Price Reductions: How to Help Your Sellers Decide [2021]

Do you have a seller who's considering a price reduction? Give them data-driven advice using Altos Reports.

When it comes to deciding whether a price reduction is necessary, the number to watch here is % price decreased. Is it trending above normal?

In a normal market, we tend to see about 30-35% of sellers reduce the price of their homes to attract buyers. In some markets with more inventory, it can be common to see price reductions at 40%. Below 30% signals solid demand at prevailing prices, while 40% or more generally indicates reduced demand. In the coolest markets, when buyer demand is weakest, you’ll see % Price Decreased climb over 50%.

Price decreases also tend to have some seasonality; for example, price decreases happen more in the fall when it’s time to move the listings before the holidays.

Here are a few observations you could make, depending on what the data for your area shows:

• “Price reductions are actually lower than usual, so we can probably ride it out at the current price for a bit.”
• “We’re seeing almost half of properties take a price reduction right now - we should definitely consider dropping the price.”
• “We’re seeing many more price reductions than usual, but the prices are only dropping by a small amount, so let’s consider a small price reduction.”

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