In the “good ol’ days” pricing a home wasn’t much more complicated than looking around and adding $x to what seemed reasonable. There seemed to be a buyer just waiting. Those days are gone and now it more important than ever to enter the market priced accurately or even slightly below. In an up market, if a house is overpriced on day one, the market will eventually catch up to it. In a down market, an overpriced house gets more overpriced by the day and price reduction that do not get ahead of the market end up being a correction, not a cause to sell:
A (fictional) house hits the market. There was a buyer for it at $300,000 but when it hit the market, it was listed at $310,000. House and buyer never met. Sixty days later the price is reduced to $300,000. The market has declined a little more. There is buyer out there who is willing to pay $290,000. The house and buyer never meet. This process gets repeated and the house gets the stigma of “being that overpriced house.” It may never been greatly overpriced at a given moment but it never got ahead of the market to become THE house for the prospective buyer. The pricing chased the market down but never caught up.
I’m not saying this is a good or bad time to be a buyer or a seller. Everybody has their own reasons to be in or out of the market at any given moment. What it underscores is the need to enter the market at the right price or if you are currently for sale to get ahead of the market, now. The house would have sold at $300,000 in this purely illustrative example. Now, it is still on the market somewhere below $290,000. We’re not debating whether there shoud have been a buyer at $300,000 or one at $290,000 since whatever their reasons for at the time made them purchase.