I want to focus on some key points here because this blog post is really for both buyers and sellers.
For sellers, a price drop is not a strategy. Listing high just to “see what happens” usually does not work. It can cost you time, energy, momentum, and ultimately money. The longer a home sits, the more buyers start asking, “What’s wrong with it?” even if nothing is actually wrong.
For buyers, a price drop is not always a discount. Sometimes it just means the home was overpriced from the beginning and the seller is finally adjusting to where the market already was.
There are really two types of sellers in the market: sellers who are serious about selling, and sellers who are just prospecting. Serious sellers price their home based on the market. Prospecting sellers price high and hope someone will overpay.
The good news is, you can usually tell pretty quickly which one you are dealing with by looking at the price, the days on market, and whether the seller is willing to adjust when the market speaks.
A price cut does not always mean buyers are getting a deal. Sometimes it just means the seller finally came back to reality.
1. Price cuts are becoming more common in the Tri-Cities
In June, 41% of sold listings in the Tri-Cities had a price reduction before an offer was accepted. That was up from 35.6% in May and 35.2% one year ago, meaning more sellers are starting too high and having to adjust.
Don Fenley - “More price cuts do not automatically mean home values are crashing. It means sellers are being corrected by the market.”
2. A price cut is not the same thing as a discount
Fenley’s core point is that a price reduction is only a markdown from the seller’s original asking price. It is not necessarily a markdown from what the home is actually worth. If a home was overpriced and then reduced to fair market value, the buyer did not get a steal. They paid what the home should have been priced at in the first place.
Don Fenley “Just because a house was listed at $400,000 and reduced to $375,000 does not mean you saved $25,000. It may mean the home was never worth $400,000.”
3. The real discount is measured from the final asking price
The article explains that the better number to watch is the concession, which is the difference between the final list price and the actual sale price. In June, 60.4% of Tri-Cities homes sold below final asking price, with the average concession at $15,360, or 4.9% of the final list price.
Don Fenley - “Negotiation still exists, but the room is not as wide as buyers may think.”
4. Homes are still selling close to final asking price
The typical Tri-Cities home sold for 98.7% of its final asking price in June. That means once a home is priced correctly, buyers are not usually getting massive discounts.
Don Fenley - “When the price is right, the market responds. Buyers waiting for a huge discount on a well-priced home may miss out.”
5. The list-price-to-sale-price gap can be misleading
Fenley points out that the median list price in June was $339,000, while the median sale price was $309,000. That looks like a $30,000 gap, but those numbers are not tracking the same homes. Active listings include homes that may be overpriced and sitting, while closed sales reflect homes that actually moved.
Don Fenley - “You cannot simply compare the median active list price to the median sold price and assume every buyer is getting a $30,000 discount.”
6. Buyers should still negotiate, but they need realistic expectations
There is still room to negotiate because six in ten homes sold below final asking price. But the average discount was under 5%, and nearly one in five June sales closed above asking price.
Don Fenley - "Buyers should absolutely ask for what they need, but expecting every seller to slash the price can cause you to lose the right house.”
7. Sellers need to understand the market is correcting overpricing
The article’s seller takeaway is just as important: overpricing is becoming more common, but the market is not letting it survive. Sellers can test the market, but buyers are pushing back quickly when the price is too high.
Don Fenley - “If you price too high, the market may force you into a correction. Pricing correctly from the beginning can help you avoid sitting, reducing, and losing leverage.”
Credit to Don Fenley for this article: https://donfenley.
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