In a report from Zillow, 24.1% of U.S. homes sold in 2017 were sold for above list price, which is an average of $7,000 (3.1%) over list price. This is an increase from 17.8% in 2012. In certain areas of the country, over half of the homes on the market sold for more than the list price, including homes in Seattle, San Francisco, and Salt Lake City.
In Tampa, 6% of homes sold above list price (up from 13.5% in 2012), and the median amount paid over list was $5,000 (2.7%).
Why Are Homes Selling Over List Price?
One of the reasons homes are selling over list prices is because of supply and demand – more people want to buy a home, and inventory is shrinking. Young adults are buying houses more frequently than ever, and they are inundating the market. Lower interest rates have also given people the ability to pay more for a home.
As a result, homes are selling extremely quickly, so people are more likely to jump at the chance to buy a home. The typical homebuyer will spend four months looking for a home, and has to make a few different offers before one is accepted, per the 2017 Zillow Group Consumer Housing Trends Report. Meanwhile, the typical home will only be on the market for 80 days (a little under three months); and in some areas, the median time a home is on the market is under 30 days.
“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 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. We don’t expect this inventory crunch to ease meaningfully in 2018, meaning buyers will be facing many of the same struggles this year.”
Home Buying Trends Are Changing
It’s also interesting to examine changes in home buying trends. Most people are now older when they buy a home, and ready to start a family. The term “starter home” isn’t used quite as frequently anymore. Today, people are buying homes when they are married or engaged, and share home-shopping duties with their spouse or partner, while including other family members and friends in the process, according to another report from Zillow on the home search process.
Still, some things haven’t really changed. Most people (even millennials) want to see the home before they purchase it, and staging doesn’t really matter.
2018 Housing Market
There haven’t been any signs that the market is going to change too much moving into 2018. In fact, some signs point to the housing marketing becoming even more competitive as more and more people buy a home. And with workers taking home more of their income due to federal income tax changes,
Getting a Mortgage
For people buying a home and financing it with a mortgage, it’s important to have a mortgage broker who gives you a competitive advantage.
Components of mortgage brokers who give their clients a competitive advantage include:
- Rigorous mortgage pre-approvals are important, so you can get a good mortgage with a great rate.
- Low interest rates are important, so you can save money and make an aggressive offer on a home.
- Fast closings are important, since sellers will often choose an offer from a buyer who can close quickly.
Related: Select a Mortgage Broker Who Gives You a Competitive Advantage
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers and homeowners in all of Florida, Virginia, and Pennsylvania.
We offer our clients rigorous mortgage pre-approvals, low interest rates, and fast closings. We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, or to refinance your existing home, please fill out our Quick Mortgage Application, or contact us direct.