The Real Estate Bargain Hunt: Seizing Undervalued Opportunities in Cooling Markets

The U.S. housing market has entered a critical inflection point. After years of seller dominance, inventory levels have surged, time-on-market has lengthened, and overpriced listings are forcing a reckoning. For astute investors, this is the moment to act. Data from the National Association of REALTORS® (NAR) reveals a landscape ripe with undervalued properties, particularly in regions where inventory growth outpaces 2021 levels. Strategic buyers can capitalize on misaligned pricing, liquidity tools, and shifting buyer sentiment to secure high-potential assets before deeper corrections take hold.

Market Dynamics: A Seller's Misalignment Creates Buyer Advantage

NAR's April 2025 data highlights a stark shift: housing inventory reached 1.45 million units, a 20.8% annual increase, with a 4.4-month supply at current sales rates—up from 3.5 months in 2024. This inventory boom, driven by rising mortgage rates and pent-up listings, has extended the median time-on-market to 29 days (up from 26 days in 2024). While this may seem minor, it reflects a growing buyer negotiating edge, as sellers increasingly price homes beyond market tolerance.

The data also reveals regional fragmentation. The West, once a red-hot market, saw sales decline by 3.9% in April 2025, with median prices dipping 0.2% year-over-year. Meanwhile, the Midwest and South stabilized, with modest price growth and inventory gains. This divergence creates pockets of undervaluation—particularly in previously overhyped tech hubs and coastal cities where listings linger.

Undervalued Regions: Where Overpricing Meets Correction

Focus on markets where inventory surges have outpaced price adjustments. NAR's historical data shows that Phoenix, Austin, and Raleigh saw inventory jumps of 177%, 164%, and 139%, respectively, in 2022. These areas, once synonymous with speculative booms, now face stark reality checks. For example:
- Austin: Median days on market rose by 16 days in 2022 compared to 2021, signaling buyer resistance to overpriced listings.
- Raleigh: Inventory growth outpaced sales by double digits, creating a buyer's market where prices have begun to retreat.

Investors should prioritize regions with:
1. Inventory growth exceeding 15% year-over-year (NAR's April 2025 report highlights the South at +3.2% and Midwest at +2.1% as moderate, but watch for local hotspots).
2. Price-to-rent ratios exceeding 20% above historical averages, indicating overvaluation.
3. Time-on-market increases exceeding 10%, signaling stalled listings.

The Time-on-Market Indicator: A Crystal Ball for Pricing

Time-on-market is a leading indicator of misalignment. NAR's post-2021 methodology adjustments ensure data reliability, and the trend is clear:
- In August 2022, time-on-market averaged 42 days, 22 days below pre-pandemic norms but 5 days higher than 2021, marking the start of buyer pushback.
- By April 2025, the metric rose to 29 days—a 12% increase from 2024**—as inventory saturation intensified.

This trend suggests sellers are slow to adjust pricing, leaving room for investors to negotiate 5–15% below asking prices in overcorrected markets.

The Investment Playbook: Liquidity, Leverage, and Timing

To seize these opportunities, pair strategic purchases with short-term liquidity tools like Arrived Home's Private Credit Fund, which offers flexible, non-recourse loans at 7–9% interest rates. This structure allows investors to:
1. Move quickly: Secure properties with short-term capital while evaluating long-term holds or flips.
2. Mitigate risk: Use the fund's 12–18 month terms to ride out market corrections, then refinance or sell as stability returns.
3. Leverage discounts: Deploy capital in regions like the West or Northeast, where price declines have been most pronounced.

Urgency: Act Before the Clock Runs Out

The window for bargain hunting is narrowing. NAR forecasts that stagnant listings will force sellers to accept deeper discounts by late 2025, but early investors can lock in assets before this occurs. For example:
- A $400,000 home in Austin, priced at $450,000 in 2022, now faces a $35,000 markdown risk if it lingers on the market past 60 days.
- In Chicago, where inventory fell 25.3% in 2022 but time-on-market remains elevated, buyers can secure properties at 8–10% below peak 2021 prices.

Conclusion: The Smart Investor's Edge

The post-2021 real estate market is a treasure trove for those willing to act decisively. With inventory at multi-year highs, time-on-market signaling buyer hesitancy, and regional corrections underway, the stage is set for value-driven purchases. Pairing data-driven insights with liquidity tools like Arrived Home's Private Credit Fund creates a low-risk, high-reward strategy.

Act now—before the correction becomes a crash. The next 12 months will separate the opportunistic investors from the passive observers.

Data sources: NAR Monthly Housing Reports (2021–2025), Realtor.com methodology notes, Arrived Home Investment Highlights.