Realtors Say Overpricing is Market’s Greatest Challenge in 2020

According to a recent report, proper pricing will be the key to home sales in 2020.  HomeLight recently surveyed 500 Realtors for their thoughts on the 2020 market. Nearly half of them said that the biggest challenge for sellers will be their tendency to overprice.

“Many people think their homes are worth more than they really are, and to them, they probably are,” Wayne Owens of Dave Perry-Miller said. “The thing about it is, it doesn’t matter what you think about your property or what I think about your property.  It’s what buyers think about your property.”

In order give sellers confidence that they are setting a reasonable price, he and his colleagues carefully evaluate their homes to determine what the market will bear. He then presents this information to the seller with comps from similar homes in order to give them a true sense of where they stand.

“Buyers recognize value today,” he said. “If we price the house correctly, it will sell and it will probably sell quickly,”

Key economic indicators including low mortgage rates (3.68 percent for a 30-year fixed as of Dec. 2019) and historically low 3.6 percent unemployment would suggest an advantage for sellers. However, a majority of agents surveyed believed that the seller’s market peaked during the second quarter of 2019.  Nearly 61 percent of them report that bidding wars for homes in their markets have declined.  Going into the new year, agents were split on whether inventory levels plateau or decline. However, more than 90 percent of them believe that home prices will either stay level or continue to rise.

According to Gia Marshello of Allie Beth Allman & Associates, sellers have started to realize that it’s no longer their market.  Buyers now have more control. But while many sellers may have become tempered their pricing expectations, buyers should not expect lowball bids to be successful.

“It’s more of a transition and a meeting of the minds between the two,” she said. “It’s not, ‘Take it or leave it.’ It’s more ‘What can we do to make this work?’”