Important points
A lack of showings, low online engagement, and no significant offers could mean your home is overpriced. Approximately 20.2% of active listings nationwide have lowered their asking prices. The most effective price reductions are meaningful enough to attract new buyers and are often around 2% to 5%. In some cases, seller concessions can be more effective than lowering the price.
In today’s housing market, buyers have more options and more bargaining power than they did just a few years ago. About 20.2% of active listings nationwide have lowered their asking prices, and many homes are taking longer to sell than they did a few years ago. If your home isn’t attracting showings or offers, adjusting your price can reignite interest and get the sale back on track.
Pricing strategies in today’s market
Gone are the days of the pandemic housing boom, when sellers could list their homes for a hefty premium and watch multiple offers come to fruition in a single weekend. Today’s real estate ecosystem requires flexibility. Nationally, approximately 20.2% of all active listings are subject to price reductions.
Although down slightly from 21.0% a year ago, price cuts are still much more common than before the pandemic. Sellers are now more realistic about pricing from the start, reducing the need to make adjustments later. Still, buyers generally have more choice and bargaining power than they did just a few years ago, making accurate pricing more important than ever.
“Earlier this year, we saw price declines quite often as homes remained on the market and sellers tried to attract buyers. However, sellers have become more in tune with current market conditions and are pricing accurately from the start to minimize risk.” – Justin Gomez, Redfin Premier Agent
How to avoid getting a high price on your home before listing it
Prices for the next 30 days, not the past three years: Avoid looking at what homes in your neighborhood sold for at the peak of the pandemic boom. Instead, have your agent pull neighborhood comps from the past 30 to 60 days to see what active buyers are actually paying right now. Prices below psychological brackets: Most buyers have strict search filters on their real estate apps (such as setting a search cap of $400,000). If you price your home at $405,000, you will completely hide your property from anyone who filters up to $400,000. The $399,000 price tag immediately attracts many buyers. Consider local inventory: Real estate is very local. If you live in a cool Sunbelt metropolitan area like San Antonio or Phoenix, more than half of sellers are offering discounts because inventory is high. If you’re in a competitive market like San Francisco, inventory is tight and you have more leverage to protect your inventory numbers. Test early: Tools like Redfin Early Access allow sellers to market their home as a coming soon property before it officially hits the market. Early feedback from buyers and agents can help you gauge interest, adjust your pricing strategy, and avoid price cuts later on.
How long should I wait before reducing my asking price?
Timing a price drop requires more data than emotion. If you drop the price too quickly, buyers may think there’s something structurally wrong with the home. If you wait too long, your home will become “stale listed” and lose its competitive edge.
The right schedule will depend on your market and the level of buyer interest in your home. Watch out for the following signs during the first few weeks after going public.
Indicates it’s time to lower your asking price
Looking for a buyer but not making an offer
If your listing has views, saves, and impressions, but no serious offers, buyers may like the home but feel the asking price is too high.
Feedback consistently mentions price
Pay attention to feedback from buyers and agents. If multiple people feel the home is too expensive or say it compares unfavorably to nearby lower-priced properties, it could be a sign that the market needs to adjust.
Competitive housing prices are low
If similar homes in the neighborhood come on the market at lower prices or sell faster, buyers may choose those homes first.
Offer is significantly lower than desired amount
Low offers can be frustrating, but they often provide useful information. If multiple buyers are significantly lower than your asking price, it could be a sign that the market values the home differently than you do.
The appraised value of the home is less than the asking price
If the appraised value is below list price, buyers with financing may have a hard time moving forward without renegotiating.
If you see some of these signs in your listings within the first few weeks, it may be time to reconsider your pricing strategy. Waiting too long can increase the number of days on the market and cause buyers to wonder why the home isn’t selling.
How much should we lower the price?
Avoid the temptation to dip your toe in the water when discounting. A series of small nominal price declines (such as a $2,000 reduction in price on a $500,000 home) often go unnoticed by buyers. They may not generate new interest, move your home to new searches, or significantly change the buyer’s perception of value.
To make an impact, consider reducing prices by 2% to 5%.
For a $400,000 home: A 4% drop equates to a $16,000 reduction. This brings your home down to $384,000 and instantly catches buyers who had set their home search filters at $390,000 or $385,000. National Standard: Across the United States, sellers who lowered their asking price reduced their prices by an average of 4.0%.
One meaningful price reduction is often more effective than a series of small price reductions over several weeks.
Should you lower your prices or make concessions?
Lowering the price may not be the best solution. If buyer hesitation is driven by macroeconomic factors, such as high mortgage rates, rather than the home’s intrinsic value, seller concessions can be a more effective way to attract offers.
With seller concessions near record highs in many markets, buyers increasingly expect flexibility during negotiations.
If your problem is: Then choose: Benefits of the strategy Your home isn’t attracting enough buyers Direct price decline Increased visibility and triggers new real estate portal alerts for buyers. Buyers love their homes but struggle with affordability. Seller Concessions Help reduce upfront costs and monthly payments.
Option A: Direct price reduction
Great for: Increase the visibility of your lists. The real estate portal re-warns all buyers who had previously saved their homes that the prices have dropped. It also categorizes homes into low price filters.
Option B: Seller concession
Best for: Helping buyers manage upfront costs and affordability concerns. In exchange for reducing the home price by $15,000, we can also offer a $15,000 credit that buyers can use toward closing costs, repairs, down payment costs, or other eligible home purchase costs.
In some cases, seller concessions can be more attractive than price reductions because they reduce the buyer’s out-of-pocket costs while maintaining the asking price. One common example is mortgage interest buydowns. This helps lower the buyer’s monthly payments during the early stages of the loan.
avoid chasing the market
The ultimate risk of waiting too long to lower the price is that the market may move on without you. In areas where inventory is growing, setting your prices too high will always put you one step behind what buyers are willing to pay. By proactively aligning the price of your home to current market conditions and comparable sales, you can maintain momentum, attract stronger offers, and increase your chances of selling faster.
