This week, millions of Americans will gather around the Thanksgiving table and then rush off to department stores in search of the best holiday deals.
But in the housing market, the best deals of all may not occur on Friday. According to a recent press release by Zillow, most home prices are actually cut on a Thursday.
So if you have sellers on the fence about adjusting their asking price, keep the following in mind:
Timing is everything
While 18.5% of homes are price cut on a Thursday, that doesn’t mean the other days of the week never see any action. Other popular days are Monday and Wednesday. Most listings won’t see a price reduction on the weekends, as agents and sellers are busy with open houses and private showings.
It isn’t just the day of the week that matters when talking about price reductions. Total time on the market matters too! According to Zillow, most homes don’t see a price reduction until they’ve been on the market for 30 days, but in the height of our previously hot market that number dipped down to just three weeks in parts of 2021 and 2022.
This news is great for your buyers. Encourage them to take their time thinking through this purchase. “Buyers today have a better opportunity to land the right home than they have had in several years,” said Orphe Divounguy, senior economist at Zillow.
Make sure to calm worried sellers if their home isn’t selling within weeks as they expected. The winter season is typically a slower time for home sales. This means you could price low initially to avoid price cuts or communicate to your sellers that they may need to be prepared for such cuts down the road.
“The price they set just weeks ago may no longer be attainable in light of rising mortgage rates and falling demand,” said Divounguy.
Listing price cuts
Whether you’re dealing with buyers or sellers, know that the discounts they’ll see on homes won’t be as crazy as Black Friday doorbusters. A typical home price cut is anywhere from 2.5% to 4%, depending on the metro area. In dollars, this results in an $11k price drop most often.
According to Zillow, cities like Pheonix are seeing the smallest price cuts; meanwhile, agents in Buffalo, New York are being liberal with their home price reductions, some are reaching 4.6%.
If your sellers are concerned about lowering their list price, remember that nearly 30% of the current active listings have cut their prices.
When it comes to having the price cut conversation with sellers, be prepared for pushback. Everyone wants top dollar for their home, but in a market with ever-increasing mortgage interest rates, finding a buyer who can afford the rate and the expensive home can feel like finding a needle in a haystack. Don’t be discouraged though, we’ve got plenty of tips on how to make your listings stand out (and what to avoid)!