Why Overpricing Your Home Will Cost You More (New NAR Data Explained)

Pricing your home correctly from the beginning is one of the most important choices you will make as a seller. Many homeowners still think, “Let’s start high. We can always come down later.” However, new data from the National Association of REALTORS® (NAR) shows why this strategy usually leads to a lower final price.

Lawrence Yun, PhD, explains that homes sitting on the market longer tend to face much steeper price cuts. In Honolulu, this pattern seems even stronger because buyers are well-informed and quick to react when a listing seems overpriced.

📉 New NAR Chart: Price Reductions Increase as Days on Market Rise

The NAR chart highlights how fast a home can lose value once it stays on the market too long.

As the chart shows, the discount almost triples when a listing remains active for more than 120 days.

Why Overpricing Leads to Bigger Price Cuts

Several common issues explain why overpriced homes lose momentum quickly.

1. Buyers Question the Home Immediately

When a listing stays active longer than similar properties, buyers wonder why. They often assume the home is overpriced or that it has hidden problems. Since Honolulu buyers follow local inventory closely, these doubts form early.

2. Each Price Drop Signals Weakness

A price cut may increase visibility, but it also suggests that the seller may accept less. Because of this, many buyers negotiate more aggressively once they notice reductions. They tend to ask for concessions, closing credits, or lower prices.

3. New Listings Push Older Ones Aside

Fresh listings attract attention right away. Meanwhile, older homes fall lower in search results and appear less appealing. This shift reduces showings and limits your chances of receiving strong offers.

4. Market Conditions May Change While You Wait

Real estate conditions move quickly in Hawai‘i. Rates, inventory, and buyer demand can shift from month to month. When that happens, overpriced listings often fall even further behind, forcing larger price cuts later.

Why Honolulu Sellers Should Pay Close Attention

Although this trend exists nationwide, it is even more relevant in Honolulu. Buyers here regularly examine:

• recent neighborhood sales

• pending prices

• days on market

• competing listings

Because the market is both transparent and competitive, even slight overpricing — sometimes just 3–5% — can cause a home to stall.

The Best Strategy: Start with the Right Price

Accurate pricing sets your listing up for success. A properly priced home attracts more interest early, which often leads to stronger offers. In many cases, sellers also receive cleaner contracts with fewer concessions.

Additionally, a correct price protects your equity. Homes that sell within the first two weeks usually experience much smaller discounts than those that remain unsold for months.

Final Takeaway for Honolulu Sellers

Overpricing does not create extra room to negotiate. Instead, it reduces your opportunities and increases your risk. According to NAR’s findings:

Homes that sit longer often sell for 8–13% below their original list price.

Therefore, if you want to maximize your results in Honolulu’s market, the smartest move is clear:
Price your home correctly from day one.