Top 10 states with biggest price reductions

What are sellers thinking?!

As you’ll see below, a new survey says that 81% of potential home sellers still think they will get their asking price or higher.

Clearly, these sellers are not avid readers of this newsletter!

All the latest data shows that price reductions are becoming more common in almost every single state. In some states, the share of listings with price drops has reached 20%, 25%, and even nearly 30%!

This is the kind of info agents must share with their sellers. It’s clear that a lot of homeowners have the wrong idea about what’s really going on in the market.

If you do need some help getting your sellers to set the right price, then scroll down to today’s Foundation Plans, where we have some quick tips on how best to get the conversation moving in the right direction!

- James and David

Listings are up, sales are down

Sales of existing homes fell to a seasonally adjusted annual rate of 4.2 million in April, the lowest level since October 2024. That’s down 0.2% from March and 1.1% from a year ago, marking the first annual decline in seven months, according to Redfin’s latest market update. Here are the key takeaways from the report:

• Pending sales dropped 3.5% month-over-month, the sharpest decline since August 2023. They are down 2.7% year-over-year.

• The median sale price rose 1.4% year-over-year to $438,466.

• Home prices rose YoY in 60% of the 50 largest U.S. metros and fell in the other 40%.

• Active listings climbed to their highest level since March 2020, up 1.2% from March and 16.7% from last year.

• New listings also hit a milestone, up 1.3% MoM and 8.6% YoY, the largest annual increase since May 2024.

• Just 30.2% of homes sold above asking, down from 33.5% last April and the lowest April share since 2020.

• The typical home sold at about 1% below list price, the biggest April discount since 2020.

Our take

The spring market is sending us mixed signals. On one hand, demand is weakening slightly, as seen in falling pending sales. But supply is increasing (...finally). In fact, inventory is at a four-year high. While prices are still edging up in many markets, more and more homes are selling below asking, which shows buyers have more room to negotiate. Agents should be prepared for all of this–longer days on market, more pricing discussions with sellers, an uptick in buyer interest as selection improves. The spring market isn’t booming, but it’s far from dead.

States with the highest share of price reductions

18% of listings nationwide saw price reductions last month, the highest share of price reductions in any April dating back to 2016, according to Realtor.com. Although the problem is deepest in the South and West, nearly every state has seen a year-over-year uptick in price reductions. Apparently, sellers haven’t gotten the news. 81% of potential home sellers still think they will get their asking price or higher.

Here are the top 10 states with the highest and lowest share of price reductions:

Our take

Overpriced homes are a recipe for regret. In today’s softening market, listings with unrealistic asking prices are sitting longer, even after multiple cuts. The result? A stale listing that signals trouble to buyers, raising doubts about the home’s condition or value. This trend is growing. Homes spent a median of 50 days on the market last month, up from 46 days a year ago. This marks the slowest pace since April 2020, right at the outset of the pandemic. Setting the right price from day one isn’t just smart, it’s essential if you want the house to sell. Scroll down to today’s Foundation Plans for tips on helping your clients price to sell, not to sit.

The most expensive listings in the country

Southern California – despite all the chatter about its decline – once again dominates the list of areas with the most expensive active listings, with five of the top 10. In second place, coastal Florida with four, and Lake Tahoe with one. These homes are all asking for $135 million or more, and two are priced above $200 million. 

Most of these ultra-luxury listings have been sitting for months, as homes at this level tend to take much longer to sell. While the typical U.S. listing goes under contract in 47 days, nine of these homes have been on the market longer, and six have been listed for over 100 days.

Here are the most expensive active listings in the country, according to Redfin.

1. 1960 S. Ocean Blvd, Manalapan, FL 33462: Listed for $285 million

2. 100 Bay Road, Naples, FL 34102: Listed for $210 million

3. 1949 Glenbrook Inn Rd., Glenbrook, NV 89413: Listed for $188 million

4. 607 Siena Way, Bel Air, CA 90077: Listed for $177 million 

5. 10644 Bellagio Rd., Los Angeles, CA 90077: Listed for $175 million 

6. 1261 Angelo Dr., Beverly Hills, CA 90210: Listed for $175 million 

7. 31062 Casa Grande Dr., San Juan Capistrano, CA 92675: Listed for $150 million

8. 1370 S. Ocean Blvd., Manalapan, FL 33462: Listed for $150 million 

9. 190 Palm Ave., Miami Beach, FL 33199: Listed for $150 million 

10. 594 S. Mapleton Dr., Los Angeles, CA 90024: Listed for $137.5 million

Our take

Ultra-luxury homes typically sell for much less than their initial asking price. These properties are often listed high to generate buzz and signal exclusivity. Plus, with so few true sale comparables at this price range, sellers expect drawn-out negotiations, and often build that into their pricing strategy.

Schematics

The news that just missed the cut

• How agents are dealing with the private listing drama 

• What the Fed just revealed about real estate commissions

• Mesirow Financial Inc. raised more than $1.2 billion for its fifth real estate fund

• California has permitted the most ADUs in the country

• Americans are awash in home equity. Here are the best ways to access it.

Foundation Plans

Advice from James and David to win the day

Mispricing a listing is one of the most common mistakes agents and clients make when putting up a home for sale. To help agents avoid this mistake, we did a three-part series last month on how to price a listing properly. But we’ve still got more good advice. These are our best tips for handling price reductions with your sellers, without losing their business in the process.

Start with a strategic price –  If you price a home well from the start, price reductions may be a non-issue. Remember: if you overprice a home, it’s going to sit on the market, rack up reductions, and end up netting a lower price than if you had priced it competitively from the start and sold in a matter of days.

Shop it off-market to test the price –  Before you list on the MLS, get some eyes on the listing through off-market showings and open houses. Get some brokers through the doors, start building interest, and get feedback on the list price before you go live so you know whether adjustments are needed. Make sure you do this in a way that is consistent with your MLS and NAR rules, which govern your area.

If your seller won’t budge on price, set clear expectations – Let them know if you list at that price point they need to be prepared to make adjustments along the way. Say, “If this property hasn’t sold by X date, we’re going to meet and talk about a new price.” That way they know to expect the price adjustment conversation and they’re ready to compromise.

These kinds of conversations with clients can be awkward and difficult. If you’ve had them, tell us about your experience. We love hearing your stories. In the meantime, start here to gain some guidance on how to handle such conversations.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“Just because you are doing a lot more doesn't mean you are getting a lot done. Don't confuse movement with progress!” – Denzel Washington

Progress isn’t about doing more, it’s about doing what matters most. Be intentional and focused in what you choose to do, friends. That’s how you build the business and life you want.

- James and David