Priced to "Leave Room"? In OC, That Room Costs You.

 

Most sellers walk in with a number in their head. It's usually the one that costs them the most.

Eight in ten sellers expect to get their asking price or more. About four in ten actually do. That gap is where coastal Orange County sellers lose money, and it almost always starts on day one.

Four in Ten Is Normal, Not Bad News

When sellers hear that only about 40% of homes sell at or above asking, they assume the market has turned on them. It hasn't.

Back up to 2019, the last genuinely normal year before the pandemic scrambled everything, and the picture looked nearly identical. The stretch from 2020 to mid-2022 was the outlier: record-low inventory, buyers waiving everything, almost every home closing over list. That was never the baseline.

What we have now is more inventory, more selective buyers, and a return to normal. Pricing your home like it's still 2021 is the single most common way to leave money on the table.

The "Average Days on Market" Number Is Lying to You

Here's a local trap worth knowing about. If you look up how long Newport Beach homes take to sell, you'll see an average somewhere around 80 days right now. That number scares sellers into either underpricing or, more often, bracing for a long haul that justifies a high ask.

The average is misleading. The median is closer to five weeks, and well-priced homes under $3 million are routinely going under contract in two to three weeks with multiple offers.

So what's dragging the average up? Overpriced listings. A handful of homes that launched too high sit for months, get stale, and pull the whole citywide number with them. The same split shows up across our submarkets. In our experience, a correctly priced Eastside Costa Mesa or Mesa Verde home creates competition early, while the one priced on hope becomes the comp everyone uses to negotiate against.

Costa Mesa is selling close to asking right now, with sale-to-list ratios hovering near 100%. That only happens for homes that meet the market where it is.

What Overpricing Actually Does

It's tempting to think a high price gives you negotiating room. In this market, it does the opposite. Buyers notice price before anything else. When your home doesn't line up with comparable options, they don't make a low offer. They skip the showing entirely.

From there it snowballs:

• A high price draws less buyer interest.
• Less interest means fewer offers.
• Fewer offers means more days on market.

And in a community where buyers watch listing activity as closely as they do here, a long sit becomes its own story. The longer a home lingers, the more buyers assume something is wrong with it, even when nothing is.

The Price-Cut Trap, in Coastal Dollars

Most sellers respond to a slow start with a price reduction. Reasonable instinct, but the math is brutal at our price points.

NAR data shows the longer a home sits, the deeper the eventual cut: roughly 4.9% in the first two weeks, climbing to about 13.8% once a listing passes 120 days. On a national median that's a meaningful number. On a $1.6 million Costa Mesa home, a 13.8% haircut is more than $220,000. On a $3.5 million Newport Beach property, it's close to half a million dollars.

That's the real cost of "leaving room." The room doesn't help you negotiate up. It quietly negotiates you down.

Price It Right From Day One

Listing at, or even slightly under, true market value can feel backwards when your goal is the highest possible number. A lot of the time, it's exactly how you get there.

The goal isn't to list high and see what sticks. It's to create demand from the first weekend. NAR's guidance lands on a goldilocks approach to pricing: too high and buyers vanish, too low and they question the value, and the sweet spot in the middle is where competition forms.

Hitting that spot in coastal OC takes neighborhood-level data, not a citywide average. What a buyer will pay for a single-level home in Mesa Verde, a Peninsula condo, and an estate in Newport Coast are three different conversations. Here's how we'd think about it: price to the buyer who's actually shopping your block this month, present the home so it shows better than its comps, and let the first ten days do the heavy lifting.

Do that, and you're choosing between two outcomes. List high, watch it sit, and sell for less in three months. Or price it right, create competition, and negotiate from strength.

We know which one we'd pick.

If you're weighing a sale this year and want an honest read on what your home would actually do at the right price, we'd love to talk. No pressure, no pitch. Just the real number and the strategy behind it.

Bernice DeVries | Broker | Kastell Real Estate Group — Costa Mesa & Newport Beach