3 Strategies To Handle Price Reductions Effectively

By Jason Baker

Jason is a full time agent who enjoys training his agents on how to think big and live an incredible life, while providing the best experience for their clients.

What’s the reason why inventory continues to increase every day? I’ve been watching the housing market lately and noticed that around August, an avalanche of inventory hit the market, from 250 homes to 427 homes. I also noticed between 50 and 100 price reductions happen every day.

It’s almost like we’re transitioning into a new phase. We’re in a normalizing market—somewhere between a seller’s market and a buyer’s market. Everyone loves to chat about absorption rates, but it feels like we’re edging closer to a buyer’s market.

So, what caused this sudden inventory increase?

Even with interest rates dropping a bit, many are still hesitant. It’s unusual to see so many homes available this late in the year; it feels more like a late-summer surprise than the usual spring rush. Sellers are dropping prices to attract buyers, and that’s what I want to focus on today—my price reduction strategy in this shifting market.

1. Setting realistic expectations. I make it a point to set realistic expectations during the listing appointment. I’m not inflating prices just to get a listing. If a seller wants to list above my assessment, I’m willing to walk away. I prefer to work with motivated sellers rather than those just testing the waters.

It’s tough for any real estate agent to go home at the end of the day without making progress. But it’s crucial to prioritize quality over quantity. We need to focus on listings that are actually salable.

2. Understanding the market dynamics. Days on the market are increasing, and this trend makes sense, given the rising inventory. We need to educate sellers about how the market has shifted. The comps we’re looking at were based on a different situation—when there were only 250 homes for sale. A price that made sense back then might not hold up today.

As the market appears to be declining, it’s essential to be cautious about pricing. We might hear predictions of 3% to 6% appreciation, but I don’t see that happening. Many homes are selling for less than they did a year ago.

3. Communicating with sellers. It’s also critical to explain to sellers what they should expect for showings in their price range. If they’re not seeing 3 to 5 showings a week, especially for homes under $800,000, their price is likely too high. No buyer will see your home as a great deal after it has been on the market for six months.

Once you take a listing, it’s important to maintain open communication. I send weekly market updates to my sellers, highlighting what’s sold and how their home compares. This way, they can see what’s happening in the market and adjust their expectations if necessary.

On a personal note, I want to take a moment to share something important. My wife, Sara, is battling stage four breast cancer. It’s been a challenging time for our family, and I appreciate the support we’ve received from the real estate community. If you’re someone who prays, I would be so grateful for your thoughts and prayers for her. You can send good vibes and encouraging words to her at sara@jasonbakerteam.com or call her at (406) 552-7954.

In these challenging times, it’s crucial to adapt and push forward. I encourage everyone to wake up each day and do their best. Lean on your community; it can make all the difference.

I’m still here, grinding away, ready to help anyone who needs it. So, whether you’re looking to buy, sell, or just stay informed, remember: the market is changing, and so must our strategies. You can reach out to me at (406) 552-4443 or jason@jasonbakerteam.com.