How to Price Your House in a Buyer’s Market
The house down the street sold in a weekend. That was six months ago. Today, three similar homes are sitting on the market, and one has already cut its price. Which of those houses should you pay attention to when you price yours? All four. They’re just telling you different things.
When inventory rises above seven months in your part of the market, buyers generally have more choices and more room to negotiate. I’d price your home against what buyers can tour this weekend, use recent sales to support the number, and agree on when we’ll review the response before the listing goes live. That last step is much easier to discuss over coffee than after two quiet weekends.
What does seven months of inventory mean for sellers?
Months of inventory estimates how long it would take to sell the homes currently on the market at the current pace of sales. If there are 36 homes for sale and five are selling per month, that’s 7.2 months of supply. Your own home could sell sooner or take longer. The figure tells you how much competition sellers face as a group.
The words as a group matter. A Bethesda house, a Chevy Chase townhome, and a Northwest DC co-op can face very different competition. Even two detached houses in the same ZIP code can draw different buyers if they’re in different price ranges. Before I use an inventory figure to advise a seller, I want to know which homes it counts, how quickly they’re going under contract, and how many have had to adjust their price.
Price against the homes buyers can see today
Recent closed sales show what buyers agreed to pay. In a shifting market, I also look at when those homes went under contract. A sale that closed last week may reflect a price negotiated well before the current competition came on the market.
Then I look at the active listings as a buyer would. If your house and two similar homes are on the same Saturday showing schedule, what will buyers notice? Maybe yours has a better layout and a lovely screened porch. Maybe the one around the corner has a newer roof and costs $30,000 less. The price has to make sense in that comparison, even if a similar house sold for more last spring.
Pending listings offer another clue. We may have to wait until closing to learn the final price, but we can see which homes attracted an offer and how long it took. I also look at listings that sat, cut their price, or came off the market. Together, those homes tell a much fuller story than any one comparable sale. I frequently call the listing agents of those homes to ask what insights they can share with me – and then I share that with you.
Remember that all real estate is local. Some properties are in markets with a 3 month supply while others may be looking at an average of 7 to 8 months on the market. Whether your home is a single family, townhome or condo will make a difference. Always be sure to compare apples to apples. The townhouse in a different zip code and a different price point will not give much guidance on the list price you should set on your condo!
Think about the buyer’s search and the seller’s bottom line
Suppose the comparable sales suggest a range of $975,000 to $1,025,000. You’re considering listing at $1,015,000. Before we settle on that number, I’d look closely at the competition just under $1 million. A buyer who sets a $1 million maximum may never see your listing at $1,015,000. If the market evidence supports $999,000 and that price puts your home in front of a meaningful group of buyers, it deserves a serious look.
I’d also think through the negotiations you can afford. An offer of $990,000 with a $15,000 seller credit leaves $975,000 before other costs. An offer of $982,000 with no credit leaves $7,000 more on that same comparison. From there, I’d weigh financing, contingencies, and the closing date. The price in large type is only the beginning of the conversation.
Decide when to revisit the price before you list
I like to agree on an early check-in, often after the first full weekend, and a second review based on how quickly comparable homes are moving. We’ll look at showings, buyer feedback, and whether competing listings went under contract or reduced their prices. A quiet holiday weekend or a problem booking appointments can muddy the picture, so context matters.
If buyers are finding the listing online but rarely booking a tour, I’ll look at the price, lead photo, and showing access together. If they tour and leave without making offers, I want to know what they chose instead and what they’re saying about your home. When the evidence points to price, I’d rather make one meaningful adjustment that changes how the home compares than make a series of small cuts that leave it competing against the same listings.
A buyer’s market still gives a well-prepared seller room to make choices. If you’re selling in Bethesda, Chevy Chase, or the Washington, DC area, email me at lise@lisehowe.com. We can look at the homes your buyers are likely to tour, work through a defensible price range, and decide how we’ll respond if the market shifts again.
About the author
Lise Howe is an associate broker with RLAH RE LLC. She has more than 38 years of real estate experience and helps buyers and sellers in Bethesda, Chevy Chase, and across the Washington, DC area.