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By WAYNE PORTER
NET Association of Realtors

There’s a long list of things to consider before putting property on the market this year. But one stands head and shoulders above the rest: It’s the role strategic pricing plays during the first days after a listing goes public.

During the last half of last year, local sales declined to their 2018 pre-pandemic level under the weight of high mortgage rates and anemic inventory levels. The mortgage rate situation is improving. Rates are expected to settle in the 6% to 6.5% range. Inventory is also picking up. In some price ranges, the improvement has nudged conditions to balanced market status. The overall inventory is the best since 2020, but still lacking. It would take about 2,000 new listings to move the overall market to balanced conditions. Given current conditions, that’s not expected for several years.

Inventory and mortgage rates are expected to improve as we move into the early part of the prime home-buying and selling season. How much and how fast are two keys to the supply-and-demand dynamic that will fuel the prime home-buying and selling season. There’s a likelihood for a surge of locals returning to the market if supply improves in the affordable price ranges.

According to research from the National Association of Realtors®, there are about 10,000 locals on the sidelines waiting for the right conditions. And although the flow of new residents has slowed, it’s still significant, and most of those folks are potential homebuyers.

With that in mind, here’s the dynamic to keep in mind:

Last year, sellers increased their asking prices almost every month, and the number of price reductions rose to a little better than half of all sales that moved to the closing table. Buyers – and their agents – watched new listings, and those that had a price reduction, like hawks. Don’t expect anything less this year.

So, where is that pricing sweet spot that triggers a fast-track deal?

There are variables, but typically it’s somewhere between the average listing price and the average sales price of comparable properties that have already sold. “Somewhere” is the key question and the basis for a quick sale. Those priced too high, with the intent of testing the waters, all too often languish on the market until there’s a price reduction.

This year should continue as a sellers’ market, but with buyers who are not as willing – or can’t afford – to get involved in bidding wars, the marketing tactics will change.

The region had four years of double-digit annual price increases before dropping to a little above 4% last year. The price outlook for this year is in that 4% to 6% range, and the sales outlook is for a 9% increase. That makes strategic pricing an important consideration.

A professional Realtor can lay out all the data from sales of homes with a competitive market analysis. Armed with the latest numbers and a commitment to strategic pricing, it’s a matter of implementing a marketing plan that matches your property.