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The study examines the influence and mechanism of local government financial pressure on average real estate sales price. Annual data of Chinese National Bureau of Statistics from 2000 to 2020 were analyzed based on the vector autoregressive model. Additionally, fixed asset investment and growth rate of population were included asmoderators to analyze their moderating effects on the relationship between local government financial pressure and average real estate sales price. Evidently, local government fiscal pressure has a significant positive impact on the average real estate selling price, fixed asset investment and population growth rate are negatively correlated with average real estate sales price. Population growth rate has a negative moderating effect on the relationship between local government fiscal pressure and the average real estate selling price. Therefore, this paper suggests reducing the fiscal revenue and expenditure gap faced by local governments, alleviating the financial pressure of local governments, increasing the proportion of residential land supply, maintaining demographic dividend, and limiting the dependence of local governments on land finance, so as to restrain the price fluctuation of real estate market.