Are Sellers Overpricing Homes?

The disconnect between what sellers want and what buyers are willing to pay hasn’t been this dramatic since early in the pandemic-era market. In March 2025, the typical home was listed for $469,729, while the typical home sold for $431,057—a 9% gap, or $38,672 difference.

This pricing disconnect is the result of two major forces:

1. Sellers are anchoring their expectations to last year’s record highs.

2. Buyers are pulling back due to high mortgage rates and economic uncertainty.

The result? Standoff conditions, where many homes sit on the market longer and price reductions become more common.

What’s Fueling the Growing Gap?

Today’s housing market is leaning in buyers’ favor, but many sellers haven’t caught up with the new reality—resulting in a widening gap between asking and actual sale prices.

In March, asking prices jumped 6.2% compared to the previous year—marking the fastest pace of growth since fall 2022. By contrast, sale prices only increased 2.5%—the slowest pace since September 2023. The last time list-price growth outpaced sale-price growth this drastically was in July 2020, during the height of the pandemic buying frenzy.

But unlike 2020, when both buyers and sellers were racing upward together, today’s environment tells a different story:
“Sellers are pricing high based on comps from the past rather than current demand.”

The Buyer’s Market Reality

“Homebuyers today have the upper hand because they’re outnumbered by sellers, and that’s a tough pill for sellers to swallow,” said Redfin Senior Economist Elijah de la Campa. We’re seeing more homes on the market, more seller incentives being offered, and a noticeable cooling in how fast sale prices are climbing.

For buyers, this means more room to negotiate—even if a home is priced above your budget.
“I encourage you to get the conversation started and make an offer anyway,” said Chaley McVay, a Redfin Premier agent. “It’s not out of the ordinary to see sellers lower their prices and give concessions.”

Lessons for Sellers in Today’s Market

Overpricing can backfire. Homes listed too high often linger, gather dust, and eventually need price cuts.
“The most important thing you can do as a seller right now is fairly price your home,” McVay added. “If you overprice, chances are you’ll get no activity.”

Sellers who bought during the market peak in 2021 or 2022 are especially vulnerable to overpricing in hopes of recouping their investments. But as McVaywisely explains:
“They didn’t lose money because however much money they could have made in the past is hypothetical money.”

How This Affects Orange County Real Estate

Here in Orange County, median list prices in markets like Anaheim reached $1,299,000—up 9.2% year over year—while the median sale price trailed at $1,207,951. That’s a noticeable gap, reflecting the national trend.

With high mortgage rates and cautious buyers, even in sought-after coastal areas, sellers need to meet the market where it is—not where it used to be.

Bottomline

In today’s housing market, both buyers and sellers need a savvy, data-driven strategy—and that's exactly what Whitestone Real Estate delivers. Whether you're looking to buy smart or sell successfully in Orange County, I’ll help you navigate pricing, negotiation, and market timing with confidence. Let's turn today’s challenges into your advantage—reach out and let’s start planning your next move.

Reference: Katz, L. (2025, April 29). The typical home seller wants $39,000 more than the typical buyer is willing to pay. Redfin News.