No Seasonal Slowdown: Homes are Selling Faster and for Above List Price

Unlike a typical year, the market is booming this fall.

Buyer demand, super low interest rates and a shortage of homes for sale continues to make this a housing market for sellers. 

The latest evidence: More than 1 in 5 home sellers sold their homes above the asking price in September.

In a typical year, home sales would begin slowing for the season in September. This year, the share of homes selling above list price in September — nearly 23% — is the highest of any month since at least January 2018 and cuts across all regions, according to economists.

Homes priced around $256,906 — the typical value of a home in the U.S. — were most likely to sell above the list price. 

The analysis found that about 28% of homes priced between $192,001 and $264,000 sold above the asking price in September, and they sold more quickly.

Even more expensive homes priced between $346,001 and $487,000 were affected by the competition: 22% of those homes sold above list price, a 6-point gain over September 2019.

In dollar terms, the typical home in the U.S. that sold for more than its list price in September was listed for $264,292 and sold for $277,348 — a premium of $13,056, or 4.9% above the list price.

Homes that spent the shortest amount of time on market were most likely to sell above their list price. But it’s not unheard of for homes that have been on the market for a while to still sell at a premium: Since 2018, about 10% of U.S. homes that took 60 days to sell ended up selling above list. 

Some markets appear to be more competitive than others. Among the nation’s 50 largest markets, homes that sold above list fetched the highest premiums in San Francisco (8.8%), Buffalo (8.5%), San Jose (7.5%), St. Louis (7.3%) and Milwaukee (7.1%). In other areas, such as San Antonio, Virginia Beach and Las Vegas, homes that sold above the list price garnered more modest premiums of 3.2%.

The data is a powerful indicator of just how tough the competition is for buyers, and hints at the possibility of bidding wars and multiple-offer scenarios in some cities.

But the big picture is already shifting a bit. Modest drops in mortgage applications and pending sales suggest we may be heading toward a winter cooldown in sales activity according to economists. But the basic laws of supply and demand — lots of would-be buyers and comparatively few homes available for sale — will likely continue to drive prices higher, meaning a continued sellers market in 2022.

Give Donny a call to help you see what your home is worth and if you are looking to sell your home or buy a new home. He has homes all over the tri-county area for sale whether it be private homes or new construction. Specializing in Livonia but has immense knowledge of cities such as Farmington Hills, Plymouth, Northville, Novi, Canton and Commerce for all real estate needs.