Price cuts are turning up everywhere right now, and they read very differently depending on which side of the deal you’re on. Sellers tend to worry a cut means walking away with less than they hoped. Sometimes that’s true, but more often it just means the market moved faster than the listing did. Buyers, for their part, often assume a cut means something’s wrong with the house. Most of the time, that’s not the case. This is what’s actually driving all those price cuts, and why it matters regardless of which side of the deal you’re on.

Forty-two percent of homes for sale are now carrying a price cut. The share of sellers cutting their asking price has climbed every month for seven straight months. Today, more than four in 10 active listings have had at least one price cut, and the typical seller is cutting about $17,560 off their original number. 

It’s happening because with rates still elevated and with more homes to choose from, buyers can afford to wait for the right home in their budget. So, sellers who price at the higher end of market value end up adjusting down quite quickly.

What does that mean for you? If you’re selling, this isn’t a red flag. But it is a sign that pricing it right from day one is your best bet. Just know that the market’s been shifting fast enough this year that sometimes even a well-priced house can fall behind within a matter of weeks. If that happens to you, dropping your price to catch up to where pricing actually stands today tends to bring in more buyers and helps you sell closer to true market value.

If you’re buying, it’s easy to assume a price cut means something’s wrong with the house. But with cuts happening on more than four in 10 homes right now, the reality is, sellers are just catching up to where the market already is. And with affordability still tight, that’s exactly the kind of opening you need to get a better deal.

But why are sellers adjusting faster than before? Data shows that list prices are trending down nationally. That’s often a sign that sellers are pricing more realistically from the start instead of listing high and getting stuck cutting later. List prices have fallen about $26,000 from last year’s peak. Some of that decline is seasonal since list prices typically soften each winter before rebounding in the spring. So, expect asking prices to keep drifting a little lower before turning back around.

That is good news for buyers, who are seeing lower asking prices and more room to negotiate. With rates still elevated, buyers can only stretch so far. Sellers who meet them where they are instead of holding out for unrealistic prices are the ones getting to closing and doing that up front is always better than chasing the market later.

Buyers, you’ve got room to negotiate again. At the same time, data shows sellers now outnumber buyers by about 58 percent, the widest gap on record. That changes the power of who controls the market – and impacts how homeowners should price their house. Nationally, about seven in 10 markets now favor buyers or are trending that way. For sellers, that means standing out matters as much as pricing. With more homes to choose from, buyers are comparing you directly against the competition. So, a little flexibility, like covering closing costs or being open on timing, can be what gets your house picked over another.

For buyers, it means more room to ask for a lower price, help with closing costs, repairs after inspection, or some combination of all three. That’s especially true for homes that have already sat for weeks, where sellers are often the most willing to talk.

Price cuts are a normal part of today’s housing market, and both buyers and sellers can use them to their advantage. Connect with a member of The Marzeotti Group or a trusted real estate professional to look at what’s actually happening with prices in your neighborhood, so you know exactly where you stand before you list or make an offer.