By Serj Markaria, Licensed Real Estate Salesperson and Manhattan Market Expert

Overpricing a home can be tempting, as many sellers worry that pricing too close to market value leaves money on the table. John Walkup, co-founder and partner at UrbanDigs Analytics, explains, “This tendency is rooted in human psychology. Sellers believe that by not asking more than the home is worth, they miss out on potential gains.” In his analysis, Walkup categorizes pricing outcomes by days on market, classifying homes as either priced right, middle ground, or overpriced. It’s worth noting that these timelines can also be influenced by the property condition and shifts in the market.

According to Walkup’s findings from thousands of Manhattan sales, homes priced accurately from the start spent an average of 31 days on the market and sold for 98.1% of the asking price. Overpriced listings, however, faced much longer wait times and saw discounts of up to 8.4% after languishing on the market for months.

Most buyers have a solid sense of what they can get for their budget. If a home priced at $1.5 million is actually worth closer to $1.25 million, buyers will notice it lacks features they desire, like location or square footage—factors the seller can't change. Consequently, an overpriced listing often sits, becoming stale and prompting buyers to assume something is wrong.

In short: price it right, and the market rewards you with a quicker sale and a minimal discount. Price it wrong, and you could face a long wait and a costly hit on the price. Once a listing becomes stale, sellers typically chase the market down with price cuts, rarely regaining buyer interest. This cycle can deter serious buyers, like trying to fill a leaky bucket.

Your broker should help you set a realistic sales price based on recent comparable sales, active listings in your area, and current market dynamics. Economic indicators, like today’s report of a 0.2% rise in the Consumer Price Index for October, which nudged the inflation rate to 2.6%, may also impact your home’s value, potentially giving it a slight boost.

While it’s natural to believe your home is worth more, it’s wise to trust your broker’s expertise. A well-priced property attracts serious buyers with matching budgets, often creating a competitive environment that can lead to stronger offers.

For questions on the Manhattan real estate market, connect with Serj Markarian here. 

Posted by Hannah Minnick, BHS Content Team