The Investment Implications of a Stale Housing Market: Why Sellers Are Propping Up Prices and What It Means for Real Estate Investors

The U.S. housing market is undergoing a paradoxical transformation. Despite a surge in inventory levels, home prices have remained stubbornly resilient, defying traditional supply-demand logic. At the heart of this anomaly lies a growing trend: sellers are increasingly delisting their properties rather than accepting lower offers, artificially constraining supply and propping up prices. For real estate investors, this dynamic signals a maturing market cycle, where strategic adaptability will determine success.

Delistings and Artificial Supply Constraints

The delisting rate has spiked dramatically since 2023, with 84,000 homes pulled off the market in September 2025 alone-a 28% year-over-year increase and the highest September rate in eight years. This trend has created a supply bottleneck, as 70% of listings are now classified as "stale" (on the market for at least 60 days), with the average delisted home remaining unsold for approximately 100 days. Sellers, particularly those who bought during the pandemic-era frenzy, remain anchored to inflated price expectations, refusing to adjust to current market realities. The result is a market where inventory grows but effective supply shrinks, as delistings outpace new listings in key regions like Miami and Phoenix with delistings up 57%.

Price Resilience Amidst Delistings

Despite a 20.9% year-over-year increase in overall inventory, home prices have climbed by approximately 2% annually in September 2025. This resilience stems from sellers' refusal to lower prices. While 53% of homes now sell below asking price, indicating growing buyer leverage, sellers are increasingly offering concessions (e.g., covering closing costs, repairs) rather than reducing base prices. The disconnect between pricing expectations and market realities is most pronounced in high-cost markets, where sellers are holding out for pre-pandemic valuations.

Shifting Power Dynamics: Buyers vs. Sellers

The housing market is fracturing into regional extremes. In 21 major U.S. metro areas, including Miami and Phoenix, buyers now outnumber sellers by 37%, with Miami's gap widening to 112.2%. This imbalance has shifted negotiating power toward buyers, who can leverage longer listing periods and price flexibility. Conversely, in pockets of the country, sellers retain influence due to limited inventory and localized demand with delistings up 57%. This duality creates a fragmented landscape where investors must navigate both buyer's and seller's markets simultaneously.

Regional Trends: Miami and Phoenix as Case Studies

Miami has emerged as a bellwether for delisting-driven market shifts. With 57 delistings per 100 new listings in June 2025, the city faces a perfect storm of rising insurance costs. Yet, its rental market remains robust, with occupancy rates near 95% and rental prices up 8.6% in 2024. Investors here should prioritize multifamily properties and climate-resilient assets, such as elevated homes with impact-resistant features, to mitigate risk while capitalizing on steady demand.

Phoenix, meanwhile, is grappling with a surge in delistings driven by oversupply and high mortgage rates. The city's inventory has grown to five months of supply, a stark contrast to the 2020-2022 shortage. While new construction is cooling prices, investors can target value-add multifamily deals, leveraging Phoenix's strong population growth and job market. Creative financing-such as private bridge loans-will be critical to navigate tighter bank underwriting standards.

Investment Strategies for a Stale Market

1. Focus on Multifamily and Rentals: In markets like Miami, where single-family sales are stalling, multifamily properties offer stability through recurring rental income.
2. Prioritize Climate Resilience: In flood-prone or hurricane-exposed areas, properties with adaptive features will retain value as insurance costs rise.
3. Leverage Buyer's Market Conditions: In Sun Belt cities with high inventory, buyers can negotiate favorable terms to enhance returns.
4. Adopt Flexible Financing: In Phoenix and similar markets, private capital can bridge funding gaps for value-add projects, allowing investors to act swiftly in a slowing market.

Conclusion

The U.S. housing market is transitioning from a seller's paradise to a buyer's battleground, with delistings acting as both a brake and a lever. While sellers are propping up prices through intransigence, the growing inventory and regional imbalances signal a normalization of market conditions. For investors, the path forward lies in agility: targeting resilient asset classes, embracing localized strategies, and capitalizing on the maturing cycle's opportunities. As the market recalibrates, those who adapt to the new equilibrium will find themselves well-positioned for long-term gains.