If you’re trying to buy or sell a home in today’s market, you need to know how things are different now compared to just last year.

If you’re not up to speed on recent changes in the market, you’re putting yourself at a serious financial disadvantage that could manifest in a few different ways. One might be paying far more than a property is actually worth, resulting in higher monthly payments than are necessary, as well as less opportunity for appreciation in your home value over time.

Another, on the other side of the equation, might be having your home sit on the market longer than is necessary because it’s not priced properly. There are numerous other ways this could impact both buyers and sellers, creating long term effects.

One of the most significant changes, which has driven numerous other changes, is that we’re no longer deep in a seller’s market. As recently as late last year, a home seller could put their property on the market and almost instantly revive a flurry of competing bids, often fetching a price well above asking, and in many cases, buyers would make multiple concessions while sellers had to make few or even no concessions.

After years of this type of buyer and seller dynamic, I’m seeing a dramatic shift, and generally, an overwhelming majority of real estate professionals I talk to are seeing the same thing. The pendulum hasn’t fully swung in the other direction, so it’s not yet a buyers market. But there is far more power at the buyer’s side of the table than we’ve seen in a long time.

Tatiana Zagorovski, who runs Trio Realty Partners and goes by the moniker, “Miss Z” because of the difficulty most people have in pronouncing her last name, shared what she’s seeing in St. Louis where she operates. She says that homes in the $120,000-$300,000 range are still zipping through closings as fast as ever, but with one caveat—they need to be newly renovated.

“It’s not enough to just put a home on the market anymore. The entire industry has gotten more competitive so many investors have been driven out as a result. They’re the ones who tend to buy run down homes far more often than traditional home buyers, and that, coupled with the fact that prices have started to decline in many areas means there is a much smaller pool of buyers now for out of date or run down properties. This has changed the lower end of the market in a big way,” she explains.

She went on to say that certain renovations have a greater impact than others, so it’s critical to focus on the ones that provide the highest return on investment.

“When you’re selling, a fresh coat of paint throughout the entire house is usually the most important project, followed by kitchen, then bathroom renovations, and lastly, don’t forget to upgrade your fixtures throughout the house. Staging, especially when you hire an experienced professional to handle it, can result in a sale price that’s thousands or even tens of thousands of dollars higher,” Zagorovski said.

And as the market has changed dramatically over the last several months, it’s more important than ever to make sure you’re working with a truly qualified professional. As of 2025, there are over 1.5 million Realtors in the U.S. and many, to put it bluntly, are inexperienced at best.

In fact, just 10 years ago, that number was only about 1 million agents. According to the National Association of Realtors, 87% of real estate agents fail within five years of getting their license. This means that they leave the industry within that time frame, which should give you some idea about the general level of experience in the industry

Because the wrong advice can cost you thousands, if not tens of thousands of dollars on a single real estate transaction, it’s critical to carefully vet your agent.

James Lascara, who runs Poseidon 25 Developments, a real estate development company in Tampa and leads a team of Tampa agents, offers some advice on this topic.

“The purchase of a home is the biggest financial transaction in most American adults’ lives, so who you work with in 2025 matters more now than ever. A seasoned agent with experience in both real estate investments and retail transactions can mean the difference between success or complete disaster,” Lascara says, adding:

“One of the best ways to vet an agent is to gauge their communication and follow-through from the start of the relationship. I’ve seen deals of all types lost because an agent failed to respond to even simple inquiries in a timely manner. That can easily cause a buyer to move on to a different property, leaving your listing stagnating on the market without offers for much longer than it should.”

He says you should also perform a search, using the agents name, in search engines and on social media, and you should scroll through some of the content on their profiles—especially if you can find a personal, non-business profile, because “this tells you a lot about how others see that agent’s capabilities and experience, and gives you insight into their values and personality, which are important when working with someone in such a high stakes transaction,” Lascara explained.

Some experts say we also need to redefine our idea of housing.

What do you envision when you think of a home? If you’re anything like most people, you’re probably imagining what many in the real estate industry call a McMansion—one of those sprawling homes that by all historical standards, is exponentially larger than previous generations have built.

We’ve watched as new homes have trended larger and larger over the last few decades, but now, with growing interest rates and mortgage rates climbing, tiny homes and ADUs (Accessory Dwelling Units) are becoming more popular than ever. As budgets continue to get stretched, affordability is quickly becoming the most significant factor in purchasing decisions today.

Cofounder of the 3D printed tiny home manufacturer Azure, Gene Eidelman, about this trend, and he says, “An increasing number of U.S. states are taking a favorable stand on ADUs on existing residential and multifamily properties.

Likewise, the current interest rates are making these small units more affordable for individual buyers as well as for investors and developers.” Eidelman also notes that the inspection timeline is much faster and more efficient for factory-built housing units compared to traditional construction.

I agree with his perspective based on what I’ve seen over the last few years. Smaller properties seem to be moving a lot faster, while larger ones tend to sit on the market a lot longer. And as Dr. David Phelps pointed out in a recent article, our economy simply does not work for a majority of Americans any longer and home affordability has been absolutely shredded. Economic factors play a significant role in driving the sale of these smaller homes.

“To put this in perspective, the purchasing power of your dollar today has declined by about 25% compared to just ten years ago. In other words—everything you buy today costs 25% more, but most of you haven’t seen a corresponding increase in your income.

This all leads to the housing affordability crisis, which I believe, based on conversations I’ve had with hundreds of younger people, is the most significant single reason they feel the American Dream is dead. The story has always been that if you work hard, get a good job, pay your bills on time, and put aside some savings, you could own a home, but that’s becoming out of reach for millions of Americans,” Phelps explained.

The cost of an Accessory Dwelling Unit (ADU) can vary widely, but typically ranges from $100,000 to $200,000. The cost breakdown depends on the size of the ADU, the materials used, and the type of ADU. By comparison, as of Q4 2024, the median price of a traditionally built home in the United States was $419,200—which is more than double the cost.

And cost savings is only one part of the equation. Because of the smaller footprint and the fact that many of the components are preassembled in a manufacturing facility, you can go from purchase to completion far faster than homes built on site using traditional construction methods. This is a huge benefit, and can go a long way in reducing America’s housing shortage.

According to recent data from Realtor.com, as of 2025, the United States faces a housing shortage of nearly 4 million homes, with the current supply gap considered the third largest since 2012; this shortage is attributed to a decade of underbuilding and is causing significant strain on home affordability and rental availability. ADUs and other smaller homes that can be built more quickly can offer a tremendous advantage in solving this problem.

The bottom line is that the real estate market will continue to move forward, as always, but how it moves forward today is dramatically different than as recent as Q4 of last year, and those who adapt will thrive while those who don’t will suffer financially.

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Lori Greymont is a seasoned real estate investor, creator of the hit TV show, Funding Faceoff, and founder of a private mastermind community with the mission to help 5,000 real estate entrepreneurs get their real estate deals done and create true financial freedom.