There will always be an occasional low sale here and there.
What would cause home prices to really slide?
There would need to be a series of low sales in the same area to create downward momentum. The next seller would have to be convinced that lower prices are a fact, and without an obvious trend, they will be reluctant to believe it.
Here’s an example. Even though this lowball listing (in red) undermined the two comps over $2 million, the next seller wasn’t convinced, and they listed their home for $1,975,000. They have lowered it since, but you can bet they are digging in now – and the market is in their hands:
If they hold out and get close to their price, then the lowball sale will be dismissed as one-off, and other sellers in the future will ignore it….and hope the buyers do too.
These are the standoffs happening everywhere now. ALL sellers have plenty of equity and could go down in price if they really wanted – or needed – to make the sale.
But will they?
Generally speaking, the agents might go along for 30 days or so, but they aren’t used to sitting on unsold listings for months. They are going to nudge the sellers to lower their price, but those drops need to be in 5% increments to cause a meaningful reaction from the buyers.
Will some sellers surrender? Yes, but only when confronted with a lower offer. Currently we are in the Buyer-Vacation stage where few are in the game and making offers, and without solid proof, the sellers are more likely to wait, than dump.
The 2023 Selling Season will be the most anticipated market in the history of the world!
New update – another price reduction. Buyers are on vacation now, we’ll see about 2023: