3 tips for selling your home in today's housing market
That's Joe Manausa, a real estate broker in Tallahassee, Fla., talking about today's home seller in a YouTube video. What's the lesson? Did the seller back down on their price too soon? Overprice the home from the beginning? Sell too cheap?
Nationally, almost 1 in 5 home listings (19.1%) had price reductions last month. According to the Realtor.com May housing report, price reductions were twice as common in the South and the West as in the Northeast.
In a time of shrinking affordability and mortgage rates on par with the historical average — but well above buyer expectations, home sellers face new challenges in today's real estate market.
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Learn more: What home improvements should I bother making before selling my house?
Manausa said the price reduction scenario above reflects how sellers are adapting to "a more balanced" market. During the years of low housing inventory and historically low interest rates, price reductions were rare. Sellers could command top dollar.
"Now with inventory climbing and borrowing costs higher, sellers are finding that pricing aggressively doesn't always lead to quick offers. Adjusting prices is a natural response to these conditions, not necessarily a sign of weakness," he added.
Here are three strategies home sellers should consider to price a home and sell it in a reasonable amount of time.
Dig deeper: Will mortgage rates ever be 3% again?
Ask your real estate agent about housing inventory in your market.
Jake Krimmel, senior economist for Realtor.com, told Yahoo Finance in a phone interview that year-over-year housing inventory is up 30% nationally.
"So you're thinking, there must be a glut of homes on the market. It must be a horrible time to sell," Krimmel said. "But it's important to zoom out to the larger context. So we're still nationally around 14% below the pre-pandemic norms for inventory. For every 100 homes that were on the market then, we're only back to about 86 right now."
That's the national view. The reality of real estate is always local. Take New York City, Boston, and Hartford, Conn.
"These are places that were in demand, and prices were going up throughout the pandemic. They didn't build much, and their inventories have not recovered."
He noted that as a result, the housing markets in those metros are much tighter and look much like they did during the pandemic.
Learn more: The best mortgage lenders right now
Median list prices can also be a guidepost for setting a sales price. For example, according to Realtor.com, median prices in Baltimore are up 10.4% year over year. Cleveland prices are up 3.8%.
Though not typically known as hot housing markets, Krimmel said these markets still have limited housing supplies. "That means prices are still going up, and sellers are still able to get that high price that they want," he added.
If median prices are rising in your market, it's a seller's market. If prices are declining, it's a buyer's market.
Which brings us to time on the market. Be aware of the trade-offs between the price you want to sell your home for — versus how long it will take to get that price.
"What is going on in Northern California might be different than what's going on in Southern California. So look at what's going on in your metro in terms of active listings and time on market," Krimmel said.
Nationally, houses spent a median of 51 days on the market in May, according to Realtor.com. Compared to the pre-pandemic May trend, only homes in the West are selling more slowly:
West: 5 days slower
South: 2 days faster
Midwest: 9 days faster
Northeast: 13 days faster
Read more: How to sell your home fast
"I think sellers need to be aware that leverage is shifting a little bit more toward buyers in general, and in some markets, much more toward buyers," Krimmel added. "And keep in mind, we're coming off a period where it was the seller's market of all seller's markets. We're gradually getting back, in that sense, to a more balanced market."
That's what YouTuber Joe Manausa said: The real estate market is more balanced now. Understanding inventory, the time it takes to sell, and your local market's trends will help you set realistic expectations and plan accordingly.Laura Grace Tarpley edited this article.
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