The Mechanisms Behind the Real Estate “Bubble” Explained Simply: Why Are Property Prices Often Irrational?
💭 Do you see listings with outrageous prices and wonder if the market has gone crazy?
💭 Why are so many sellers asking excessive amounts, even when properties remain unsold for months or even years?
💭 And if everyone is asking for high prices, why should you ask for less?
Welcome to the mechanism of the real estate bubble.
This article is a wake-up call—not just for sellers, but for anyone who wants to understand how the market works and how to avoid traps that lead to missed opportunities.
1. Why Do Irrational Property Prices Happen?
Overpriced listings aren’t random. There are many factors that lead to a “bloated” market, even without real demand.
1.1 Seller Psychology: “My Property Is Better”
- Most sellers don’t base their pricing on market data, but on emotions and personal judgment.
- “This house is unique!”
- “I’ve invested so much in it, so it must be worth more.”
- “I saw another listing with a high price, so mine must be worth the same.”
Problem: The market doesn’t operate on emotion. If a property isn’t selling, its true market value is not what the seller thinks it is.
1.2 “Others Are Asking More, So Should I”
- Sellers look at listings and see high asking prices.
- They assume these are actual selling prices and raise their own.
Problem: Listings only show what sellers are asking, not what buyers are paying.
- A property can be listed for months or years without selling.
- The actual transaction happens at a much lower price than what you see in listings.
Solution: The real estate market is shaped not by asking prices, but by actual closed-sale prices.
1.3 Sellers’ Irrational Optimism: “If I Wait, I’ll Sell for More”
- Many sellers believe the market will keep rising indefinitely.
- So, they hold onto the property for months or years, hoping the price will increase.
Problem:
- The market doesn’t always rise. When prices drop, sellers who waited too long find their property worth far less than they expected.
- If someone needs liquidity and can’t sell, they’ve missed a valuable opportunity.
Solution: Correct pricing from the start is crucial. If the price is unreasonable, the property will remain unsold, and its perceived value will decline in buyers’ eyes.
2. How Can a Seller Know They’ve Overpriced Their Property?
If you’ve listed your property and the following apply, you may have priced it incorrectly:
❌ It’s been on the market for months without serious offers.
❌ You’re getting few or no calls from potential buyers.
❌ Interested parties visit but never follow up.
❌ Similar properties in your area have sold, but yours hasn’t.
❌ You keep receiving offers far below your asking price.
If any of the above is happening, the market is sending you a clear message: Your price is unrealistic.
Solution: Get an objective valuation from a professional real estate agent who understands true market values—not just the numbers shown in listings.
3. Why Set a Realistic Price When Everyone Else Is Asking More?
The answer is simple:
✔ Your property will sell first.
✔ Serious buyers will see it as an opportunity and act quickly.
✔ You’ll negotiate from a position of strength rather than being pressured to reduce your price later.
A properly priced property from the beginning sells faster and achieves a better final price than one that starts off overpriced.
Overpricing doesn’t mean more profit—it means more time on the market and, ultimately, a lower final sale price.
Conclusion: The Market Rewards Realism
If you’re a seller, don’t get trapped in the illusion of inflated listing prices.
✔ Smart sellers don’t ask for extreme prices—they ask for the price that brings the best result.
✔ The market is determined by real transactions, not wishful thinking.
✔ A realistic price means faster sales and better final outcomes.
📞 Contact me today for a professional valuation of your property—and don’t let the listing price “bubble” lead you astray!
Copyright Notice
The articles included in this document are the intellectual property of Dimitris V. Zamanis and are protected by copyright law, as defined by Greek and international legislation (Law 2121/1993 and relevant European and international copyright conventions).
Reproduction of these articles is permitted, provided that the source is clearly cited and an active hyperlink is included, linking to the original publication or the author’s website.
The following are strictly prohibited:
❌ Modification, adaptation, or distortion of the content, ideas, or meanings expressed in the articles.
❌ Presentation of the articles, in whole or in part, as original content by a third party, whether in identical or altered form.
❌ Commercial use or exploitation of the content without written permission from the copyright holder.
Any violation of the above terms may result in legal consequences, in accordance with current Greek and international copyright protection laws.
For permissions beyond the aforementioned terms, please contact the copyright holder at info (at) mesitis.org