2025 Carmel Real Estate Market | Local Data, Real Results

Anemic may possibly be the best description of the past year’s real estate activity. 2025 was a year of mixed results and a greatly reduced population of transactions to draw conclusions from. The charts below are filtered to data from our key north-suburban communities, serving as a barometer of the local market. If you would like reports run for your specific neighborhood or community, let us know. Our specific analysis provided to homeowners and clients will be far more enlightening than the canned “Comps” or “Pricing Opinions” you may be accustomed to seeing. 2025 was a year of mixed results nationally, which likely contributed to much of the media hyperbole you may have heard. However, our local assessment differs from most of what you may be hearing.

Interestingly, the upside of the results is that many homes in our local market are still selling well, reasonably quickly, and at sustained higher-end pricing. Of equal interest is that many homes are not. For those of you who read our 2025 prediction, you may recall our caution against seller overconfidence going into 2025. Selling in two days with multiple offers, all over List Price, likely to be ending. That proved to be prudent and accurate.Taking an eyes-wide-open “realist” approach positioned our clients to achieve the successes they had either hoped for or anticipated.

Yes, interest rates ticked lower this year. Rates are generally in the 6% range. This is an improvement over last year’s 7% range, which was an improvement over the recent highs, hitting around 8%. We predicted that lower interest rates would likely lead to a slower market, and they have. This is contrary to public thinking, so why? Simple, human nature. Many buyers want the best rate they can get (to minimize their monthly expense or afford the most home possible) and hold out committing to buying a home to “call the bottom” of the rate movement. Understandable, but probably not the strategy that leads to maximum success. Our buying clients found success taking action contrary to the Herd.

Fortunately, inventory improved. National statistics and local data indicate that more homes have come on the market in 2025 than in the prior couple of years. However, locally, this improvement is hard for the public to acknowledge because it is hard to observe. More importantly, the improvement is from a historically low volume between 2020 and 2024, which is still well below the Mean of annual home sales. So “less challenging” is hardly the environment home shoppers seek.

Interestingly, buyer volume was down. This dynamic helped bring the market into better balance, which actually makes for a better-functioning marketplace. The number of potential buyers, as measured by showings and offers, is lower than in the prior few years. Our opinion as to why is two-fold. Many buyers found a home in 2023-2024, and many simply gave up looking due to a lack of success. These buyers had given up, not because they did not see a home they wanted. Many buyers found they simply could not compete with what it took to acquire a home. While this is unfortunate in 2025, it may actually be a positive for 2026.

Days on Market increased. Rather than the 2-3 days on the market of the past three years, homes are routinely on the market 20-30 days. This is the historic norm – the Mean. We have simply regressed to the Mean. This is healthy, as in prior years, if a property did not sell in the first weekend, the public’s impression was that there must be a problem with the home. This was bad for both buyers and sellers. Many buyers missed out on homes they never even got to see.

Initial Listing Prices are continuing to be tested higher, but with diminishing results. With homes sitting on the market for longer, we are seeing more price drops. Over the past 6-12 months, we have been seeing offers being made below the then-current list. Our approach to pricing is essentially what we employed as a custom home builder – it works. It certainly works better than the more routine price high (to “win” the Listing) and then cutting the price quickly, as we often see many people attempt. Yes, they’ll sell a home. But our clients are finding that selling well is far better than simply selling. And for buyers, the maxim is the same, just opposite. Buying is easy; buying well is our objective.

In short, the key to success in 2025 was to be positioned better than the competition. Do as the herd does, and you should expect a herd result. We worked with our buying and selling clients to be out ahead of the competition. Not so much with the overly simplistic dollars, but with a more strategic presentation of the two more important factors: the home and the people. Our buyers (and their Offers) were more competitive – often without being the highest price. Our sellers’ homes were in prime presentation to outperform their neighbors – again, not based on a lower price. In short, our clients won on both sides of the transactions. How do we accomplish this? This discussion is reserved for clients and takes far more time and space than is available here.

The key is planning. A better strategy, diligently implemented with confidence and conviction, often leads to superior results. This was the case for our clients in 2025. Our 2026 Forecast will be released next week. Hint: We expect an improved year and are already talking with people to put them in a position to achieve their desired results. Call us.