A Borrower’s Market Update

A Borrower’s Market Update

If you’re eyeing your next project, you may already sense something shifting in the market around you. It’s a subtle recalibration that matters for anyone thinking about a private lending deal.

Here’s the current snapshot:

• Nationally, the median sale price of existing homes in September 2025 was about $415,200, up roughly 2.1% year-over-year. 
• Inventory is growing. Active listings rose about 20.9% year-over-year in August and the count has been above 1 million for several months in a row. 
• The market is diverging regionally. Some parts (especially the South and West) are seeing bigger inventory gains and more price pressure, while others (Northeast, Midwest) remain relatively tighter.
• The time a home sits on the market is creeping up. In July 2025, the median time on market was 58 days.

More supply, modest price growth nationally, and slower movement mean opportunity and caution for a borrower in real estate and private lending.

What It Means for Borrowers and Private Lending Deals

You’re not just buying property, you’re doing a deal that needs an exit strategy. Whether you’re flipping, building to rent, or value-adding, here are some practical takeaways.

1. More listings = more choice, but also more competition.
   With listings up 20 %+, you’ve got a broader field. That can mean better picks, maybe better pricing, but also more options for lenders to scrutinize. If your deal stands out for the right reasons (location, exit, track record), you’re in a good spot.
2. Price growth is modest, so projections matter more than ever.
   With only slight national price growth, relying on rapid appreciation to make your deal work could be a gamble. Lock in realistic exit pricing, consider local market conditions (which may vary widely), and build in margin. A 2 % national increase doesn’t necessarily translate to growth in every neighborhood.
3. The timing of your exit is crucial.
   Homes are taking a bit longer to sell. If your deal’s exit depends on a quick turnaround, be sure you’ve got buffer. If you’re in new construction or major renovation, your timeline may be even longer so plan accordingly.
4. Regional Trends Are Shaping Deal Outcomes.

National data is helpful, but local conditions rule. In some southern states inventory has surpassed pre-pandemic levels, hinting at a possible slowdown in those markets. If you’re a borrower, make sure you know your sub-market.

5. Lenders are going to want more clarity.
   Because conditions are turning and are less of a seller’s market, your lender will want clear exit strategies, realistic timelines, and contingency plans. If your deal can withstand a slower market, you’ll be stronger.

Smart Moves for Borrowers Right Now

• Validate your exit assumptions. If your plan is “sell in six months,” ask: “What if it takes nine?”
• Check time-on-market trends locally. If your specific neighborhood sees homes taking longer, budget accordingly.
• Monitor price cuts. More listings are seeing reductions. This could signal cooling demand or above-market pricing. 
• Choose projects with flexibility. Deals that allow for rental conversions, or longer hold-periods, may give you more cushion.
• Stay informed on lending trends. If lenders tighten their criteria (because of rising inventory or slower market conditions), being well prepared helps you negotiate confidently.

Looking Ahead (Because the Next Quarter Matters)

Interest rates, financing costs, and consumer sentiment will continue to drive the direction of the real estate market. For now expectations are that prices will modestly rise (perhaps 1.5-3%) for 2025. For borrowers, this means you should lean toward conservatism in projections, build in flexibility, and focus on deal structure rather than just location.

At its core, successful borrowing in private real estate isn’t about jumping on the next hot trend, it’s about understanding the market, planning realistically, and building deals that can endure slower periods. With more inventory, modest price growth and longer timelines, the advantage goes to the borrowers who know their numbers, know their markets, and build in contingency.

If you’re exploring a project or weighing your next move, reach out to talk through your deal structure, market assumptions and exit strategy. Having the right conversation now can make a meaningful difference when markets shift.

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