Q2 2025 Home Inspection Market Outlook

It's a transition to a different kind of market or northern parts . You know of the US and Canada . You know it's a spring market when everything really gets going . So it's kind of a fun and wild prediction of what the next three months are going to bring . Would you agree with that ?

Everyone's like , oh , let me hear it , let me hear it . And you're like what ? And you're like what , you're like welcome to Inspector Toolbot . And they're like , yeah , that's it .

But it was super weird , like and like the , the stuff that people know about me , because I just talk , you know , and people are like bringing up like personal things that I've never met before . They're like , hey , wouldn't you rather have a scotch ? And and I'm like actually , yeah , kind of , how do you know that ?

So , yeah , it got took a little getting used to because I mean we've only been obviously virtual and online , you know , since we started this , and to be in person and to to have a live fan base , it was a bit surreal , but once we kind of got used to it , it was just what a cool endorsement from the inspection community . I mean .

There was really only a small percentage of people who didn't hear about the podcast or haven't listened to it at some other point . So that was great .

They came up and they were all taking pictures and we got to meet them in person . I took pictures of them . We put them all over the internet and just like , look at everybody . It was just , you know , it's fun , it was like it was just a good time . Yeah , you know looking forward to the next one .

So now that we talked about the convention , which was super cool , and there's another one coming up later this year which you should look that up Internashi and Tapria are kind of putting that one on , but the next three months things changed in a way that I did not completely see over the last quarter , like we were pretty on , but there are some elements in

there that I didn't expect and the regionality of things is gotten really even deeper . So I was looking through CoreLogic , actually , and looking through some data . Interestingly enough , southeast Florida is we're just going to use Florida as an example for a moment Southeast Florida and Florida as a whole has become a buyer's market . What ?

Yeah , I know , and it is very much regional , and so here let me grab some data here , but I didn't expect it to be that regional . You know what I mean .

First of all , according to some of the data well , actually all the data , and CoreLogic was the one that I was kind of going off of for most of this Last year was one of the lowest home sales in three decades . A matter of fact , home sales fell to the lowest level at one point last year in three decades .

So within three decades was also the Great Recession . So less homes at one point last year were sold in the entire US than the Great Recession itself . That's pretty intense and a lot of guys will call and say Ian , what do I do ?

Business is rough , this and that , and unfortunately a lot of it comes down to hold on , and here's why hold on is important , because this ultimately leads to a buyer's market . So there's been a surge in Florida home sales , but mostly because Florida is starting to turn to a buyer's market .

So let's see Florida ended January of this year with 172,209 homes for sale , the highest level since Redfin , who's giving this data , began recording the data in 2012 . So whenever you have inventory , that's when it becomes a buyer's market . Sellers have to start competing for buyers again .

Now that's Florida as a whole , southeast Florida in particular had I forget the exact percentage . It was a little less than 10% of the homes taken off the market . Now you figure that'd be bad , but what happens is they use that as an indicator of it being a buyer's market .

So if a house is on a market for four or more months and then it gets taken off of the market , they say , hey , that seller couldn't get what they wanted for it , so they took it off to wait .

And that's an indicator that it's also a buyer's market , because otherwise , if you had five people competing for that one house , escalator clauses the whole nine yards , then it would be a seller's market . So Florida right now is a full blown buyer's market overall . But it's mostly being carried by Southeast Florida .

So Northern Florida , western side not as much , but overall , if you took it as a whole , full blown I say full blown it's on the upward curve of what a buyer's market would be . So it's got a couple more years before it peaks out . That's beautiful , wow . So it's got a couple more years before it peaks out , that's beautiful .

And you made me like start thinking a little bit , because just this last week my wife and I were commenting how in our neighborhood because , if anybody doesn't know yet , we live in Florida , just north of Daytona Beach , so we're in Northeast Florida but what we commented on was that there are more houses for sale even in our immediate neighborhood than what there

has been since we have moved here . There's quite a number of houses with the signs up but they're not moving .

I mean , those signs have been up for a while and that makes me think okay , so , like you say , maybe we're entering into a buyer's market from the sense of there being more inventory , but it seems like the prices I don't know , this is just , I have no data to back this up , but at least I look at the prices they're asking for those homes in this

immediate neighborhood it seems like the prices are still a blocker . It's like the value has escalated over the last few years and I don't know , just they're not moving . Some of them have been on the market for a few months with no movement . But I was just trying to put that in correlation with what you were just saying .

The less you have of something , the more valuable it is . Everybody says that , everybody understands that Right . So the more houses that are out there , they can't sustain those prices .

So if somebody puts a house on the market for $400,000 , it sits there for four months and gets taken off , the next person is going to say , well , they didn't get it , let me put it on for $380,000 .

Now , if it goes in three and a half months and it sells for $360,000 , now the next person is going to say , well , I'm going to put it on for $360,000 and start there . That's the way we lower the cost of the housing stock , which is very important , because price and a combination of price and interest rates is really what's keeping people from buying homes .

But it doesn't matter . You could have houses practically free . If there aren't houses for sale , it doesn't matter . We , as home inspectors , want to see more houses for sale .

We don't care how much they sell for ultimately , until we're buying a house ourselves , what we want is more houses for sale , and at 172,000 houses in Florida , that's the most number of houses that Florida in a long time has had for us to inspect , and that's a good thing . And we have to think of it as a cascading effect too .

So if there's eight houses in a neighborhood like yours that are for sale , some of them get taken off the market because they sit too long . Some go for a lower price , some sit there for six months to a year because they have to sell them . Now , all of a sudden , six months later , you have 14 houses for sale and then you have 18 houses for sale .

Now you have 20 and the stock will build . But then the more we go into a seller's market , not only do we get those inspections but cumulatively we get more home inspections per inspector in a couple of different ways . So a buyer in a buyer's market is going to be more cautious . Different ways . So a buyer in a buyer's market is going to be more cautious .

So a buyer is more likely to walk away from a home that they don't like the inspection for . So if I find roof damage and it's a $30,000 roof and they're like well , there's 20 houses for sale , I'll just go to the next one that doesn't have a roofing problem .

Now we get a second inspection and , ethically speaking , hopefully home inspectors are out there failing things hoping to get a second inspection and , ethically speaking , hopefully home inspectors are out there failing things hoping to get a second inspection . I hate that . Just say what it is , let the buyer decide .

But statistically , let's say , one out of five buyers ends up walking away from the house and hiring us again . Cool , so then , on top of that , sellers are more likely to get a pre-listing inspection because they're like , listen , I don't want to be one of my neighbors where the house sat here for eight months and didn't sell and the two failed inspections .

Let's just get a pre-listing inspection and we'll get it taken care of . Let's say one out of five for that . So now , instead of five inspections , we have seven . We increased what's that ? 20% increase .

Um , and , and the crazy part is , is that most of the like you , zillow and Realtorcom and whoever else is out there , redfin yeah , they're all for the year I don't know which part of the year , but for the year they're still predicting they're pretty bullish on house value , still increasing from the previous year .

I don't know if that I mean maybe like different local markets will obviously like play out at a different rate or in a different way , but I wonder , I wonder how they're coming on that , or if maybe the current move was unanticipated .

But , uh , florida , texas and louisiana right now florida is mostly into a buyer's market . Louisiana and Texas are getting there . Texas new construction inspections are really , really bolstering what is there for the infrastructure for the home inspection industry and kind of always has in a lot of ways . But those three states are heading into a buyer's market .

Problem is here's another example the Northeast and I'm not just talking like New York and Massachusetts , I'm talking like Pennsylvania to the tip of Maine and everything in between is very much not doing well for home inspectors , okay , or for buyers in general . Still very much deep in a seller's market Inventory's low and the same CoreLogic data talks's market .

Inventory's low and the same CoreLogic data talks about that Inventory's low . House pricing is going way up still multiple offer situations , the whole nine yards . It's still not as bad as it was a few years ago with all the skipping of the inspections and things like that .

There's less of that now , but places like the entire Northeast are why they say house prices are going to continue to rise . So you think about Florida . Florida , let's say , an average house is $400,000 . I don't know , I don't live there , but now they're still going to hang out at that price while we enter the buyer's market . So it may go down 390 .

It may go up and down and fluctuate a little bit , but it's going to hang right around $400,000 . So there's not going to be a downward sweep in pricing . That's going to be measurable nationally , whereas places like the Northeast it may go up another 3% this year , gotcha . So that's what sets off the numbers nationally .

But I did read an interesting article this week that was referring to data that Target just released and that it's sort of like warning sign the economy is slowing down , spending is down . It's sort of like warning sign the economy is slowing down , spending is down . So that is the first time in a while that we've heard that from one of the big retailers .

So I mean , potentially that's a good sign for interest rates easing as well in the near future here .

When interest rate's lower , basically the upper 20% of people in the US are the ones that make money .

I mean , there's guys out there that'll just borrow stupid amounts of money at 2% and 3% , like there were before , you know , in the twos rather and they'll go and they'll make 9% on it and pay back the loan over the course of time and then , with inflation , they're paying back a loan with money that's worth less , while they're still making 9% interest on it .

It's like the average person . We don't do that . That's not what the average person does . That's what business savvy and wealthy people do and all that stuff . So it's not going to help our industry if interest rates just go down .

Ideally for me , I would like to see house prices go down first throughout this year , and this is going to be an unpopular opinion because everybody talks about interest rates . But you know what ? It's an easy thing to say like oh , there's a crack in the foundation . The foundation must be bad . It's like well , it's a crack .

Let's talk about all the different other factors . Interest rates is just one small aspect . I'd like to ideally see houses sit on the market for a while and prices go down first . Then , as prices get closer to affordable not completely affordable , let's say , $420,000 house is now 390,000 . Then over the course of the year , and then interest rates drop .

That's ideally what I would like to see , because now we'll have inventory and lower interest rates . Because if you just lower interest rates right now , you're going to have another buying frenzy of the upper 20% of people buy all these houses , some will skip inspections and then we'll just lie flat on our faces again .

I'd like to see them paired together , but I'd like to see interest rates come down lower later on . Do you think interest rates are going to come down though ? Yeah , they're right around 7% or so .

But what does that relief look like and what does it translate to the average buyer's actual money that they're going to be spending each month ? You know . So , okay , we're sitting above 7% . If we come down below , you know , even to 6% , what does that actually mean to someone who's got a loan for , you know , 300 and some thousand dollars ?

You know , I mean I haven't done the math on it , but to your point , you need the actual ticket price to drop to for it to actually move the needle . Dropping down like a few points in the percentage point is not going to probably push them .

So a combination of those two factors I think I like the way you mapped it out is the most likely path to accelerating the number of transactions we're going to see in the market .

But now , with tariffs and other things going on , there's some uncertainty as to whether or not builders can still build houses relatively affordably and whether or not some of these big builders might have troubles later on for houses that they spec'd out at a certain price without any kind of escalator in their contracts with their buyers as to what materials are

going to cost . They could have some issues . So there's still some question marks as to that . But right now home building has slowed slightly because of that and you can't blame it . You can't blame big builders .

If you're a big builder working in three States and you're building hundreds of homes and you're like man , an extra dollar per two by four that could . That could cause us to make layoffs because we're doing 300 houses . You know there's a big , there's a big deal there .

So we'll see where that one lands , but right now that's slowed down a little bit and that's going to hurt more places like Texas and stuff , because there's a lot of states in the Northeast and Northwest . It's more of a tradition in most contracts , but most of them don't get phase inspections .

They just kind of move in and count on the town inspector to do a good job , which they never do , you know , yeah , so we'll see where some of those things land . I think building is still going to continue to happen , just at a slower rate , because of the perception of things .

But if you know that the next batch is going to cost X amount higher , you're not going to be selling even your current inventory at the premium rate that you were able to buy it for . You're going to try and hedge for that .

So that's why prices usually have almost an immediate effect on the end consumer , whether you're a home buyer getting those materials through your builder , or if you're going to Home Depot or Lowe's or any other lumber yard to get lumber .

So it will be interesting I haven't really paid much attention to those prices in recent weeks to see how they are responding , but I'm thinking in the next few months we'll have a better idea as to whether there is going to be any effect , how long these tariffs are going to be in place , whether there's alternative supply that can be tapped in other parts of

the world for similar pricing . We just don't know . We'll have to wait and see how it all trickles down .

So by the end of this year or whenever their fiscal year ends , these construction companies are going to need to do something with it . So they could be waiting .

And then we see a big boom later on in the year because they're like we've got to use up this lumber or we're paying tax on it , or they may say , listen , the taxes may be less of a hit than the increase in price and they may bite the bullet and carry it over into next year . That we're going to have to wait to see .

But right now building has slowed slightly , not incredibly , but slightly . I would encourage home inspectors outside of states like Texas , where there is building going on , to try to educate your market on phase inspections . That is a great market and 11th month inspections those have been doing well . But there's nothing like a three-phase inspection .

You have the phase one , phase two and the final that will keep you busy and keep you scheduled out . Uh , find these developments and finding the people is hard . The builders don't want you there , but a lot of builders still have that in their contracts . Sometimes it's mandated , sometimes it's not to be able to get phase inspections .

But buyers of new homes in my area I almost never do you hear of a phase inspection . Everybody says the same thing it's a new home , how bad can it be ? Then you go to places like I mentioned , texas again . It's like everybody gets a phase inspection . It's like , wait , you didn't get a phase inspection . Try to push those a little bit .

I think that's going to be an important part of staying afloat and not just staying afloat but owning some market share by creating that market , getting out there and saying , okay , how do I get people to get a phase inspection and then get them to hire me to do it ?

So if you can get in front of those two parties and you pitch them two different ways , mortgage people are like hey , do you want to protect your interest ? Do your clients get a phase inspection ? Because you don't want to have a mortgage on a home that three years from now they go to sell and they sell it you know short sale .

You know for 80 grand under what they paid for it . You know now you guys are stuck , that doesn't look good . You're like oh yeah , okay , let's talk about that . For attorneys it's like hey , you want to protect your clients from litigation and all this other stuff ? Consider phase inspections .

It's typically , for most , it would be at the point where , like phase inspections are almost like already you're looking to close , you know , and get financing and all that kind of thing . So even then it's not a done deal .

They'll just say , like , did you get inspected ? And like , yeah , sure , and then they move on . There is some open education that you can try and I've talked about this on a previous podcast like home shows . You go to those home shows and there's builders everywhere . So , listen , you can't be a builder's friend .

You just have to use , be used to getting spat on , metaphorically speaking , by these builders . You go to a home show and you set up a booth um , get a phase inspection , protect yourself from the builders . You're gonna get some dirty looks , but you're also gonna get some attention .

You know , um , hang up some pictures of things that you found on new construction . You know , discreetly , without mentioning any of the builders in the room , their name . Yeah , you know , don't , don't make enemies , but be like hey , this is from a new construction inspection .

Um , you know , if you have other inspectors that you know in other areas that have some pictures that they would like to provide , and you can do a backdrop . And you know , go to canvacom , c-a-n-v-acom , and you can get some marketing material there made and just say , is this something that you want ?

Do you want to have a flooded basement because they crushed the you know , the drain line going out into the yard when they were backfilling ? You know , yeah , no , well , here , think about getting a phase inspection . Work that into your contract , yeah , yeah .

I mean , I guess it's just trying to get yourself in front of the would-be buyers to say , hey , like you say , education campaign , obviously online is another thing you can try , but that's really hard Unless you know what you're doing . You're just going to be throwing money down the drain , pretty much .

If somebody needs to take statins for their , what's that for for your cholesterol ? Cholesterol Good , so obviously a high cholesterol . Now we all know . So if you take , if you need to take , statins for your high cholesterol , but you don't know you have high cholesterol , you're not looking up statins , right ?

So you need to know that you could have a potential issue before you look for the cure , right , so you need to have an education campaign . But the new construction agents , you can try that . Or you can do a social media campaign and run some ads .

So you know , like AJ and them , they do a lot of and Preston well , preston does mostly older homes that you know . Aj is doing newer homes and he's like hey , here's , here's something I found on a new construction that's going to draw more people to go . Oh , I need a phase inspection .

Um , you can run some ads and a video is always best for the ads of you finding stuff on a new construction inspection and say , okay , don't , don't get caught . If you're buying a home , you know , make sure . X , y , z .

It's like okay , so this is what's happening , so how can you fix it ? How can you get in front of it to get away from the whole .

Maybe a select few inspectors from the multi-inspector go , but most of the people we spoke to were , interestingly , were , husband and wife teams . There were so many of them I wouldn't say most , but many of them they were family businesses . You know , where the family was involved . Sometimes even the kids were .

You know , I think even of Preston how his family is like engaged with the business and learning and things like that . So , yeah , I do want to look more at the five out of six than the one out of six there , because the solo operators are definitely still the majority and the life and blood of the industry .

So there's a good mix in our industry , but I just thought it was interesting because that's the highest number that I think we've probably ever been at . Interesting . I think it's also good because I think that's where the market is shifting to over the next decade , and we're going to see that number grow of those part of multi-inspector firms consolidating markets .

That's what markets do . They consolidate over time , but I do think that it's an opportunity for us to market ourselves if we're a solopreneur and say , hey , we're still independently owned and multi-inspector firms .

They just have a lot of other advantages , like they can spread themselves out farther , a larger territory , cover short notice things for buyers and sellers and agents and all that Right , but I just thought that was an interesting side point .

So you know he hires on a couple of inspectors and he's growing and wanting to grow locally . So you know he hires on a couple of inspectors and he grows organically in that way . So now he's multi-inspector , which is , I mean , great scale path for any business . Right , that's ultimately what everybody's goal is .

But there are disadvantages , you know , like if you get sick , you know your truck blows a tire on the highway or you know what do you do ? You're kind of stuck . So there's advantages and disadvantages , but that's just a market trend . But here's my prediction , bian , and I don't know about yours .

I think the second quarter , q2 , march , april and May I think it's going to be a good spring . I think we're going to hit right in the middle , nationally , us and Canada I think we're going to hit right in the middle . I don't think it's going to be a nine out of 10 year , I think it's going to be a five out of 10 , maybe a six out of 10 .

I think new construction over this next quarter is going to be very important For markets that don't have a lot of new construction inspections . I do think that we should start pushing into that market a little bit harder there and create some education and try to get ourselves in there .

It's not going to be easy to get our foot in the door , but I do think it's worth it . I don't think interest rates are going to go anywhere and I don't think three months is long enough to see any drastic price drop . But for guys in Florida , louisiana and Texas , congratulations .

You are the first ones to start pulling out of this nosedive that we've seen for the past couple of years in our industry . Home inspections are going to be a little bit better , the only problem that you guys will see . Besides Louisiana , florida and Texas are two out of the three top most saturated markets for home inspectors .

So you're going to still see that . But fortunately for you , if you're still around , those that have left have left some market share for you . So I think they're going to ride it out for a long time . But us up in the Northern territory and out West , we're still working our way out of the mud a little bit . But these are good signs .

I mean over this year and into next and 2026 and 2027 , we're only going to see upward trends for the most part , unless something big and crazy happens .

So if you maybe followed this episode of the podcast to see how especially Ian does his analysis to make these determinations , use some of those inputs in your local market . Look at how many houses are there for sale , what the price trend is going Are we going up , are we going down ? What is your new construction stats looking like ?

And that'll help you regionally to see how you can adjust either up or down expectations for your local area .

And you can set filters for this on things like Zillow and other areas and I'll just let you know hey , this is off the market or this is back on the market . Here's a price drop on this house . I do it for my own local area . Every time a house drops in price , I get alerts all over the place . I'm just a freak that way .

I like to watch that , but keep an eye on those things . Once that starts happening more anecdotally , you can say okay , cool , that's a good trend for us as a home inspection industry . Look at the number of houses on the market . If there's 300 houses in a 20-mile radius of you right now and then later this year there's 412 ? Cool , wow , okay .

Then later this year there's 412 . Cool , wow , okay . That that ? That means that hypothetically soon , the prices of those houses are going to start dropping and that also means that in six months , you'd probably have six months .

After that , you'd probably have four or 500 houses in the market and now it's going to become a buyer's market and you're going to start to see that 40% increase that I that I told you about at the beginning of the podcast .

Usually you peak out in a year and then you start to drop and they I don't know the exact cycle number , so maybe I shouldn't say that it peaks out faster than than this felt like , but the pandemic that just totally changed the whole cycle of things . We tend to stay in a buyer's market .

So , uh , to hear there's finally some evidence , some actual hard evidence of of things moving in the other direction , um , even for me not as a home expector it makes me excited to to see where the market's going to go and how , how it's going to benefit everybody . I'm looking forward to that .

Once people get used to that , then they'll start to buy a little bit more , save more and , as we mentioned on our Q1 podcast , buy as a family , borrow from family and things like that and people make it work and then prices will hypothetically level out over time .

But if you're just newly looking for a house , you're just kind of entering at the point where prices are now but that that takes a few years to probably turn , turn the corner on that , like you're saying . You know .

But otherwise thank you for being on BEYOND and everybody , thank you for listening in to our Q2 market outlook and look forward to having everybody listen to our next episode of Inspector Toolbelt Talk .

Also , don't forget to check out our app for home inspectors scheduling and report writing all in one easy to use app . Check it out now at inspectortoolbeltcom .