I'll add that this is just one agent's humble opinion based solely on my experience, not study. Obviously some people have had success going the other direction or there would be no debate.
I would not price a million dollar property at $999,999 because buyers in that range often look at whatever is above the million dollar mark. I also believe that in this price range, it does add a lot of prestige to the property to be associated with properties in the 6 digits.
I do agree with the point that was made that the rule will differ at other price points. If I had to list a $100,000 property, I would definitely list it at $99,999 or $99,900 or $99,888.
The last point I would like to make, is that the odd pricing strategy is good in industries where there is no bargaining. Look at your supermarket or gas station and you will see that almost all prices end in 9.
When someone searches online for a home in your area under $1 million, a price of $999,999 meets the criteria. With that price you will have broadened your range of potential buyers.
And with 80 percent of the buyers starting their search for homes online....
Melissa Mancini, Realtor, CBR, GRI
In San Francisco Bay area, we price houses at the thousands, ususally have a 9 or 5 at the end, such as 799,000. or 795,000.
I think with the buyers market, we should all look for properties over our client's upper limit, as there might be negotiation room. A.lso, with the automatic email sign ups for notificaiton of new listings, Realtors should advise their clients to set up searches the same way so as not to miss out on a good property.
Totally in agreement with Diane's answer. And, yes, in NJ, we have an additional tax on properties sold at 1M or above. For that reason, some sellers will price a home at 999, when, if not for the luxury tax, might have priced at 1.075, or 1.1. The tax hurts property values in that range just over 1M.
Diane's answer is also excellent about pointing out that by pricing at exactly an even number, be it 1,000,000 or 250,000 versuses the "999"
Here's my addendum to an excellent answer already provided....
The value of the a property being captured in more searches far outweighs any psychological benefit of the "999" strategy. Any general studies on the "999" category would be faulty. A study on real estate pricing could only be valid if it specifically addressed buyers search habits.
As far as a basic search goes, you would do better at the $1 million price to pick up buyers in both ranges you quoted, IF people were searching that parameter--up to $1 million and from $1 million to ??. I have found that around $1 million, people will range from a looking price range of 700,000 to $1.3 million.
Don't know if there is a science, but there have been many stories written on the psychological effects of pricing and it seems that people still like the bargain price of $9.99 vs. $10.