It used to be that when you were selling your home you would list a price a little higher than the offer you were willing to accept – that way, as bids came in, you could determine which one you were willing to settle for.
The way things are going now, that concept is growing extinct.
That’s because more than half the homes being sold in America are being sold at above their list price.
With the housing stock dwindling, and the demand for homes increasing, prices are rising exponentially. As a result, the market has become uber-competitive, and home sales are now happening faster, for more money, sometimes sight unseen and even with cash offers.
According to a recent study by Redfin that looked at home sales in 400 Metropolitan markets, 51% of homes sold in the U.S. sold above the list price during a four-week period that ended in late May.
This was a whopping 26% increase over the same time period in 2020.
And although the pandemic put a crimp in home sales initially last Spring, the jump is still significant.
In addition, the study showed the median home sale price was $354,250, the average asking price for a single-family home was $361,875, and the average length of time a home lasted on the market was 17 days. All three of these data points are records.
Price growth usually doesn’t happen until later in the summer, but the skyrocketing prices haven’t just unhinged the door to alternative approaches toward buying a home, they’ve blown the door completely out of the way.
The housing market is expected to remain white-hot until mortgage rates increase, which likely won’t occur until after the summer months.
Until then, it’s going to be more of the same – buyers being forced to bid above a home’s list or maybe even higher than they budgeted to get a home.
The study also showed that the number of active listings are down 49% from the same time in 2019 – which was used as a measure so it could compare to pre-pandemic data.
That indicates a severe lack of housing available in general is driving home prices through the roof across the country and is pricing a lot of potential buyers out of the market.
The problem is, there are still active buyers who are able to traverse the turbulent waters and are willing to buy homes at these more exorbitant prices.
The study showed that of the 400 markets studied, 399 of them saw increases in home sales. The lone market that had a decrease was Rochester, N.Y. (-3%).
The largest gains were in markets like San Francisco (184%), San Jose (150%) and Miami (120%)
As for prices, they unsurprisingly increased in all 400 markets. Th largest price increases took place in Austin (42%), Oxnard, Calif. (26%) and Miami (26%). The smallest increase was in Honolulu (0.2%).
About the American Property Owners Alliance
The American Property Owners Alliance (The Alliance) is a nonpartisan, non-profit organization created to protect and support property owners and pave the way for future property owners. Our mission is to educate property owners about federal issues, laws and policies; to advocate for owners’ rights and interests; and to mobilize, when necessary, to secure those rights and interests.
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