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A significant majority of home sellers are now adopting a middle-range pricing strategy, a marked shift from previous trends favoring aggressive, high initial listing prices. According to a January 2016 industry survey of 605 sellers, 57% plan to price their homes in a middle range, a 7-point increase from just a few months prior. This change is driven by buyers growing more selective and a broader concern over economic conditions and low housing inventory. This article details the current seller sentiment, the data behind the pricing shift, and the strategic advice for navigating the 2016 market.
The primary catalyst for this strategic pivot is a change in buyer behavior. Buyers are demonstrating less willingness to overpay for properties, forcing sellers to recalibrate their approach. Pricing a home too high can lead to it becoming a stale listing—a property that sits on the market for an extended period, which often discourages potential buyers who may assume there is something wrong with it. Conversely, pricing too low risks leaving money on the table and failing to attract serious, qualified buyers. The goal of a middle-range price is to encourage multiple offers, creating competitive bidding situations that can actually drive the final sale price higher than an initially inflated asking price might.
General economic uncertainty remains a top concern for one-third of sellers. Almost as many are worried about the practical challenge of finding another house to buy after selling their current one. This concern highlights a critical market dynamic: a chronically low inventory of properties for sale. Even with rising home prices, the number of listings in January 2016 was down 3% compared to the previous year. This creates a housing logjam where potential sellers are hesitant to list because they fear there will be nothing for them to purchase, thereby perpetuating the low supply issue. Sellers are caught between wanting to capitalize on high prices and worrying that the proceeds from their sale won't be sufficient to afford their next home in a competitive, supply-constrained market.
Seller optimism about property values remains steady. The survey data indicates that 67% of sellers believe home prices will increase a little in 2016, while 7% anticipate prices increasing a lot. This sentiment has changed only slightly since the fall, showing a general consensus that the market will continue to appreciate, albeit at a moderate pace. This optimism is balanced by a pragmatic view of the selling environment. When asked about the best time to sell, 48% of respondents said that "now" is an OK time to sell in their neighborhood, and the percentage of those who believe it is a bad time to sell decreased from 13% to 10%.
Based on the prevailing market conditions, a measured approach to pricing is the most recommended strategy. The key is to avoid the extremes. Start with a competitive, data-driven price that aligns with recent sales of comparable homes in your area. This strategy is designed to generate maximum interest quickly. Rely on a comparative market analysis (CMA) prepared by your real estate agent to establish this baseline. Furthermore, understand the local inventory dynamics—if homes are selling quickly in your neighborhood, it may support a price at the higher end of the middle range. The core advice is to price strategically to attract competition, not to deter buyers with an unrealistic figure that requires significant future negotiation.
The most effective strategy in the current climate is to price your home competitively from the start to attract serious buyers and avoid the pitfalls of a stale listing.
Survey Methodology: The findings are based on a survey conducted from January 17-27, 2016, which gathered responses from 605 home sellers across 25 states.
