The share of home listings with price reductions hit another high in April, indicating that sellers are increasingly overestimating what their house will fetch in the current market. Home sellers are pricing under the impression that prices are on a continual rise when the reality is that prices have softened this year. Buyers are taking longer to make a home buying decision. And who can blame them? It is not easy to come to grips with the fact that the rise in interest rates greatly lowered how much house they can buy compared to a few years ago. This buyer reluctance means lowering prices to get homes to sell.
The problem is most serious in the South and West, but it is happening here in Massachusetts too. Despite these warning signs 81% of potential home sellers predict they would get their asking price or higher in a Realtor.com survey conducted in March.
In the past 3 months there have been 2,418 Single Family homes with a price drop. For the same time period last year there were 1,794. For condos the numbers are 1,418 vs 961 in 2024.
The fact that all houses were going in bidding wars during the COVID years may have skewed the perspective of home sellers who bought during that frenzy.
However, overpricing your home based on a gut feeling or wishful thinking can be a big mistake. For sellers who price unrealistically, the consequence is often a listing that grows “stale,” lingering on the market for an unusually long time despite multiple price reductions.
Stale listings can raise red flags for buyers, who might fear that there is something wrong with the home. And the number of stale listings is increasing.
Nationally, homes typically spent 50 days on the market last month, four more than a year ago and the longest median time on the market for the month of April since 2020.
If you overprice your home, it’s going to sit on the market, and it’s going to get stale, and then you’re going to be chasing the price down to what the market’s willing to pay for it.
There are exceptions. I am still seeing bidding wars. But those are for a select few homes in mint condition in highly desirable locations. Even those are getting fewer bids compared to bidding wars during COVID. And, more important, those homes started with a listing price under market value. To get top dollar it is more important than ever to have a picture-perfect home. It is too much info to post here so be sure to follow us on Social Medial for upcoming info on preparing your home for a top dollar sale and effective staging.
All this is to say that it is more important than ever to listen to your agent when it comes to determining a price at which to list your home. This is not the right market to test out a high price. If you want to get an idea of what we think the market value of your home is, just send us the address and any important details to info@michellelanerealestate.com