Graham Stephan Says Home Sellers Are Panicking About Dropping Home Values — but Should They Be?
Written by
Vance Cariaga
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Jenna Klaverweiden
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Homebuyers might finally have the upper hand again in the U.S. housing market after years of being handcuffed by soaring prices and low inventory. The current market isn’t exactly perfect for buyers, but it’s definitely weakening for sellers — and some sellers are beginning to panic, according to real estate investor Graham Stephan.
Whether you should start panicking depends on where you live. But as with anything related to money, you’re better off staying calm instead of letting fear drive your decisions.
Also see the six biggest challenges homebuyers could face in 2025 and how to avoid them.
Sellers Outnumber Buyers by Record Margin
In a recent video posted to YouTube, Stephan said current trends in the U.S. housing market have sounded the alarm for Realtors and sellers across the country.
“For the first time since the great financial crisis [of 2008-09], the housing market has officially flipped and sellers are beginning to panic,” he said. “As of now, there’s an estimated 34% more homes for sale than there are offers. Sellers outnumber buyers by a record 500,000, which is the largest imbalance on record.”
Stephan also said the U.S. is in the early stages of a buyer’s market, where sellers are forced to negotiate down rather than commanding top dollar.
“Homes are sitting on the market for longer, and in 61% of the U.S., prices are starting to drop quite dramatically, depending on where you live,” he explained.
A ‘Critical Stage’
There’s no question that the housing market has undergone a transformation in recent months.
Pending home sales decreased 6.3% in April, according to the latest data from the National Association of Realtors (NAR). All four U.S. regions saw month-over-month losses in the number of transactions as many buyers continue to sit on the sidelines.
“At this critical stage of the housing market, it is all about mortgage rates,” NAR chief economist Lawrence Yun said in a May 29 press release. “Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market … Home buyers in nearly every region of the country are in a better position to negotiate more favorable terms.”
For home sellers in some markets, those terms could mean selling for a lot less than they could have a year ago — which is why many are panicking.
“There will be more price reductions that are going on, and more willingness to sell at a lower number, especially in the next couple months. We’ve definitely seen people who have taken losses,” Jeff Lichtenstein, president of Echo Fine Properties, told The Wall Street Journal.
Why You Shouldn’t Panic
Despite the shift from a seller’s to a buyer’s market in some parts of the country, many sellers still hold the upper hand.
A report released earlier this month by Redfin noted that more than one-quarter (28%) of U.S. homes are selling above the asking price. That’s down from 32% a year earlier and represents the lowest level for this time of year since 2020, but it still shows that there are pockets of the country where sellers can still earn a nice profit.
Overall, however, the median sale price has been slipping below the median list price in most of the country. That’s a big change from a few years ago, when the median sale price was typically much higher than the median list price.
On the bright side, median sale prices are only about 7% below list prices — and in many cases, those list prices are well above what sellers originally paid for the home.
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