Mind Games

Psychological pricing is said to have been around since at least the late-1800s, and it’s a tactic that isn’t going anywhere. According to a study by Quantitative Marketing and Economics, a product price ending with a “9” was able to outsell the same product, priced slightly lower.

Castillo believes setting a figure just below a higher price point is a beneficial pricing methodology. “All this time later, I think it does work,” he says. “There’s something just psychological to it, because $799,000 sounds like a world away from $800,000. It’s just more approachable.”

King encourages her sellers to price with a number ending in a nine or a seven, believing that it can attract more buyers. However, she raises the point that some agents may miss great homes that are priced a little higher, by only searching up to a certain value for the buyer.

Provost tends to think a little differently about the theory, asserting that no generalization exists regarding consumers’ psychology on pricing. “It simply works for some and not so much for others,” he says. “With that said, a lower price offered to a property purchaser always seems to be a helpful incentive, whether it’s $1 or $999.”

The What and Where

While the Intown market currently is suffering from low inventory levels in mid-range price points, says Castillo, Buckhead and North Fulton still have excess inventory in homes priced at more than $2 million. That price segment has more than 100 average days on the market.

Castillo explains that consumer demand is all about proximity to city centers. Atlanta and its metro are bursting at the seams with new development, which will worsen traffic (if that’s possible) – and not just inside the Perimeter.

“Sprawl is clogging roads as far north as Exit 13 on GA 400,” he says. “Being close to work, school and shopping is more important than ever – all over town.”

King says limited inventory has a definite impact on price, which can increase prices in certain areas. The market also continues to stabilize, causing price increases. Limited inventory actually is a plus for sellers whose properties are priced well. A lack of inventory plus a high demand is leading to increased pricing and faster selling times.

Castillo advises that agents be realistic when pricing properties: “Open your eyes and look around; not everything is selling,” he says. “You still need to be priced better than the homes languishing. Yes, your home is prettier, but you need to win the beauty pageant and the price war.”

Could National Pricing Happen?

This year, the National Association of Realtors commissioned The Swanepoel | T3 Group to examine top challenges facing the current real estate structure. A document titled “The Danger Report” was produced, featuring warnings to agents, brokerages and associations.

Of great concern was the warning of a pending technological overhaul. The FSBO market still comprises only 10 percent of the housing market, but two differentiating factors exist today.

Most homebuyers are Millennials who, on average, have fewer resources than did the generations before them. They’ll be opting to cut costs at every turn, possibly deciding against the use of agents altogether. Secondly, if a national homebuying platform were to hit the market bearing similarities to Uber and AirBnB, it could dissolve the perceived need for an agent. The hope is that agents will be ready and able to embrace any new technologies as they come, using them to full advantage in their daily business.