In a steadily evolving real estate market, home sellers are witnessing significant shifts as they prepare to list their properties. For the week ending March 1, new listings saw a marginal increase of 0.1% compared to the preceding week, marking the eighth consecutive week of growth in new listings. This trend comes amid rising price reductions, with February seeing 16.8% of listings experiencing price cuts—up by 2.2 percentage points from the previous year. Notably, this represents the highest February activity in price reductions since 2021.
Understanding these dynamics is crucial for prospective sellers. Determining an appropriate listing price remains a fundamental step in ensuring a successful sale. Joel Berner, a senior economist at Realtor.com, emphasized the importance of pricing strategy.
"Getting the price right to start is really important," – Joel Berner, a senior economist at Realtor.com.
To accurately set a listing price, home sellers should conduct thorough research into recent sales of comparable homes. Properties of similar size, amenities, and condition offer vital benchmarks for establishing a reasonable asking price. Moreover, hiring an experienced local agent is essential for navigating neighborhood-specific trends and insights.
"Hire an experienced local agent who's going to know your neighborhood like the back of their hand," – Amanda Pendleton, Zillow's home trend expert.
The current market environment presents both challenges and opportunities for sellers. A January report from the National Association of Realtors revealed a decline in homes sold above asking price, with only 15% achieving this compared to 16% in the previous month and year. This highlights the necessity of strategic pricing to avoid underselling a property. Sellers must also consider their equity needs from the sale to cover future costs such as down payments, closing fees, and moving expenses.
As sellers navigate these considerations, they should be cautious of relying solely on Automated Valuation Models (AVMs). While AVMs utilize public records to estimate property values, they may not account for recent renovations or changes. For a more comprehensive evaluation, consulting a professional home appraiser or real estate agent is advisable.
The real estate market's tempo has shifted slightly, with homes that are well-priced and effectively marketed often selling within weeks. Currently, the average time a listing spends on the market has increased to 66 days—five more days than last February and marking the longest duration since February 2020. Despite this shift, for-sale inventory in February surged by 27.5% compared to a year prior, providing buyers with more options and increasing competition among sellers.