An increasing number of home sellers are making concessions to lure buyers into purchasing their properties.
According to new data from Redfin (NASDAQ:RDFN), 42.9% of home sales during the three months ending April 30 involved seller concessions, up from 25.5% one year ago. The three-month share is slightly lower than the 45.6% peak recorded for the month of February.
The concessions run the gamut from covering closing costs and mortgage-rate buydowns to offering money for home repairs. Redfin noted February’s peak for concessions could be attributed to “typical seasonality” and concessions are less common in the early spring when more buyers enter the market.
Redfin also reported that just over one in seven (15.7%) home sellers dropped their asking price in addition to providing a concession to the eventual buyer during the three months ending April 30 – one year earlier, that share was only 4.2%. And roughly one in five (20.5%) of homes that sold during the period had a final sale price below the asking price in addition to a concession, up from about 7% a year earlier, while about one in 10 (9.4%) had a concession, a price drop and a final sale price below the original list price, up from 2.2% one year earlier.
Tampa had the greatest year-over-year upswing in seller concessions than any other metro Redfin analyzed, with sellers giving concessions to buyers in 58% of home sales during the three months ending April 30, up from 12% a year earlier. The next-biggest increases were in Nashville (49%, up from 5.6%), Salt Lake City (46.8%, up from 12.3%), Seattle (45.7%, up from 11.7%) and Raleigh (64.6%, up from 31.2%).