There is serious housing drama right now. Buyers are lowballing, rates are rising, many sellers need a wake-up call, and the market needs to figure out its Halloween costume. In today’s post, I have some deep thoughts about sellers needing to think more about failure and the market doing better at lower prices. Oh, and lots of memes. On a serious note, I hope something here can be helpful for sellers and buyers as they figure things out.
Skim by topic or digest slowly.
UPCOMING SPEAKING GIGS:
9/24/26 Appraiser webinar TBA
10/2/26 PCAR Rocklin
10/21/26 Coldwell Banker Sierra Oaks / EDH
11/17/26 Orangevale MLS Meeting
11/19/26 Appraiser webinar TBA
1/15/27 PCAR
1/26/27 Residential Roundup
LOWBALL OFFERS COMING IN HOT
I keep hearing about buyers lowballing sellers, and look, buyers should offer whatever they want. Yet, the vast bulk of sellers aren’t desperate, so offering 30% below value feels very unrealistic to get results (especially if it’s a property that checks all the boxes that will likely have multiple offers). All that said, quite a few people have echoed that buyers need to try to make the transaction good for the seller, and while I agree the transaction needs to feel like a win for both parties, I really think sellers need to do the heavy lifting here of bending toward buyers. Roll out the red carpet and set the tone for a great buyer experience. Buyers have more power right now, so sellers need to move to meet them. Not the other way around. As far as what to offer exactly, I say work out a strategy with your agent and get as much as the market will give you.
BUYERS ARE WAITING TO SEE WHAT HAPPENS
Some buyers have hit the pause button because they’re waiting to see what the market does. Or they’re still looking, but they’re going to be extra sensitive about price, condition, and location. Others are moving forward no matter what, and we see this with pending contracts still happening (see below). Keep in mind, it’s going to take a couple of months to see lower buyer demand in the sales stats.
THE HOUSING MARKET’S HALLOWEEN COSTUME
I look forward to not sharing this meme eventually, but it’s the reality today. We have missing buyer demand, and with rates ticking up a bit more this week, this meme will feel even more real. This is not to be negative, but realistic. It doesn’t help anyone if we hide from the truth of housing stats.
SELLERS NEED TO THINK MORE ABOUT FAILURE
This might seem strange to say, but failure is exactly what sellers need to focus on right now. The truth is many listings aren’t going to make it to the finish line because sellers aren’t willing to lower the price, so sellers need to look at what’s not working in the market right now and ask one question. How do you avoid becoming a cancellation or expired listing?
SOME LISTINGS AREN’T MAKING IT TO THE FINISH LINE
I want sellers to look at this chart and ask one question. What is it going to take to not become a statistic on this chart? Here’s a look at all canceled and expired listings in the region on a monthly basis over the past five years. There is a definitive seasonal rhythm here, but we can also expect higher numbers when the market softens. It’s definitely no longer 2021 either.
I SPENT HOURS EXPERIMENTING
I want to make these stats as a percentage of the total market eventually, but I’m not comfortable with my results. I spent hours experimenting this week, and it’s just not there yet. I thought I had it figured out yesterday, but it’s back to the drawing board. So, for now, here are the raw numbers.
BLAMING EVERYTHING BESIDES THE PRICE
It’s easy to blame so many things, but price is usually the big culprit for why a property is struggling to sell. I’m not saying photos, staging, marketing, or agents don’t matter. There are bad examples of all of the above. But the best agent in the world is going to have a heck of a time selling something priced at an unreasonable level. This is why properties that get extremely viral attention don’t always sell.
Price > Viral attention.
Thanks, Geoff Black, for inspiring the idea for this meme and helping me fine-tune the wording.
LOWER-PRICED LISTINGS ARE DOING BETTER
Lower-priced listings don’t cancel and expire as much as higher prices. When looking at the bottom half of the market under $600K, there is a much stronger portion of sales compared to listings that didn’t make it. However, it’s possible to overprice at any range, so sellers at the lower end still need to price it right.
TOO MANY PEOPLE ARE OVERPRICING AT THE TOP
Some sellers at the highest prices are waiting for a mythical unicorn buyer to swoop in and overpay. Also, some sellers at the top might not really even need to sell, so there just isn’t any desperation to nail the list price. I think this is why we tend to see more cancellations and expired listings at the highest prices compared to the number of sales happening. All that said, it’s important to remember there are only so many buyers available to pay the highest prices, so at some point aiming for the moon or a Bay Area unicorn just doesn’t make sense (especially if the comps don’t support it).
ARE YOU TEAM LINE GRAPH OR TEAM BAR CHART?
Which do you like better? The line graph or the bar chart? I personally like the line chart for the bigger picture of every range, but I really prefer the bar chart when zooming in to various price ranges.
THERE ARE STILL PENDING CONTRACTS HAPPENING
What’s getting into contract since mortgage rates went above 7%? Here’s a look at the stats through a couple of days ago. The spread looks pretty normal here, but what I think we’ll see is a lower number of pendings overall. Keep in mind, some of these buyers locked in a lower rate already, so they may not all be shopping at 7% and above. Of course, some of these are cash buyers too.
NEW STUFF & OLD STUFF IS BEING ABSORBED
Buyers today are waiting for the good stuff, and we see this in the stats with 33% of all pendings over the past two weeks being homes that just hit the market (14 days or less). On the other hand, 18% of pendings were on the market for over 90 days, so lingering homes can get into contract too if the price is lowered.
CLOSING THOUGHTS FOR SELLERS:
1) LOWER THE PRICE:
I think the advice is pretty simple right now. If the market is speaking to you, then lower the price. Over the past couple of weeks, the average price reduction before getting into contract in the Sacramento region was 6.3% (or $44,624).
2) IF NOT LISTED YET, THEN PRICE IT RIGHT:
Keep in mind, 53% of recent pendings didn’t need a reduction before getting into contract, and this shows the power of pricing it right. This is a good reminder that not every listing is going to need a price reduction – even in today’s market.
3) GIVE MORE FOCUS TO PENDINGS
What’s getting into contract right now? That’s where we see the market. Sales are like historic artifacts that tell us what the market used to be like when those properties got into contract? What’s the market like right now? This is where appraisers, agents, and the public need to give more weight to what’s happening with active listings and pending contracts. Be careful about imposing ideas on the market too since not every neighborhood is going to have the same trend.
4) IT’S NOT EASY
I realize while many people trash sellers for overpricing, there are some difficult situations playing out. Some sellers are hoping to net a certain amount so they can move on in life, and other times they’re just trying to avoid doing a short sale. The harsh truth is the market doesn’t care about these things, but it’s still important to recognize real situations behind the numbers. The truth is sometimes sellers are out of touch with the market, but other times there is more going on, which makes it challenging to budge on price. I get that part. Hang in there.
Thanks for being here. I appreciate it.
Question: Have you been seeing buyers lowballing? What are you hearing from buyers and sellers right now?
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