How to Properly Price Properties in Today’s HOT “Low Inventory” Real Estate Market

Pricing a property for sale has always been the most important part of listing a home for sale, but in today’s real estate market, it’s an art form and it needs to be treated that way. As many of us know, the real estate market is in a unique situation where inventory is low, but buyer confidence remains high and most buyers are out looking for a deal. This creates a dynamic environment that can be tricky to navigate—especially when it comes to setting the right price for when you have a house for sale

Low Inventory, High Buyer Demand:

The biggest thing you have going for you as a seller in today’s real estate market is the undeniable fact that the inventory is low. The market is and has been facing a scarcity of homes available for sale. With fewer homes on the market, buyers are limited in their options, which gives the sellers the upper hand. However, that’s not necessarily how buyers are seeing things right now. 

Many buyers believe they hold all the cards, expecting more negotiating power simply because they know that not many properties are available. They may come into the market expecting to find bargains, thinking sellers are desperate for offers. However, the reality is that in many cases, well-priced homes are still selling quickly—and often over the asking price.

The Goal: Get Into Multiple Offers:

In a market like this, the goal is clear: bring inventory to the market at an attractive price, or slightly below, to spark interest and competition. As the seller you must get a lot of people into the door fast. The only way to do this is to not price your properties too high. Remember, we have a shortage of homes available to buy on the market right now. When you bring inventory to this market, you should have showing after showing after showing on your house if you price the home at a realistic figure or slightly below. The objective is to generate multiple offers on a property. When buyers compete for a home, the price can escalate, and you may end up selling for more than the original asking price.

Here’s where the strategy gets interesting. Even though inventory is low and buyers have fewer options, they’re cautious about overpaying—at least at first. It’s common to see buyers submitting offers below the asking price, only to increase their bids once they realize they are in a competitive situation.

Pricing Strategy: Attractive, But Not Unrealistic:

The key to success in this market is to price your property attractively. Aim for a price that catches attention, but isn’t so low that you’re leaving money on the table. A slightly below-market price will likely draw a lot of attention from buyers, bringing you in a ton of showings which is going to lead to multiple offers.

When you price right, buyers start competing, and that’s when the magic happens. Even though buyers may not go above asking price on their first offer, they will often step up in a bidding war when they know they have competition. This is when you’ll see buyers paying over the asking price—because they don’t want to lose the home to someone else.

Why? BECAUSE THEY DON’T HAVE MANY OPTIONS TO CHOOSE FROM IN THIS LOW INVENTORY MARKET!

The Psychology of Buyers Today:

Understanding buyer psychology is crucial in this market. Buyers are savvy. They’ve been watching prices rise, they’re cautious, and they want to feel like they’re getting a deal. They will likely offer a lower number at first, but as soon as they realize there’s competition, that’s when they’re willing to stretch. This is why it’s so important to price your property strategically from the start.

By positioning your home at a price that attracts multiple buyers, you create a sense of urgency and excitement. Buyers begin to see the property as more valuable simply because others want it too. It’s this kind of competitive environment that can lead to offers over the asking price, even if those offers don’t come in right away.

In Conclusion:

In today’s low-inventory market, pricing is everything. To get the best result, price your home to attract buyers immediately. While they may come in low on their first offer, the key is generating enough interest to get multiple offers. This is when you’ll see buyers pushing their limits and going over asking price to secure the home they want. 

As a seller, your goal should be to price your home smartly, create competition, and ultimately let the market work in your favor. When done right, this strategy leads to a successful sale—often for more than you initially expected.

Get your properties ON the market quick and get them OFF the market quick! If you have to do a price reduction, it’s not a great thing in today’s world! If you have to do an open house, it’s even worse. Just price it right from the start and get buyers fighting over it.

If inventory was normal right now or when it does turn back to normal amounts of homes for sale on the market… sellers are going to be screwed!