How to Price Your House Right in Today’s Market

A few years ago, homes were flying off the shelves. They often received multiple offers at prices well above the asking price. It felt like you could name your price, and buyers would still be lined up at the door.

But today’s housing market is different. Buyers are becoming more selective as inventory has increased. Homes are sitting on the market a bit longer. More sellers are also cutting their prices.

So, how can you still succeed in this market? It all starts with one essential step: pricing your house right from the start. This has become more important than ever and can truly make or break your sale.

Understanding the Price Disconnect Between Buyers and Sellers

A recent survey from Realtor.com reveals that 81% of home sellers believe they’ll receive their asking price or more. However, actual sales data indicates a growing gap. There’s a stark difference between what sellers expect and what buyers are willing to pay.

An annual report from the National Association of Realtors (NAR) highlights that 44% of recently sold homes went for less than the asking price. Moreover, one in three sellers had to reduce their price at least once before selling. This trend reveals that expectations are misaligned with today’s market reality.

Check out the graph below. It uses data from Redfin to illustrate that asking prices (blue line) are increasingly higher than actual sales prices (green line):

This graph tells us something important. Not all buyers are willing to pay what sellers are asking. This doesn’t mean you can’t sell for a great price, but you need to start with a price reflecting what buyers are willing to pay in today’s market.

The Dangers of Overpricing Your House

Many sellers think pricing their home high at first gives them more room to negotiate. However, the truth is, an overpriced home can linger on the market and deter potential buyers.

Buyers are savvy. When they see a property sitting for an extended period, they may start to wonder what’s wrong with it. This can result in fewer showings, reduced interest, and, ultimately, a price cut to regain attention. As Realtor.com explains:

“By getting the right price early on, you can increase the odds buyers will be interested in the home. In turn, this decreases the chances the home will sit on the market for a lengthier timeline, also reducing the odds you’ll need to lower the listing price.”

The longer a house remains unsold, the harder it becomes to sell.

Seize the Opportunity by Pricing Your House Right

To prevent this common mistake, consult an agent familiar with the local market when determining your asking price. Your agent will analyze recent local sales, buyer trends, and inventory levels to find the optimal pricing sweet spot for your neighborhood. Keep in mind, pricing strategies can differ significantly based on your location.

In addition, it's worth noting that home prices have risen over 57% over the past five years. Even if you price your home slightly below your target number, you will likely still be positioned favorably in terms of profit.

With guidance from a knowledgeable real estate agent, you’ll attract more attention and avoid having your house sit on the market for too long. This strategy will increase your chances of receiving a strong offer.

Today’s market proves that the right price works. As Mike Simonsen, Founder of Altos Research, explains:

“. . . the best properties, well priced are selling quickly in most of the country.”

Conclusion: A Revised Market Reality

Though the market has changed over recent years, your opportunity to sell remains intact. The key lies in creating a suitable pricing strategy. Let’s discuss the current prices in our area and determine what price will help your house sell quickly and for top dollar.

To succeed, it’s crucial to remain aware of the shifting landscape of real estate pricing. Whether you’re a first-time seller or have experience, understanding these dynamics can be the difference between a swift sale and a long wait.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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