Although the U.S. residential inventory—the number of homes currently listed for sale—is on the rise, the fact that it remains well below normal continues to tilt the supply/demand balance in favor of sellers. Add that to the vigorous demand experienced throughout the country, and it’s not surprising that analysts have decided this fall will continue “sellers’ market” conditions.
That’s bracing news for homeowners who have been thinking of adding their homes to the listings. But when it comes to formulating the all-important asking price that will shape its reception, the strength of the market is only one consideration. Checking out similar properties on the listings will provide a good indication of the price range the market currently supports. In most instances, it should confirm that ‘sellers’ market’ tag.
But there is a caution flag to be noted, too—about the balancing act that goes into creating the best asking price. Especially in a strong market, the temptation to overprice is a real threat. A while back, realtor.com listed a humorous summary of the most common (but “terrible”) reasons homeowners can convince themselves to overprice their property. These foibles may be humorous—but they are real temptations they represent:
- Your décor touch is pure gold (you think).
- Your home has fine detailing, but in ways that aren’t important to buyers.
- You’re focused on a price that’s what you want rather than what buyers will pay.
- You built the house yourself—so you are “emotionally invested.”
- You’ve priced to give yourself negotiating wiggle room (but that’s not how real estate works).
That last point may be based on a sometimes-valid negotiating principle, but it overlooks one of the most powerful results a listing’s asking price can promote: the creation of interest and demand. Especially in a true seller’s market, where multiple offers can create competition between buyers, the right asking price can spur interest and demand. That doesn’t just foster a quick sale—it can also induce buyers to devote more energy into thinking about what will make a winning offer instead of wangling the lowest price.