SEATTLE, Nov. 12, 2020 /PRNewswire/ -- In more evidence
that persistent buyer demand is pushing a strong housing market
deeper into the year than usual, a new Zillow® analysis finds
the share of homes sold above list continues to rise, blowing past
the typical mid-summer peak. That is great news for prospective
sellers who want to maximize their return from a potential home
sale.
In September, 22.4% of homes purchased in the U.S. were sold for
more than their initial list price, up from 20.2% in August and
well above the roughly 15% of homes that did so during September 2018 and 2019. It is highly unusual for
the share of homes sold above list to continue rising this late in
the year. In both 2018 and 2019, the share peaked in July during
the height of the typical home shopping season before steadily
declining as the market cooled in the fall and winter months. This
year, the share has increased each month.
Buyer demand has been intense and persistent since the
market picked up speed in April after a dramatic slowdown in the
early days of the coronavirus pandemic. Potential buyers may be
feeling urgency to lock in low mortgage rates now, especially
if they sense prices will slip further from reach in coming years.
Many others may be taking advantage of new freedom to
telecommute from an area where they can more easily afford a
home.
Whatever the reason, strong demand is helping to keep a lid on
inventory as homes are being snatched up faster than sellers are
listing them. Inventory has continued to fall compared to last year
-- down 37.4% year over year at the end of October -- even as new
listings have returned near last year's level, an indication of
heavy sales volume. Homes were typically selling after only 12
days, a full 17 days faster than the same time last year[i]. Those
market dynamics are likely pushing buyers to make offers above list
price as they expect quick sales and competition from other buyers
while choices are limited.
"The housing market is taking us all back to Economics 101 and
teaching lessons about supply and demand," said Zillow senior
economist Chris Glynn. "A persistent
interest in buying and moving is creating an imbalance that is
driving prices higher than we typically see at this time of year.
In many cases, buyers in this market should be realistic about the
chance of bidding wars and leave themselves financial flexibility
by looking at homes listed for less than their maximum price
point. With tight inventory, low interest rates, and robust
demand from households re-evaluating their housing needs, a strong,
competitive market with many transactions is likely here to stay
into 2021."
Bidding wars have been most common for homes priced just above
and below the typical U.S. home value of $259,906. Homes priced in the second quintile of
all U.S. home listings -- between $192,001 and $264,000 -- sold above list in 28.2% of September
sales. Homes in this price range are also selling incredibly
quickly -- a recent Zillow analysis of time on market found
similarly priced homes typically sold faster than any other price
tier in September.
Homes priced in the most-expensive tier -- above $487,000 -- sold above list 15.7% of the time,
the lowest of the five price bands tracked in Zillow's study.
Still, this is the highest share sold above list in this price
range in any month since at least January
2018, the earliest month included in the analysis.
Perhaps unsurprisingly, homes that sold in the shortest amount
of time -- indicative of more-intense competition for these
properties -- were more likely to sell above list. Of homes that
have sold in 10 days or less since 2018, 28.5% sold above list. The
longer homes stayed on the market, the less likely they were to
sell above list. Even still, about 10.4% of homes during that time
that stayed on the market for 60 days or longer before selling went
for higher than their list price.
The share of homes sold above list is up from last month and
higher than a year ago in each of the 50 largest U.S. metros, and
has more than doubled in five of the top 50: Phoenix, San
Diego, Denver, Virginia
Beach and Riverside.
In today's competitive housing market, rushing into a home
that's not the best fit and paying more than they can afford are
two of the biggest risks that buyers face. Zillow experts
recommend making a list of top criteria and trade-offs they're
willing to make, using virtual or 3D Home tours to narrow down your
options more quickly than waiting for a showing, and shopping for
homes below a buyer's maximum price point to leave flexibility in
case of a bidding war. A trusted local agent can help discuss
trade-offs that may be necessary in a given market and help buyers
understand what makes a winning offer in their area.
Metropolitan
Area
|
Sold Above
List: All
Homes
(Sept. 2020)
|
Sold Above
List:
Bottom
Fifth
|
Sold Above
List: Lower-
Middle Fifth
|
Sold
Above List:
Middle
Fifth
|
Sold Above
List: Upper-
Middle Fifth
|
Sold
Above
List: Top
Fifth
|
United
States
|
22.4%
|
20.6%
|
28.2%
|
25.9%
|
21.8%
|
15.7%
|
New York,
NY
|
21.9%
|
21.1%
|
27.1%
|
25.8%
|
19.8%
|
15.8%
|
Los Angeles,
CA
|
33.0%
|
36.1%
|
38.9%
|
37.3%
|
32.0%
|
20.4%
|
Chicago,
IL
|
14.1%
|
15.8%
|
19.7%
|
15.8%
|
11.4%
|
7.8%
|
Dallas-Fort Worth,
TX
|
19.5%
|
25.0%
|
24.3%
|
19.5%
|
16.8%
|
11.9%
|
Philadelphia,
PA
|
27.6%
|
21.2%
|
29.5%
|
32.5%
|
32.2%
|
22.6%
|
Houston,
TX
|
12.1%
|
16.8%
|
15.5%
|
11.2%
|
9.2%
|
7.6%
|
Washington,
DC
|
35.8%
|
31.3%
|
38.0%
|
42.2%
|
36.7%
|
30.6%
|
Miami-Fort
Lauderdale, FL
|
7.8%
|
5.1%
|
9.5%
|
10.7%
|
10.0%
|
4.0%
|
Atlanta,
GA
|
20.3%
|
24.5%
|
27.4%
|
22.2%
|
15.9%
|
11.5%
|
Boston, MA
|
40.1%
|
40.2%
|
47.3%
|
45.1%
|
39.7%
|
28.1%
|
San Francisco,
CA
|
48.9%
|
45.3%
|
51.3%
|
51.1%
|
53.4%
|
43.2%
|
Detroit,
MI
|
25.2%
|
20.1%
|
34.4%
|
30.7%
|
25.0%
|
15.5%
|
Riverside,
CA
|
33.4%
|
27.6%
|
37.0%
|
42.7%
|
37.2%
|
22.6%
|
Phoenix,
AZ
|
27.9%
|
31.7%
|
35.8%
|
32.3%
|
26.1%
|
13.4%
|
Seattle,
WA
|
43.6%
|
49.3%
|
52.1%
|
40.9%
|
39.3%
|
36.2%
|
Minneapolis-St. Paul,
MN
|
41.1%
|
42.3%
|
53.9%
|
50.2%
|
37.9%
|
21.4%
|
San Diego,
CA
|
34.4%
|
36.6%
|
42.9%
|
40.8%
|
32.3%
|
19.1%
|
St. Louis,
MO
|
32.3%
|
21.1%
|
38.4%
|
42.7%
|
34.3%
|
24.9%
|
Tampa, FL
|
15.3%
|
13.1%
|
18.0%
|
19.5%
|
15.3%
|
10.8%
|
Baltimore,
MD
|
29.7%
|
22.8%
|
35.1%
|
35.1%
|
35.5%
|
19.8%
|
Denver, CO
|
30.3%
|
27.0%
|
44.3%
|
37.1%
|
24.3%
|
19.1%
|
Pittsburgh,
PA
|
24.2%
|
19.0%
|
30.1%
|
30.8%
|
24.5%
|
16.9%
|
Portland,
OR
|
37.0%
|
36.3%
|
46.3%
|
42.9%
|
35.3%
|
24.0%
|
Charlotte,
NC
|
23.4%
|
27.7%
|
29.9%
|
23.6%
|
19.2%
|
16.4%
|
Sacramento,
CA
|
35.3%
|
36.2%
|
45.3%
|
38.2%
|
32.0%
|
24.8%
|
San Antonio,
TX
|
17.9%
|
23.0%
|
23.5%
|
17.1%
|
14.3%
|
11.7%
|
Orlando,
FL
|
12.1%
|
10.7%
|
15.0%
|
15.4%
|
10.7%
|
8.6%
|
Cincinnati,
OH
|
29.5%
|
31.0%
|
42.3%
|
35.2%
|
25.4%
|
13.5%
|
Cleveland,
OH
|
31.6%
|
23.9%
|
38.1%
|
43.0%
|
33.5%
|
19.2%
|
Kansas City,
MO
|
38.4%
|
37.5%
|
50.9%
|
48.6%
|
32.2%
|
22.7%
|
Las Vegas,
NV
|
11.1%
|
9.0%
|
14.6%
|
12.5%
|
10.8%
|
8.4%
|
Columbus,
OH
|
41.4%
|
40.1%
|
52.9%
|
49.3%
|
40.7%
|
23.7%
|
Indianapolis,
IN
|
27.3%
|
27.9%
|
42.5%
|
31.5%
|
20.7%
|
13.7%
|
San Jose,
CA
|
43.1%
|
27.2%
|
44.4%
|
46.8%
|
52.1%
|
45.2%
|
Austin, TX
|
27.4%
|
24.4%
|
28.7%
|
28.8%
|
30.6%
|
24.5%
|
Virginia Beach,
VA
|
22.2%
|
22.4%
|
25.8%
|
27.5%
|
20.8%
|
14.6%
|
Nashville,
TN
|
19.5%
|
22.6%
|
22.8%
|
18.4%
|
18.4%
|
15.3%
|
Providence,
RI
|
35.5%
|
34.1%
|
44.4%
|
43.3%
|
37.1%
|
18.8%
|
Milwaukee,
WI
|
44.2%
|
29.3%
|
51.7%
|
55.6%
|
47.5%
|
36.8%
|
Jacksonville,
FL
|
12.1%
|
12.1%
|
16.4%
|
13.2%
|
10.1%
|
7.7%
|
Memphis,
TN
|
34.9%
|
25.6%
|
44.1%
|
48.8%
|
33.7%
|
22.5%
|
Oklahoma City,
OK
|
19.3%
|
26.1%
|
28.2%
|
17.2%
|
16.0%
|
8.9%
|
Louisville,
KY
|
25.8%
|
23.6%
|
37.4%
|
32.8%
|
21.6%
|
13.6%
|
Hartford,
CT
|
29.6%
|
27.7%
|
38.1%
|
33.6%
|
28.1%
|
20.5%
|
Richmond,
VA
|
31.8%
|
33.0%
|
40.2%
|
32.9%
|
29.9%
|
23.0%
|
New Orleans,
LA
|
14.3%
|
15.2%
|
24.0%
|
13.9%
|
13.5%
|
5.0%
|
Buffalo,
NY
|
46.3%
|
32.4%
|
60.4%
|
57.3%
|
50.3%
|
30.9%
|
Raleigh,
NC
|
27.8%
|
38.9%
|
29.9%
|
26.8%
|
23.7%
|
19.5%
|
Birmingham,
AL
|
25.4%
|
23.7%
|
32.7%
|
26.8%
|
24.6%
|
19.2%
|
Salt Lake City,
UT
|
37.8%
|
41.6%
|
43.0%
|
46.0%
|
35.4%
|
23.2%
|
*Table ordered by market size
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate
to make it easier to unlock life's next chapter.
As the most-visited real estate website in the U.S., Zillow® and
its affiliates offer customers an on-demand experience for selling,
buying, renting or financing with transparency and nearly seamless
end-to-end service. Zillow Offers® buys and sells homes directly in
dozens of markets across the country, allowing sellers control over
their timeline. Zillow Home Loans™, our affiliate lender, provides
our customers with an easy option to get pre-approved and secure
financing for their next home purchase. Zillow recently launched
Zillow Homes, Inc., a licensed brokerage entity, to streamline
Zillow Offers transactions.
Zillow Group's affiliates and subsidiaries include Zillow®,
Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow
Closing Services™, Zillow Homes, Inc., Trulia®, Out East®,
StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal
Housing Lender, NMLS #10287
(www.nmlsconsumeraccess.org).
[i] Zillow Weekly Market Report, Nov. 5,
2020:
https://www.zillow.com/research/zillow-weekly-market-report-27151/
View original
content:http://www.prnewswire.com/news-releases/strong-buyer-competition-is-pushing-homes-to-sell-above-list-price-301171797.html
SOURCE Zillow