Real Estate Market May Be Moving Toward a Better Balance

Real estate is a subject that matters to nearly every Westport resident. For many families, a home is their largest asset, so it is only natural to wonder where the market stands and where it may be heading.

The KMS Team at Compass shares a few observations.

Since 2020, sellers have largely held the advantage, with homes drawing multiple offers within days, escalation clauses becoming common and buyers often waiving inspections.

In recent months, however, that pace has started to soften. Some properties are staying on the market a bit longer, buyers are pausing before making offers and price reductions have become more common. Not every listing is attracting immediate attention.

That said, this is not a market slump, and it is still not truly a buyer’s market.

Westport remains highly desirable, and homes that are well priced and in solid condition continue to move. What appears to be emerging is the early stage of a healthier balance, one in which both buyers and sellers have a fairer position.

Several factors may be contributing to the change. Mortgage rates have been edging higher again, which tends to make buyers more cautious.

There is also a broader sense of uncertainty about the economy, which historically leads people to hesitate rather than act quickly. Some buyers are waiting for conditions to settle, while some sellers are questioning whether now is the right time to list.

New 4-bedroom construction at 16 Westport Avenue by Compo Beach offers eco-conscious design, a rooftop deck and heated spa. It’s listed for $6.495 million.

There is no reason for alarm. Real estate moves in cycles, and after such a prolonged stretch of intensity, a modest cooling-off period is normal and perhaps overdue. It will take time for the numbers to fully reflect the shift.

Still, the urge to “wait and see” often works against buyers. It may feel careful, but it is often just hesitation disguised as a plan. Many who delay end up regretting it.

• The crowd often returns at once. When buyers step back, they usually come back together, which can mean stronger competition, higher prices and fewer options.
• Conditions can improve, but they can also worsen. Holding out for a better deal is a bit like waiting for a bigger discount on an item that may sell out before you return.
• Rates may remain elevated. If inflation stays sticky, borrowing costs may too, and a $1 million home could cost about $1.05 million a year later. If rates fall, more buyers may enter the market and push prices up faster.
• Everyone needs a place to live. Rent prices are not falling in most areas, and each rent payment helps build someone else’s equity.
• Qualification matters as much as the rate. Income and credit can look strong now, but circumstances can change. If rates drop later, refinancing remains an option.
• Most buyers are planning for the long term. People typically stay in a home for seven to 12 years or longer, and over that horizon, perfectly timing the market rarely makes a big difference.
• There is usually still an entry point. Some buyers choose a less expensive home that needs work to offset higher rates. When rates ease, they can refinance and renovate while continuing to build equity.

This 3-bedroom, 3-bathroom house at 280 Main Street is listed for $1.199 million.

Would a lower rate actually mean a lower overall cost? If prices keep rising, perhaps not. Consider an $800,000 home with 20% down, comparing a purchase now with waiting a year for a half-point rate drop while prices rise 5%:

Even with the lower rate, the buyer who waits brings $8,000 more to closing, borrows $32,000 more and ends up with nearly the same monthly payment, while losing a year of equity growth.

For buyers, this may be one of the most favorable stretches in years. There is more time to think, more room to negotiate and less competition than there has been since 2020. It is a smart time to get pre-approved and begin the search with a clear plan.

For sellers, Westport demand remains solid and home values are still healthy. The key difference now is that presentation and pricing matter even more.

Homes that are well prepared and priced correctly from the outset are still selling well. Properties that are priced too aggressively are more likely to linger and may ultimately bring in less. Strategy matters.

The best time to buy or sell is when the home, the numbers and the timing work for you.