Is the Housing Market About to Crash? Here's What You Need to Know

It’s the question on everyone’s mind lately—“Is the housing market about to crash?”

With sensational headlines making the rounds and social media stirring fear, it’s understandable why 70% of Americans say they’re concerned about a crash in 2025.

But here’s the reality: we’re not heading toward a crash—we’re seeing a shift. And that shift could actually be a good thing for buyers and sellers alike.

Why a Crash Isn’t Likely: It All Comes Down to Supply and Demand

Mark Fleming, Chief Economist at First American, put it simply:

“There’s just generally not enough supply. There are more people than housing inventory. It’s Econ 101.”

Even though inventory is rising modestly, we’re still far below what’s considered normal, according to data from Realtor.com. That ongoing shortage is keeping prices from collapsing. It’s like tickets to a sold-out concert—when demand outweighs supply, prices hold firm.

Lawrence Yun, Chief Economist at NAR, echoes this:

“… if there’s a shortage, prices simply cannot crash.”

What’s Really Happening: Price Growth Is Slowing, Not Reversing

Yes, more homes are hitting the market. And while that’s giving buyers a bit more breathing room, it’s not enough to cause a price drop. Instead, we’re seeing price moderation—which is exactly what a balanced market looks like.

According to Freddie Mac:

“In 2025, we expect the pace of house price appreciation to moderate from the levels seen in 2024, while still maintaining a positive trajectory.”

Translation? Prices will still go up, just at a slower, more manageable pace. That’s good news for anyone who’s been sitting on the sidelines due to sticker shock or fierce bidding wars.

The Local Market Still Matters Most

What’s happening nationally gives us valuable perspective—but real estate is always local. Here in St. Augustine, we’re seeing neighborhoods move at different speeds. Some areas are still hot, while others are balancing out with more listings and longer days on market.

If you're wondering what this means for your specific situation—whether you're buying, selling, or just watching—it’s essential to have a conversation with someone who understands the local landscape.

Bottom Line: Don't Let Fear Drive Your Decision

The data and the experts are clear: a market crash isn’t on the horizon. As Business Insider puts it:

“Economists who study housing market conditions generally do not expect a crash in 2025 or beyond unless the economic outlook changes.”

Instead, we’re heading into a healthier, more balanced market—with slower price growth, more inventory, and more opportunities for buyers and sellers who are ready to make a move.

If you’re thinking about making a move in or around St. Augustine, I’d be happy to walk you through what’s happening locally—no pressure, just the facts. Let’s connect and see how the current market shift could work in your favor.