Joseph DeNaro, a realtor at Realty ONE Group Emerge, says buyers in the luxury secondary home market are more likely to walk away from deals they would have accepted a year ago. This reflects a shift in how economic uncertainty is influencing buyer decisions.
DeNaro, who specializes in New Jersey’s beach market, sees this trend across all price points. Even buyers with long investment horizons are hesitant to overpay given the current economic outlook. “They’re not sure where things are going, so they don’t want to overpay,” DeNaro says.
This cautious approach stands in contrast to the pandemic and immediate post-pandemic years, when buyers felt confident that property values would keep rising. Buyer confidence has faded. Even buyers with significant financial capacity are now more selective and less willing to accept today’s prices without question.
Shift From Market Confidence to Buyer Caution
The change in buyer behavior is most obvious in negotiations. During the market’s recent peak, buyers often accepted rising prices, believing they would recover any premium paid over time. DeNaro says buyers are more likely to hold back or walk away if they believe a property is overpriced.
The cautious approach is not limited to first-time buyers or those stretching their budgets. Experienced buyers and investors, who are often the most familiar with the market, are also seeking better deals. “They’re definitely looking for a better deal than they did,” DeNaro says.
He attributes this to a mix of higher interest rates, tariffs, and stock market volatility. These factors have introduced uncertainty about future property values, making buyers reluctant to pay a premium.
As a result, buyers are more willing to walk away if a deal does not meet their expectations. This trend is visible in properties under $1 million, in the $1 million to $3 million range, and at higher price points. “You see a hold back, or a little apprehension,” DeNaro adds.
Greater Buyer Selectivity Extends Negotiations
Buyers’ increased selectivity is leading to longer negotiations and more frequent price reductions. Sellers who once expected offers close to the asking price are now facing buyers willing to wait for better terms.
“In the past, if inventory was low and someone wanted a property, they would pay the price,” DeNaro explains. “Now, people hold out more. I’ve seen buyers walk away, saying the price is too high and they’re not ready to proceed.”
The shift is challenging for sellers who have not adjusted their pricing expectations. DeNaro often has to guide clients through price reductions, a difficult process for those still anchored to the peak market values of recent years.
Buyers are also conducting more thorough due diligence. They are examining properties more closely and are less willing to overlook flaws or accept explanations that might have sufficed in a more competitive market. The increased scrutiny gives buyers more leverage to negotiate pricing and terms.
Market Slowdown Varies by Price Range
The current market caution is not limited to one segment. While the $1 million to $3 million range remains more active, DeNaro points out that both the sub-$1 million and above-$3 million categories have slowed more significantly. “Below a million and above three million have really slowed more than the million to three million,” he says.
The slowdown is most visible among buyers considering secondary or investment properties rather than primary residences. These buyers can easily delay or skip a purchase, and many are choosing to wait amid economic uncertainty.
DeNaro notes that today’s buyers are rethinking the long-term value of secondary properties. Where buyers once assumed steady appreciation, they are now weighing potential risks and future market conditions more carefully. “They’re still saying, I am not really sure I want to overpay for this, because I don’t know where things are going,” he says.
Economic Factors Influence Buyer Decisions
Interest rates, tariffs, and stock market swings are the main forces behind the shift in buyer behavior, according to DeNaro. These factors have created economic uncertainty and made buyers less willing to commit to large purchases without clear value.
“I’m definitely watching interest rates, tariffs, the stock market, because they all affect how people think,” DeNaro says. “That translates directly to real estate transactions.”
Sophisticated investors and repeat buyers are especially sensitive to these factors. Even if they can afford to buy, they are more likely to walk away from deals that do not meet their expectations, choosing to wait for better conditions instead.
Economic uncertainty is not only reducing demand but also changing how buyers approach each step of the transaction. DeNaro expects this cautious mindset to persist until there is more clarity about interest rates, tariffs, and the broader economic outlook.
Spring Market Outlook Remains Uncertain
Despite the current caution, DeNaro is cautiously optimistic about the upcoming spring market. He believes that if interest rates come down and government policies become more predictable, buyer confidence could return. “I have a feeling it’s going to start to stabilize and maybe strengthen again as interest rates come down and things settle,” he says.
However, he also acknowledges that the shift in buyer psychology may last even as conditions improve. Buyers may continue to insist on better pricing and more favorable terms than during the market peak.
Realty ONE Group Emerge is adjusting its approach by helping buyers and sellers set realistic expectations in a more selective market. As economic uncertainty continues to influence decisions, DeNaro says adaptability will be crucial for success in the luxury secondary home market.
Outlook: A More Deliberate Luxury Market
The new reality is a market where buyers are more analytical and less willing to take on risk in anticipation of future appreciation. The shift is forcing sellers to be more flexible about pricing and prompting agents to play a larger role in guiding clients through negotiations.
As the spring market approaches, the key question is whether lower interest rates or improved economic stability will be enough to restore confidence and activity. Until market conditions stabilize, buyers are likely to remain cautious. They will use their leverage to secure favorable terms and walk away from properties that do not meet their standards. For sellers and agents, success will depend on recognizing this shift and responding with strategies that reflect today’s more careful, value-driven approach.
