A record 49.7% of homes sold for over their list price in the four-week period ending on May 16, according to data from real estate firm Redfin that dates back to 2012—up from 26.7% in the same period a year ago and 24.8% in the same period in 2019. Separate data from real estate website Zillow shows a similar doubling, though it’s only as recent as February and puts the share that sold above list price at 28.6%, compared to 13% in February 2020. (Besides being older, Zillow’s figures are compiled from an analysis of county government records, while Redfin’s are based on Multiple Listing Service data.) The increase in above-list sale prices illustrates the fierce competition that’s developed among buyers in today’s housing market, but the fact that the percentages aren’t higher show just how much the surge in sale prices has already impacted buying—and selling—behavior. A survey of homeowners conducted by Realtor.com earlier this spring showed 29% planned to list their home for more than they thought it was worth. “In this market, you can push the envelope a bit,” said Anna Lieggi, a realtor with ReMax who splits her time between Tampa, Florida and Bucks County, Pennsylvania, on the border with New Jersey. But “buyers are very savvy now. A lot of them have put bids in on homes and lost out, and they know this market. They’re not going to overpay for a home unless that home is spectacular.” Low interest rates on mortgages and the desire for more space to work from home during the pandemic have pushed home prices to record highs, causing a manic market exacerbated by a severe shortage of homes for sale. As a result, buyers have been forced to search for creative ways—like bypassing the home inspection or making all-cash offers—to gain an advantage. In many cases, a bidding war is part of trying to gain that advantage, and in fact, a majority of homes did sell for more than list price in high-demand areas like San Jose, San Francisco, and Seattle, according to Zillow’s data from February.
Pushing to the Edge
But for most buyers in most markets there’s little willingness to bid higher unless they have no other choice, said Lieggi. And most sellers, taking the market into consideration, have already pushed their list price to the edge of what’s viable, she said. In New Jersey, where there’s little inventory on the market, Lieggi said she’s seeing homes sell above list about 40% of the time. Lieggi said she’ll look at the most recent activity, especially pending sales, immediately before listing a home to ensure the sellers have priced correctly. A well-priced home could get multiple bids that lead to more lucrative offers than expected. Jeff Tucker, senior economist at Zillow, said he was personally outbid four or five times during his recent home search, and he shared the stories with friends each time. But frustrating personal experiences aside, Tucker said, your best bet for getting the most value out of your home sale is to get the price right the first time, when you list it.
