PRICE ADJUSTMENTS ARE ABOUT TO BE COMMONPLACE IN MASSACHUSETTS

After over six years of a low inventory seller’s market with frequent multiple offers and bidding wars, we are officially seeing the shift to a more balanced market and in some areas, to a buyers’ market by this fall. History tells us that when inventory goes down, it does so in a series of steps over multiple years, but when it rises, it does so much faster.  Different states throughout the country are experiencing this at different levels, but eventually it’s likely we will see this shift nationally on some level.  Florida, for example, has been experiencing it since last year.

This blog has been written specifically for the Massachusetts real estate market, where we are currently seeing a noticeable increase in inventory. However, similar trends are expected to emerge in other states as market conditions shift, so this information may soon apply more broadly.

Inventory Of Homes for Sale

Below is a graph that shows in green the last time there was a low inventory market with high demand in the early 2000’s.  As soon as inventory started rising, it did so rapidly from 2005 to 2008, then you see the gradual steps down from 2010 to 2022, with a slight and temporary bump up in early 2019 due to mortgage rates increasing for a few months in the fall of 2018.

Annual Jan inventory compared to annual price

If you look at the average price line in blue, you will see how it began to fall in 2007 within a year of inventory dramatically rising. Then in 2012, when the market steadied, you can see that inventory began to decrease as demand grew, causing prices to rise. Falling inventory has the opposite effect on prices, where they rise due to buyers competing with multiple offers. 

The chart also shows how in 2005 there were just over 20,000 homes for sale, and in 2006 it jumped to over 34,000. This year began with 5,928 homes on the market on January 15, 2025, but by May 31, inventory almost doubled to nearly 11,000 and is on the road rising above 15,000 homes for sale by fall.

See the chart below or check out our Real Estate Updates Page to see how inventory has increased week over week throughout 2025 compared to prior years. 

MA Inventory data for 2019 - 2025

There is absolutely no doubt that the market is amid one of these changes.  It doesn’t appear that inventory will rise as much as it did last time, as the conditions aren’t the same. There isn’t as much new construction, homeowners have much more equity than they did before, and many have low mortgage rates like in the high 2s% or low 3s%, and just won’t ever sell. Nevertheless, there will be more homes available on the market, and fewer buyers competing for those homes by the second half of the year. Buyers exit the market throughout the summer as some have already purchased in the first half of the year, some have resigned their leases for another year, and some have lost jobs due to the changing economy and tariff fears.

The only thing that could stop this increase in homes for sale, or maybe even reverse it is if buyer purchasing power increases with a dramatic fall in mortgage rates, but it’s unlikely in the next few months.

Click here to watch Anthony on Channel 7 discussing how inventory is now the highest it’s been in over five years.

What will prices do?

This is NOT 2008, so it doesn’t appear that we will see many major drops in prices, but the rising inventory gives buyers more selection and the upper hand, particularly in the second part of the year, so sellers will now be the ones competing. The best way to do that is with the list price. In a buyer’s market, you must price aggressively to attract buyers and generate competition.  When buyers hesitate to make an offer due to the highest-ever expense of ownership, homes sit longer on the market, and so the impetus is on the seller to reduce the list price to attract more buyers and create stronger demand. If you succeed, then you will receive an offer or maybe even experience a bidding war.

Price adjustments on listings that aren’t selling will be everywhere by fall, but WHY?

  1. Many homes were listed this spring and will be listed this summer that are priced higher than all the comparative homes in the neighborhood.
  2. The number of homes for sale is increasing in Massachusetts.
  3. The number of homes that are selling week by week is decreasing slightly.
  4. Many home sellers have forgotten how the market was in 2010 through 2015, when there was more balance and sellers had to compete.
  5. Many REALTORS® are relatively new who got into the business in the last 5-8 years, and haven’t been in this type of market, so they don’t know how to work with their sellers to price correctly.

How do you know when you need a price adjustment?

If you’re not getting the buyer activity you want, with private showing requests, a well-attended open house, or offers, and you notice your home is priced at the higher end of similar homes for sale in your area when you pull those comps, it’s time to seriously consider lowering your price.

If you do need a price adjustment, the sooner you do it, the better. Homes that sell fast sell for more money. Putting off a price adjustment only costs a seller money.

Get your price on target!

This Target Pricing Model below is something we have been using since 2006.  It shows how if you accurately price your home, you are in the bullseye and receiving strong offers and an adjustment is unnecessary.  If not, the areas around the bullseye will tell you roughly how much of an adjustment is recommended.

Anthony Reel pricing

For REALTORS®, click here for a video on the importance of pricing/adjustments

target pricing model jpg 0425

However, if that is not the case, then this is what should be immediately considered:

  • If your home is receiving showings but no offers, somewhere between a 3-5% adjustment should be made.
  • If you’re receiving a small number of showings and only some drive-ups, you probably need somewhere between a 6-11% adjustment.
  • Not getting any showings at all is a red flag that at least a 12% adjustment is necessary. When this happens, sellers are usually the most hesitant to adjust because they just cannot believe no one has even come out to see the house.

Consider the price brackets

Along with looking closely at comps, price brackets are also something that you must be mindful of as they are a helpful tool to use when setting or adjusting the price of your home.  Simply put, lowering your price to the next bracket will expose your home to those people searching within that next price range.

MA Price brackets for homesReal estate websites set up their property search portals with price brackets.  The person searching for a home will select the area, the number of beds, baths, and their price range. If your home is currently listed at $475,000, everyone searching for homes in the $450K to $500K range will see it, but you’re missing every person searching for homes under $450K.  Talk to your REALTOR® about factoring in these brackets when determining your list price.  This is also a key factor if you have been in the market for a while without offers coming in and need to adjust the price.

The most common thing that home sellers do when their home isn’t selling is to blame their REALTORS®, especially when it’s the first REALTOR® they hire.  The fact is, it could be your REALTOR® if:

  1. The pictures don’t look good online.
  2. If the brokerage company that the seller hired doesn’t have a big reach.
  3. If the REALTOR® has another job and isn’t responsive to buyer inquiries.

If none of those are the case, then it’s likely the price, and the sooner you lower it, the better off you will be! Anthony Lamacchia always says, “Us REALTORS® get more credit than we deserve when a home sells fast and we get more blame than we deserve when a home doesn’t sell!”

In Conclusion

This change isn’t something that needs to be frightening for anyone. More inventory means more confidence for the masses of sellers that have been staying put due to low inventory. Many hesitant sellers held off listing their home on the market because they were concerned about not being able to find their next home with so few homes for sale. Heading in the direction of a more balanced market is the key for those selling and buying at the same time.

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