Why More Home Deals Are Falling Apart Right Now (And How I’m Helping Clients Avoid It)

Lately, one of the biggest conversations I’ve been having with clients and honestly with other agents, too, is about contract cancellations.

They’re up. And not just a little.

According to Redfin, nearly 13.7% of homes that went under contract in January 2026 ended up falling out of escrow. That’s the highest January we’ve seen going all the way back to 2017.

When I look at that, I don’t just see a stat; I see a disconnect.

What’s Really Going On

From what I’m seeing on the ground (and what this data confirms), buyers and sellers just aren’t on the same page right now.

  • Sellers are still thinking it’s a hot market where they don’t need to do much—price aggressively, skip concessions, and wait for offers.

  • Buyers, on the other hand, are seeing more inventory and more options. They’re taking their time, comparing homes, and being a lot more selective.

That gap in expectations? That’s where deals start to fall apart.

Why Buyers Are Walking Away

There’s no single reason, but a few patterns keep showing up:

  • Inspection issues – Buyers are using contingencies more than ever.

  • Affordability hitting reality – Monthly payments are higher than expected once everything is factored in.

  • More choices – Buyers aren’t feeling pressure to settle anymore.

Simply put, buyers have leverage again, and they’re using it.

The Bigger Trend

We’re also seeing something we haven’t seen in a while:

There are more sellers than buyers in many markets.

That shift matters. It means:

  • Homes are sitting longer

  • Buyers can negotiate more

  • And if a deal doesn’t feel right, they’re willing to walk

That’s a big change from the past few years.

What I’m Telling My Sellers

This is where strategy matters.

If you’re thinking about selling here in Hawai‘i, this is not the time to “test the market.” The sellers who are winning right now are the ones who are:

  • Paying attention to real-time market data

  • Pricing correctly from day one

  • Preparing their homes to stand out

  • Being open to negotiation

I’m having very direct conversations in my listing presentations right now:

“Cancellations are at record highs—let’s make sure your home isn’t one of them.”

Because the truth is, most canceled deals don’t come out of nowhere—they come from misalignment from the start.

What This Means for Buyers

If you’re a buyer, this is actually an opportunity.

You have:

  • More options

  • More negotiating power

  • More time to make the right decision

But it also means you need to be clear on your numbers and confident in your decisions—because even though you have leverage, the right homes are still moving.

 

At the end of the day, this market isn’t bad. It’s just different.

And more than ever, it’s about understanding what’s really happening right now, not what worked a year or two ago.

 

If you want to talk through what this means for your situation here in Hawai‘i, I’m always here as a resource.