If you’re putting your home on the market this summer, you may want to temper your expectations.
Gone are the days of aggressive bidding wars during the housing market frenzy of 2021 and 2022. In the latest sign that dynamics have shifted in favor of buyers, the average single-family home sold for nearly 1% below its final listing price in March, according to a report released Thursday by Realtor.com.
“We’ve gone from a market where sellers could price aggressively and still get above asking, to one where overpricing has real consequences,” Joel Berner, senior economist at Realtor.com, said in a statement. “Buyers have more leverage than they’ve had in years.”
What’s key in today’s housing market is getting the listing price right from the start, according to Berner. The four-week mark is especially crucial now, as that’s when sellers are entertaining competing offers or will need to cut the listing price, he said.
Indeed, the Austin-based real estate site found that those homes that sold at the four-week mark closed 1.8 percentage points higher than the average home sold during that month. And sellers fared even better if their homes went into contract during the first two weeks on the market, according to the report.
By contrast, sellers who let their homes languish on the market are faring the worst. When homes sell 18 weeks after being listed, they close 1.3 percentage points below the monthly average, according to the findings.
“Today, an overpriced home doesn’t just sit—it gets stale, loses leverage, and sells for less than it would have if it had been priced right from the start,” Berner said.
CONDOS, SELLERS IN SOUTH FARE WORST
Of course, not all housing markets are experiencing the same type of softness.
In what’s likely not news to people trying to sell a condo or townhome, the market is especially soft. Listing prices for condos have fallen 6% since 2022, and the average condo is selling for 2.1% below its final listing price.
What’s more, the particularly hot pandemic-era housing markets in the West and South have cooled. In fact, many metro areas in these regions have more homes for sale now than in 2019, according to a previous Realtor.com report, and less competition among buyers helps explain why sale prices have dipped below asking prices.
While the Northeast is the only area of the U.S. where the average home is still selling for more than the asking price, that same dynamic could soon return to the Midwest. Sellers in these regions generally have more bargaining power as the inventory of available homes generally hasn’t returned to pre-pandemic levels.
“Where you list matters as much as how you price,” Berner said. “Sellers in the Northeast still have the wind at their backs. In the Sun Belt, the calculus has flipped—buyers have options and they know it.”