While some might have expected the record-breaking home price growth and historically low inventory levels seen in 2017 to push buyers away, buyer demand remained strong, and those who had the extra cash to be competitive in a seller’s market showed up in full force — something that is evidenced in Zillow’s latest home sales analysis.
According to Zillow, buyers paid more than the asking price in 24 percent of U.S. home sales — a 6.2 percentage point increase from 2012.
Buyers, on average, offered $7,000 above the asking price, a necessary move when homes are selling in less than 50 days in markets such as San Jose, San Francisco and Seattle.
“Low interest rates and strong labor markets with high-paying jobs have allowed home buyers in some of the country’s priciest housing markets to bid well over asking price,” said Zillow senior economist Aaron Terrazas in a press release. “In the booming tech capitals of the California Bay Area and Pacific Northwest, paying above list price is now the norm.”
“In the face of historically tight inventory, buyers have had to be more aggressive in their offers,” he added. “We don’t expect this inventory crunch to ease meaningfully in 2018, meaning buyers will be facing many of the same struggles this year.”
On the metro level, buyers in San Jose, California ($62,000), San Francisco ($41,000), Seattle ($20,100), Austin, Texas ($15,311), and Boston ($15,001) spent the most above asking price to nab the perfect listing.
In 2017, more than half of homes sold in San Jose, San Francisco, Salt Lake City and Seattle sold for more than the list price, and over the past five years, Seattle saw the greatest increase (+20 percent) in the share of sales that were above the asking price (52 percent).
Meanwhile, buyers in Cincinnati ($3,500), Phoenix ($3,600), Pittsburgh ($4,100), Atlanta, Tampa, Charlotte, Orlando and Las Vegas (all $5,000) made off fairly well, coming at least $2,000 under the national average ($7,000).
Only homes in Miami, Virginia Beach and New Orleans were the least likely to sell over asking price in 2017.
Source: Zillow