Is your Home Overpriced? Key Signs to watch out for...

Pricing your home correctly is crucial when entering the property market. Overpricing can deter potential buyers, extend the time your home sits unsold, and even lower its perceived value over time. In the South African real estate market, where pricing is influenced by location, demand, and economic conditions, getting it right is essential.

Other houses in your neighbourhood are selling, but yours is not. If the overall area is experiencing slow sales, you may be facing a market slump that requires patience. However, if your neighbours have successfully sold their homes while yours remains unsold, it means you have priced your home outside the market and need to adjust.

Compare apples with apples, not beans with watermelons. When evaluating your neighbours' sales, look at the price they achieved per square meter under the roof, not just the overall selling price. Compare this with your current price per square meter. Ideally, you should be priced just below similar properties on the market—or at the very least, not above them. As long as there are cheaper homes available with similar under-roof space, they will sell before yours does.

1. Your Property Has Been on the Market Too Long

In South Africa, the average property takes about 8-10 weeks to sell, according to Lightstone Property reports. If your home has been listed for months with little interest or no offers, it may indicate that the price is deterring buyers. Long periods on the market can make buyers question why the property hasn’t sold, potentially leading to even lower offers.

2. Low Viewing Numbers

A lack of foot traffic or inquiries is another clear sign. Serious buyers often research multiple properties before deciding, and if your home isn’t getting attention, it may not be priced competitively. Property24 data highlights that online listings with competitive pricing receive up to 30% more views and inquiries than those perceived as overpriced.

3. Overwhelming Negative Feedback from Agents or Viewers

If prospective buyers or real estate agents frequently comment that the property is too expensive compared to similar homes in the area, it’s time to take a closer look. Pay attention to Comparative Market Analyses (CMAs) provided by your agent, as they evaluate recent sales of comparable homes.

4. Your Property Is Priced Higher Than Similar Homes in the Neighborhood

Location is one of the primary factors in property valuation. If similar homes in your area are priced 10-20% lower and selling faster, your property may not be aligned with the local market. For example, in Gauteng, houses in estates with high-end finishes generally fetch higher prices, but excessive pricing beyond neighborhood benchmarks can still deter buyers.

5. No Offers, or Only Lowball Offers

Receiving only lowball offers—or none at all—is a red flag. Buyers tend to avoid negotiating on overpriced homes and might skip making an offer altogether. According to ooba, South Africa's leading bond originator, homes priced correctly often sell at 95-98% of their asking price, while overpriced homes may sell for far less or remain unsold.

6. The Market Has Shifted

South Africa’s property market fluctuates due to factors such as interest rate changes, inflation, and economic conditions. For instance, following the Reserve Bank's rate hikes in 2024, many buyers adjusted their budgets, seeking properties within a more affordable range. If your property doesn’t reflect current economic realities, it could be overpriced.

How to Avoid Overpricing

  • Get a Professional Valuation: Partner with a reputable real estate agent or a property valuation expert to determine a fair market price.

  • Stay Informed About Market Trends: Platforms like Property24 and Private Property offer insights into market activity and average prices in your area.

  • Be Open to Adjusting the Price: If your property isn’t selling,

    re evaluate its price with the help of an experienced agent.

  • Invest in Staging and Presentation: While price is critical, the way you present your property can also influence buyer interest.

Final Thoughts

Overpricing your property can cost you time, money, and opportunities. By aligning your home’s price with the market and listening to buyer feedback, you can ensure a smoother, faster sale. Whether you’re in Johannesburg, Durban, or Cape Town, understanding your market is key.

For professional guidance, reach out to LUXLIV, who will guide you on how to price your home in line with market related prices in the area.