More homes on the market are ‘going stale’ because of this huge listing mistake

More homes for sale are going “stale” after sitting on the market for months, raising concerns that some sellers are overestimating what the market is willing to pay.

In December 2024, half of all active listings had been on the market for 70 days or more, up from 61 a year earlier, and the longest average time on the market for December 2019.

Even worse, the share of “super-stale” listings that have been sitting on the market for more than 180 days is also rising, reaching 24.3% last month, the highest percentage for a December since 2020.

Stale listings can raise red flags for buyers, who may fear something is wrong with the home. However, experts say the main reason listings stall is simply the wrong price.

“Overpricing is the main culprit in listings becoming stale. “Many sellers have expectations about their home’s value stemming from the 2021-22 buying frenzy when listing prices rise across the country,” says Realtor.com Senior Economist Joel Berner.

“Sellers may see what their neighbors got for their homes during that period and be reluctant to list for less, causing their homes to stay on the market longer and eventually needing to get a price reduction to sell.” ‘ultimately sold out,’ he adds.

While home prices are still rising nationally, they are doing so much more slowly than during the post-pandemic buying frenzy, when mortgage rates were less than half of what they are now.

In some markets, prices are essentially flat or declining on a year-over-year basis, presenting a harsh new reality for sellers who are used to skyrocketing valuations.

“Realizing that your home is worth less on the market than it was a few years ago is a tough pill to swallow, but sellers must accept the new normal if the pace of sales is going to pick up,” says Berner.

Where stagnant listings are growing faster

Last month, time on market increased from a year ago in 46 of the 50 largest metro areas, up from 42 in November.

Average days on market increased the most in Nashville, TN (+22 days), Orlando, FL (+21 days) and Rochester, NY (+21 days).

Notably, time on market in those three metro areas, as well as 11 others, increased to higher levels than the first pre-pandemic December average from 2017 to 2019.

At the state level, there are 12 states where homes are now spending more time on the market than in 2017-19.

They are Arizona, California, Colorado, Florida, Hawaii, Idaho, Nevada, Oregon, Tennessee, Texas, Utah and Washington.

Higher mortgage rates weigh on prices

After falling near 6% last fall, average 30-year fixed mortgage rates are rapidly approaching 7% once again, reducing purchasing power for buyers.

“Behind the scenes is the real villain of the story: mortgage rates,” says Berner. “Higher rates have dampened demand, slowing the market and leading to listings spending more time on the market and some becoming stale. Sellers will adapt by listing their homes at lower prices.â€

The median list price of active homes in December was down 1.8% from a year earlier, to $402,502, according to Realtor.com’s December inventory report. The price drop was partly due to an increase in the percentage of smaller, more affordable homes for sale, but it should still serve as a signal to sellers.

Home sales have also slowed to a snail’s pace, following two straight years of the lowest transaction volume since 1995.

Slower sales can make it more difficult to price a listing accurately because there are fewer recent comparable sales to work with, says Brian Stephens, a Lakeland, FL real estate agent and team leader with eXp Realty .

“You have to dig deeper into the data to find completions to support what you believe the price is and what the market is,” he tells Realtor.com. “You have to reach out, you have to retrace your boundary, stay in the same zip code, and then find other computers that will work with that house, but maybe they’re just outside of that neighborhood.”

A return to normality?

Real estate experts warn that the increase in the percentage of dormant listings is not necessarily a sign of impending doom, but may simply represent a return to conditions before the COVID-19 pandemic, when homes would often sit on the market for months before they were sold.

Nationally, the time a typical active listing spent on the market last month was still eight days less than the average seen in December from 2017 to 2019. (Time on market is seasonal and typically peaks in January, due to (low number of new listings coming on the market that month.)

“We’re going back to a normal market where it takes three to five months to sell a house,” Stephens says. “You can sell your house in a week or two, but normally it will take three to five months to sell because it’s just a normal market.”

However, this change may require some adjustment for both buyers and sellers, who are used to seeing homes fly under contract within days of listing.

“The sky is not falling on sellers. We are just returning to a stable market at a different pace than where we were at the time of the post-pandemic buying,” says Berner.

What to do about a stagnant list

For sellers who fail to find a buyer after many months on the market, there is ultimately only one solution to finding a buyer quickly: lower the price.

Stephens says his message his salespeople are usually resistant to hearing. For this reason, it tries to offer alternative solutions based on feedback from potential buyers.

Maybe the house could use a fresh coat of paint, for example, or new landscaping. Perhaps the seller can offer a floor allowance.

“I try not to go into houses priced too high, because there’s usually a price,” he says. “But that’s never what they want to hear.”

After six months or more on the market, Stephens sometimes advises clients to pull their listing off the market and then restart a few months later when a new group of active buyers are looking for homes.

Finally, if a home fails to sell after a year, he says sometimes the best thing to do for the client is to let them try to sell the home with a new listing agent.

“Sometimes it’s better to leave as an estate agent, honestly. Just let someone else try,” he says. “But then, normally what they’ll do is start over with someone else, who will tell them that they have to lower the price, and then they do it — just like we told them six months ago.”