Housing Market & Economy, Industry Trends, Investing Strategies

Waiting for Real Estate Prices to Drop? Here’s the Risk

Author: Erica Hackmyer

Date Posted: Jun 3, 2025

housing market aerial view.

We’ve heard it more often in 2025 than any time in recent memory:

“I’m just going to wait for prices to drop a little more before I buy.”

And we get it. Prices skyrocketed during the pandemic boom. Now that appreciation is slowing — or even reversing slightly in some markets — it’s easy to assume a bigger correction is just around the corner.

But at LendingOne, we’ve helped thousands of investors buy through every kind of market cycle. And here’s what we can say with certainty:

Trying to time the bottom rarely works. Smart investors buy the right deal — not wait for the perfect market.

In this article, we’ll break down what’s really happening with pricing, what the experts are saying, and why waiting too long could cost you more than it saves.

What the Market Data Says About Prices in 2025

Let’s get to the numbers.

According to Redfin’s latest housing forecast:

  • U.S. prices will fall by only ~1% by Q4 2025
  • The median sale price in April 2025 was $438,108, up 1.3% year-over-year

Meanwhile, Case-Shiller’s national index showed home values up 3.4% year-over-year as of March 2025. And the National Association of REALTORS® forecasts home price growth of roughly 2% for full-year 2025.
(Source: NAR Housing Forecast 2025)

In simple terms? Yes, some markets are cooling. But prices aren’t crashing. Most experts predict a plateau or gentle correction — not a big drop.

What If Prices Do Drop? Let’s Do the Math

Let’s say you wait, and prices fall 2–3% later this year. If a property you’re looking at now costs $400,000, that means you could buy it later for $388,000 — a $12,000 discount.

That sounds good — until you factor in what you’re losing by waiting:

  • You’re missing out on rental income. That $400,000 property might generate $2,500/month in rent. Waiting six months = $15,000 in lost income. You’ll face more competition later. If rates drop or prices start going up again, more buyers will jump in — and prices will go up.
  • You’re still exposed to inflation. Your cash loses value sitting idle. Even modest 3–4% inflation eats into your buying power.
  • The property you want might not be available. There’s no guarantee the “right” deal will still be there.

In short: a small discount doesn’t always beat the opportunity cost of inaction.

What Smart Investors Know About “Market Timing”

Here’s a truth that experienced investors understand:

You don’t wait to buy real estate — you buy real estate and wait.

Why? Because long-term value creation in real estate comes from:

  • Equity buildup through loan amortization
  • Market appreciation over time
  • Rising rents and tax advantages
  • Creative improvements that boost property value

None of that happens while you’re sitting on the sidelines.

Real Estate Is Still Undersupplied — Even in a Slower Market

One reason prices haven’t dropped more is supply.

The U.S. housing market is still millions of units short of what’s needed to meet demand, according to data from Freddie Mac and the National Association of Home Builders.

As of April 2025:

This imbalance is what keeps prices from crashing — and why many investors are still buying today, even at current price points.

What You Should Do Instead of Waiting

We’re not saying “buy anything right now.” But we are saying this:

If you find a property that:

  • Cash flows at today’s interest rates
  • Is in a location with strong rental demand and economic growth
  • Fits your investment criteria for hold time, risk, and equity potential

…then it’s worth serious consideration — regardless of what might happen to prices in six months.

At LendingOne, we’re seeing our most experienced clients do the following:

Buying on Cash Flow, Not Hype

They’re not hoping for 3-4% annual appreciation — they’re buying properties that cash flow from day one.

Using Adjustable or Bridge Loans to Stay Flexible

Some are using shorter-term loans to capture equity now, with the option to refinance later if rates or prices move.

Negotiating Harder

With less competition, there’s more room to ask for concessions, credits or better terms — especially on fixer-uppers or longer-DOM properties.

Final Thought: “Perfect Timing” is a Myth

It’s natural to want the best deal. But the truth is, no one — not even the best analysts — can consistently call the bottom of any market.

What matters more than buying at the lowest price is buying the right property, at the right terms, with a plan to hold and operate it profitably.

The right time to buy isn’t when everything feels safe. It’s when you’re prepared, the numbers work and you’re ready to move.

Talk to LendingOne About Your Purchase Plan

Still feeling cautious? That’s normal.

We’d be happy to walk you through financing options based on today’s rates — and help you model how different price and rent assumptions impact your returns.

Contact LendingOne Today