Lafayette Real Estate Market Update: Why a Crash Isn’t Coming, and What the Data Really Shows
Market Speed: Slowing Down But Still Moving Fast
People often ask when the real estate market will crash or when homes will become affordable again. The honest answer is: the market is not going to crash. Instead, things are slowing down from an extreme pace—like going 90 mph in a 60 mph zone—to a still fast but more manageable speed, around 75 mph in a 60 mph zone. While the market has cooled somewhat, it’s still moving quickly. Let’s dig into the data chart by chart to understand what’s really happening.
Average Daily Inventory: More Homes On the Market
One key indicator is the average daily inventory—the number of homes for sale at any given time. As of July 2025, there were about 327 homes available on average, which is a bit higher than expected and the highest level seen in several years. This increase points to more homes sitting on the market longer, rather than a surge in sellers putting homes up for sale.
New Listings: More Homes Coming, but Not Drastically More
New listings have trended upward this year, with July 2025 showing 242 new homes listed, a 32% increase year-over-year from around 184 listings last July. While this increase signals more homes entering the market, the absolute number—just about 40 to 50 more homes—is still modest. This supports the idea that although more homes are coming onto the market, it’s not a flood, and the market is adjusting slowly.
Closed Sales: Fewer Sales Amid Increasing Inventory
Closed sales have declined slightly, with 177 sales in July 2025 compared to 193 last year—a roughly 8% drop year-over-year. This trend suggests that even as more homes are available, fewer are actually selling, which means homes are staying on the market longer. However, this slowing pace is considered healthy compared to the previously extremely fast market.
New Pending Contracts: Offers Are Still Coming
Pending contracts—homes with accepted offers but not yet closed—were at 158 in July 2025. This is down 15% month-over-month but up 21% year-over-year, reflecting ongoing buyer interest consistent with seasonal patterns. The pattern shows the market isn’t changing drastically; it’s slowly returning to a more balanced rhythm.
Market Momentum: Median Days on Market Increasing
The median days on market, or how long it takes a home to sell, increased to 19 days in July 2025—up 73% month-over-month and 217% year-over-year. While this might sound alarming, 19 days is still very fast historically and equates to about two and a half weeks. For context, median days on market have traditionally been in the mid- to upper-20s for a balanced market. So while sales are slower than last year, they remain brisk.
Months of Inventory: Still Below Balanced Levels
Months of inventory—how long it would take to sell all current homes on the market at the current sales pace—was 2.2 months in July 2025, up from 1.2 months a year ago. A balanced market is typically around three months, meaning we still have fewer homes available than buyers need. This confirms that despite more inventory, there is still a shortage of homes for sale in Lafayette.
Home Prices: Slight Increase Over Last Year, No Crash in Sight
The median home sale price in July 2025 was $320,000, a modest 2% increase year-over-year but down 3% from the previous month. This slight fluctuation is typical seasonally and does not indicate a price crash. Historically, real estate values tend to appreciate over the long term, with brief, small declines along the way. So while prices remain high, a sudden drop is unlikely.
Sale Price vs. Listing Price: Sellers Still Getting Close to Asking
In July 2025, sellers in Tippecanoe County received about 97.3% of their asking price on average, down just 1% month-over-month and year-over-year. This margin difference mostly reflects typical concessions for repairs or down payment assistance and is considered normal. Essentially, sellers are still achieving close to their listing prices in today’s market.
Conclusion: A Fast Market That’s Cooling, Not Crashing
The Lafayette real estate market remains robust but is shifting from an extremely heated market to a steadier pace. Inventory is rising, sales are moderating, and homes are staying listed a bit longer—but the fundamentals like pricing and sales velocity remain strong. Rather than a crash, the market is adjusting to a more sustainable speed.
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