“By and large, what commerce has taught us across the world is that having the most eyeballs on any product is the best way to do it,” Pareja said. “I just don’t understand how anyone can argue that it is better [to restrict] exposure.”
He recounted that in his extensive career, he can count on one hand the number of times a seller had a legitimate reason for a private listing, such as a federal judge with security concerns or a landlord protecting a tenant's privacy. For the vast majority of sellers, the public market offers the best chance to secure the highest possible price.
As the market continues to navigate this period of adjustment, the disconnect between buyer and seller expectations remains the central obstacle. Until one side adjusts its perspective, the great housing market freeze is likely to continue.
