Every time the national pending sales number slips, my inbox fills with the same question from agents in and outside Austin: Is the buyer’s market finally here?
The National Association of Realtors reported that pending sales fell 4.7 percent year-on-year in August. At a glance, that looks like the balance is swinging back to buyers. I’ve been watching Central Texas closely enough through this correction to think that read has the mechanism backward.
A pending sales figure measures contracts signed. It tells you how many buyers acted last month and nothing about how many homes those buyers had to choose from. When demand softens, and supply softens alongside it, the balance of power doesn’t move the way the headline implies, and telling those two situations apart is most of the job.
New construction is pulling back, and that’s a 2027 problem
New construction is one of only two ways homes reach the market, and that pipeline is closing. Builder confidence dropped to 32 in September, a three-year low, and builders’ six-month sales outlook fell with it. Nearly 40 percent are cutting prices and two-thirds are writing incentives just to move standing inventory.
Single-family starts rose in August, but one month means little against falling permits and a confidence line that has sat under break-even for two years. Builders aren’t reacting to weak demand. They’re shelving projects because the math no longer holds against today’s financing and construction costs.
A home a builder chooses not to start this fall is a listing that never reaches the market in 2027. Spec inventory sitting on the ground today can look ample and still mask a pipeline thinning out behind it. If you want a read on your own market two years from now, watch permits where you sell rather than the national starts headline.
One month does not make a trend
The bigger problem with the buyer’s market read is that it treats housing like a financial market, and housing does not behave like one. A stock reprices in seconds on an earnings call, and a bond reprices the moment the Fed changes a sentence.
Commentary about real estate borrows that vocabulary, so a 2 percent monthly dip in pendings gets reported like a selloff and a 2 percent bump gets reported like a rally.
Real estate is primarily a utility. People buy a house to live in it, and that changes everything about how prices move. The decision to sell takes months to make, and the listing takes weeks to draw an offer.
By the time a price shows up in a monthly report, it was agreed to at contract 30 to 60 days before it printed, which makes every data point a lagging picture of decisions made a season ago. No single month can tell you where the market is headed. It is a very slow-moving ship, and it turns like one.
That is also why home prices don’t rise and fall the way they get reported. Nobody sells a house because the neighbor’s closing came in 3 percent light.
The correction Austin went through starting in 2022 was the sharpest I’ve worked, and even that played out over more than a year rather than a quarter. When you see a one-month move in a national index, the right reaction is to wait for the next three, because a trend in this business takes at least that long to prove it exists.
Telling a supply squeeze from a buyer’s market
Before you call it, pull the pending number next to the supply number in your own market. Active listings and months of inventory, held up against demand. When inventory is falling as fast as contracts are, a demand dip is just a quieter market with fewer deals in it. When inventory is climbing while pendings slide, that is a buyer’s market signal, and your sellers need to know about it.
Take my own market, Austin, Texas. Unlock MLS reported that August pending sales across the Austin metro edged 1.5 percent ahead of last year, while active listings ran 6.5 percent below it.
Sales and prices both cooled from a year ago, no argument there, so this is not a hot market. But demand held its ground as the for-sale supply shrank, which is the opposite of the setup a buyer’s market needs. The buyers who stayed are competing over well-priced homes rather than wading through a glut.
Pricing into a seasonal downturn
Seasonality matters more than any short-term move in the national print, and it is the thing the buyer’s market crowd keeps skipping. People do not like buying homes around the holidays. They like buying them in the spring and summer, and they have wanted it that way for as long as anyone has kept the data.
Demand from October through January runs lower every year; sellers who don’t have to list wait for March, and both of those facts are baked in long before any index moves.
So before letting a seller read the fall slowdown as weakness, check two numbers in your market: closings against list price and how many active listings have already cut. If the well-priced homes are still closing in the mid-90s and the reductions are stacking up on the aspirational listings, your slowdown is seasonal rather than structural.
In my market, homes are closing right around 93.2 percent of list, and more than half of what I’m watching has already taken a cut. The ones drawing offers came out at a number the data supported, while the ones collecting reductions came out chasing 2022.
In my career, I have seen seasonality bucked exactly twice: the spring of 2008, when the financial crisis emptied the market at the moment it should have been filling, and the winter of 2020 into 2021, when the pandemic frenzy produced a December that looked like May. It takes an event of that magnitude to override the calendar, and pending sales running a few points below last year is not that event.
The coaching here is the same I give my own agents: price to the depth of demand for the right homes, not to the pessimism in the headline. A well-positioned fall listing walks into more competition than the national number would lead anyone to expect.
Fewer listings surface in the fourth quarter out of habit, and the buyers still out there are the ones who need to move now. That won’t feel like a buyer’s market to the people writing those offers.
When the spring wave arrives on schedule, the agents who read the calendar instead of the headline will be the ones holding the listings.
Eric Bramlett is the founder of Bramlett Partners in Austin, Texas. Get connected on Instagram and Facebook.
