Defining the real estate landscape over the past few years, the national inventory shortage has proved challenging on both sides.
With shifting economic conditions and evolving seller mindsets in 2025, there are new opportunities for agents to work with sellers to tap into dormant inventory and get sellers into the market.
Through market knowledge, leveraging technology, value proposition and marketing, agents can help sellers overcome their hesitation over market conditions and move forward with selling their home.
Understanding the inventory shortage and shifting expectations
The roots of the current inventory crisis run deep.
For years, low housing supply has been exacerbated by a hodge-podge of factors: increasing home prices, limited new construction, zoning restrictions and the lingering effects of the pandemic. On top of that, homeowners have been hesitant to list their properties due to a phenomenon sometimes known as “rate-lock syndrome.”
With mortgage rates climbing significantly since 2022, sellers who locked in historically low rates during the pandemic are hesitant to let go of these rates—effectively keeping them out of the market and furthering the inventory shortage.
Lisa Sturtevant, chief economist at Bright MLS, has emphasized that economic trends in 2025 could shift these dynamics.
Buyers and sellers have “reanchored their expectations, and rates may not have to come down as much as we think they do in order to bring buyers and sellers back into the market,” Sturtevant explained during RISMedia’s 2025 Real Estate’s Rocking in the New Year virtual event.
On top of shifting expectations, this year will bring a new set of buyers into the market.
Younger buyers—specifically, those who purchased their homes during the pandemic—will be flooding the market in 2025, due to shifting work requirements post-pandemic, predicts Sturtevant.
“Underlying economic and demographic fundamentals are still going to drive housing market conditions,” she said. “But now more than ever we need to be paying attention to the lingering effects of the pandemic as well as changes in homebuyer and seller preferences and frankly how all of this uncertainty affects consumer confidence and consumer behavior in the year ahead.”
According to the Housing Shortage Tracker index from the National Association of REALTORS®—which shows how many permits are issued for every new job—inventory is improving, yet still falling short of demand.
A high index shows that more jobs are being created than homes in a specific area. A balanced market will have one single-family permit issued for every two new jobs. According to the study, this was not the case for nearly 80% of the 172 major metropolitan areas indexed in the third quarter of 2024.
The New York City area (Newark, New Jersey, and Jersey City, Pennsylvania) had the highest shortage of single-family housing units, with only one single-family permit issued for every 23 jobs.
Other areas experiencing the highest housing shortages include:
- Urban Honolulu, Hawaii
- New Haven, Connecticut
- Miami, Fort Lauderdale and West Palm Beach, Florida
- Bridgeport, Stamford and Norwalk, Connecticut
- Champaign and Urbana, Illinois
- Hartford, West Hartford and East Hartford, Connecticut
- Oxnard, Thousand Oaks and Ventura, California
- Syracuse, New York
- Buffalo, Cheektowaga and Niagara Falls, New York
By the end of the third quarter of 2024, 35 major metropolitan areas had a housing shortage index at or below the historical average of two. Still, 87% of the observed areas saw a decrease in their index year-over-year, showing an upward trend of improved inventory of single-family homes.
Agents who stay informed on the inventory shortage and the trends surrounding it will be better positioned to educate potential sellers on overall market conditions. Knowledge of buyer demand, inventory shortages and regional data can help reassure sellers who might be on the fence about listing their home.
Utilizing market knowledge to educate buyers and generate more listings
Real estate agents play a crucial role in educating buyers and helping alleviate any concerns surrounding market conditions.
Agents with in-depth market knowledge have a significant advantage in unlocking inventory.
During a Rocking in the New Year panel, Debra Beagle—CEO and managing broker/owner of The Ashton Real Estate Group with RE/MAX Advantage in Nashville—emphasized the importance of staying informed on buyer appetite, under-contract properties and what parts of the market have the highest activity at what price point.
Understanding what’s moving in the market is key for educating sellers and helping them make informed decisions, added Beagle.
Value proposition
With many iterations of real estate cycles with all sorts of different changes, one key to success when it comes to getting sellers into the market is to know your value proposition and play into it.
Marketing is a major part of that, especially when you want to stand out from other established agents in your market, said Cole McNew, vice president of Coldwell Banker Commercial Haynes in Southeast Michigan.
He was able to target a niche market in his area—those with 80% – 100% equity in their homes—and utilize in-person marketing to make a connection with people who have owned their homes for several decades and educate them on the true value of their properties.
“Value proposition is one of the things I had to figure out very early on and find out: ‘What is the value that I bring as a new agent? What can I do differently? What can I do to stand out? What can I do to earn your trust?’” shared McNew.
Elizabeth Lucchesi, leader of The LizLuke Team at Long & Foster Real Estate in Northern Virginia and D.C. added that open houses can be a goldmine for connecting with potential sellers.
“Statistically speaking, whenever there is a house that goes on the market, three houses around that house are inevitably contemplating it,” she said. “The minute you sign a listing, send a note to everybody in the neighborhood.”
By inviting them to a private open house before a house goes on the market, you will establish a connection with these potential sellers and be first in mind when they think about selling their homes, Lucchesi pointed out.
Though marketing is a great way to get potential sellers into the market, financial concerns might remain a barrier.
By getting to know a seller’s specific reasons for selling and offering up financial solutions, you can stand out from other agents.
Seller solutions like extending your market reach or suggesting cash offers and auctions can be exactly what your buyer is looking for if they need to move on short notice or relocate outside of the country.
Staging assistance or small renovations can also create more opportunities for sellers, making the difference between a quick sale and something that will sit on the market for months.
It’s important to know your data and have solutions for each type of buyer, said Beagle.
“It’s the ‘why.’ What are the seller’s motivations? We have solutions for every type of seller out there,” she said. “Having those seller solutions in your toolbelt, or being at a brokerage that also helps provide that, is something a newer agent can lean back on.”
Differentiating yourself as an agent through these intentional strategies, along with researching your target market, can make all the difference when it comes to how long a listing sits on the market.
“Not everybody buys a house every day,” said Hoby Hanna, CEO of Howard Hanna Real Estate Services. “This idea, this ubiquitousness of the transaction that’s just: ‘put it online, put it in the MLS and pray that you sell the house—it doesn’t work.”
Action steps for agents
To encourage sellers into the market, and increase inventory, agents should take action with these strategies:
- Educate sellers on market conditions. Provide clear, data-backed insights to build seller confidence and rid of any misconceptions.
- Highlight equity gains. Emphasize how rising home values over the past decade have created significant opportunities for sellers.
- Offer alternative solutions. Partner with lenders and explore financing options to address each seller’s specific needs and concerns.
- Use targeted marketing campaigns. To help underrepresented markets, use targeted campaigns with specific demographics.
Through these strategies, agents can better educate their buyers and unlock new inventory in this year’s market.