Exhaustion over higher interest rates, ongoing low inventory, and a presidential election year led to some of the lowest sales numbers realtor Zita Billmann has seen in her 17-year career.
Buyers are now brave enough to negotiate prices, whereas before they would make offers over the asking price in a desperate bid to get homes in a tight marketplace.
“They’re over the bids, they’re over competing for a house, and with the seven-plus percent interest rate, it’s diminished to a balance,” she said. “Sellers are coming to the market, and their houses are taking longer to sell because buyers are now paying a lot more money for that home, and their expectations are higher.”
Billmann said she expects more of the same throughout 2025 as we return to a more normal market for the first time since the pandemic. However, she doesn’t anticipate that buyers will be scared away by the higher interest rates. That’s because home values continue to rise, making it worth the investment.
She advised buying now and building at least two years of equity in a home before refinancing at a lower interest rate in the future. “The increase in value continues to go up every year,” she said. “The market isn’t going backward; it’s continuing to grow. Staying ahead of the growth means buying now and refinancing later.”
As we progress through 2025, Billmann predicts a mix in the real estate market with a lot of first-time homebuyers and many people downsizing. “It will be a mix of everything, but it will keep the market moving.”
By 2026, she expects the return of a solid market with stable interest rates around the high fives or low sixes and plenty of inventory. “That will help spark more people to sell their homes, and that will help the inventory feel level for everybody,” she said. “People will be confident in the market and excited again about buying and selling.”
Downsizing Gaining Momentum
For the last couple of years, people with larger homes were holding onto them because they didn’t know where to go if they downsized. First, it was because of the low inventory, then rising interest rates. Billmann said she expects those fears to subside as the markets normalize throughout this year into 2026.
“I’m having a lot of conversations with sellers who are spending more money to downsize,” she said. “The challenge is the mindset shift that those sellers need to work through, and it’s not an overnight thing.”
Sellers who bought their homes 25 years ago for $500,000, which are now worth two and a half to three times more than what they paid, can’t expect to now buy a smaller house for $500,000, she said. “You’ll spend the same amount or more, but it’ll give you what you want in life. If you stay in a house that’s not what you need or want and doesn’t fit your lifestyle anymore, it’s not a good decision.”
A better way to think of it is if you sell your house and get all the money back that you put into it, then you’ve essentially lived there for free, she said. “If you have a lot of equity in your home, you can take it and put it somewhere else. You can take all that money and buy your next place mortgage-free and be happier.”
Billmann assures sellers interested in downsizing that buyers are waiting in the wings.
She said the only time she advises against downsizing is if the sellers can’t find a downsized property they like or that fits their needs. “Then, you might have to adjust your expectations and be a bit more flexible, especially in our local market. Everybody wants the perfect house in the perfect location at the perfect price. But you have to compromise on things sometimes.”
Be Smart About Buying or Selling
Buyers need an experienced agent to navigate the process successfully, Billmann said. She recommends interviewing a few to find the right fit. “No house is perfect, and you’re going to have to invest some money,” she said. “An agent can help you protect your investment.”
Sellers should also work with an agent who understands their goals and the local marketplace. She advises against choosing a “yes man” agent who simply tells sellers what they want to hear instead of giving them the best advice.
As the number one selling agent in the Pittsburgh region since 2018, Billmann said she doesn’t inflate the selling price because it’s never a good strategy. That highest price isn’t always the right answer, she warned. “I’m a pricing expert. My pricing is on point 99 percent plus. I’m also a great negotiator when there are multiple bids for your property. It’s about helping to win bids using a strategic approach.”
Buyers and sellers can reach Billmann by visiting her website at zitabillmann.com.
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