Is the Market Shifting?

Over the years, I’ve bought, owned, and flipped thousands of houses. I survived the 2008 crash… barely. By 2009, I was $1.5 million in debt. It took until 2015 to climb out and become debt-free again.

Looking back, it was a mix of overconfidence and ignoring market signals that got me into trouble in 2008. These days, I use that hard-earned experience to hedge against volatility. I never go into a deal without multiple exit strategies, especially if a fix and flip doesn’t yield a profit. That hindsight has become a strength. I scrutinize every deal, focus tightly on the numbers, and say no far more often than yes. That conservative approach has saved me from a lot of bad deals.

Sometimes I revisit the deals I passed on. Some turned out well for others, and while I applaud their wins, I’d be lying if I said I don’t wince a little. That’s my Achilles’ heel—passing on flips that others profit from. But recently, I’ve noticed a shift. As I review the properties crossing my desk daily, I see fewer flips closing to owner-occupants, especially in the sub-$250,000 market.

When I run comps, I’m noticing many high-end flips sit on the market for 60 days or more, with some already starting to see price reductions. What’s especially surprising is how inflated some of the asking prices are—well above the average for comparable properties. It seems sellers are justifying these prices based on the level of renovations or, more likely, trying to recover from overspending on their rehab budgets. It’s an aggressive—and frankly, reckless—strategy. These properties are just sitting, while the ones that do sell are often going at significantly reduced prices.

According to the Alabama Realtors’ Q1 Market Recap, it’s “A Season of Cautious Optimism.” They report a 4.6% increase in home sales and a 5% rise in prices—sounds great on the surface. But those numbers are statewide and skewed. They don’t reflect niche micro markets or specific property types like the ones I focus on. That kind of data can be misleading. It’s more spin and bravado than insight.

As a broker, I have direct access to MLS data. Here’s what I found for Q1 2025 for houses under $250,000 built after 1945:

• 287 sold

• 83 sold for cash

• $160,860 avg. asking price

• $154,159 avg. sales price

Compare that to Q1 2024:

• 558 sold

• 178 sold for cash

• $167,286 avg. asking price

• $158,067 avg. sales price

Sold inventory is less than half the previous year, and prices are down about 3%. But the big red flag? Cash sales are down 54%. That drop says a lot about investor activity and confidence.

What’s behind the shift? Could be tariffs causing supply chain instability. Maybe it’s the Fed holding interest rates around 6.8%. Or perhaps inflation anxiety is affecting market sentiment. Whatever the cause, the change is real—at least for me.

In the sub-$250,000 space, buyers used to care about just two things:

1. How much do I need for closing?

2. What’s my monthly payment?

That was then. 

Today, there are 628 active listings that meet my criteria just in Jefferson County, Alabama alone. For a small-cap market, that’s a lot. More listings mean more competition and saturation, which puts downward pressure on prices. With cash sales down, sellers are either clinging to unrealistic prices or sitting on properties. My guess? It’s the former. Many still think they’re in a seller’s market. But time on market brings reality—and price drops.

So, what does this mean for me?

I’m not panicking over a 3% dip in sales prices. What concerns me is the more than  halved inventory turnover and decline in cash buyers. That’s why I’ve shifted my approach away from fixing and flipping.

Here’s my current strategy:

I’m targeting properties that have been on the market 60+ days and those with meaningful price reductions. Just this past week, I locked up these three contracts:

• Listed at $105,900, under contract for $97,000, ARV $171,000

• Listed at $127,500, under contract for $80,000, ARV $160,000

• Listed at $85,000, under contract for $60,000, ARV $130,000

All were on the market for over 120 days.

My exits? Either hold as rentals or flip turnkey—provided I clear at least $25,000 profit per door. That’s my minimum profit. If I can’t hit this profit target, I will put the property into our rental portfolio and refinance it (BRRRR). I can still be slightly aggressive on offer prices because our renovations scale to rent ready levels, not retail level with higher costs, which translates into lower offer prices from my competitors. This is my current strategy in a shifting market.

How’s your market holding up? Are you noticing the same trends in your specific acquisition areas? Are you locking up contracts below the asking prices? You should.

Stay grounded—ignore the hype, focus on your local market microdata, and trust your numbers and process. Slow and steady always wins in the end.