A record 13% of home sales include a price cut and a final sale price below the list price in addition to concessions, which often include money toward repairs and mortgage-rate buydowns, according to new data from Redfin. Home sellers gave concessions to buyers in 45.5% of home sales recorded by Redfin agents during the three months ending February 28, according to the report published today.
That’s the highest share of any three-month period in Redfin’s records, which date back to June 2020, and compares with 31.1% one year earlier. This is according to data submitted by Redfin buyers’ agents across the U.S.
Refin says concessions are becoming more common because rising mortgage rates and stubbornly high home prices have caused many buyers to put their plans on hold, which has motivated sellers to throw in freebies to attract the buyers who remain. Redfin agents report that sellers are offering to fund repairs, cover closing costs and pay for bidders to buy down their mortgage rates.
“Buyers today are way more demanding and selective. They’re willing to wait to find the perfect house, which wasn’t the case during the pandemic homebuying boom,” said Elena Fleck, a Redfin real estate agent in Palm Beach, FL. “During the peak of Covid, it took two to three days to sell anything regardless of the condition, location, or square footage. Now, a home that’s not perfect may stay on the market for three to four months if the seller doesn’t throw in something to sweeten the deal.”
Fleck said that homes with roofs over eight years old are not selling as buyers don’t want to put additional funds into repairs.
“I had a few sellers offer credits for new roofs to close the deal. We’re also seeing more buyers ask for credits toward their closing costs,” she said.
Redfin data also showed that in addition to offering more concessions, sellers have become increasingly likely to sell their home for less money than they originally hoped for. A record 25.2% of home sales recorded by Redfin buyers’ agents included both a concession and a final sale price below the list price during the three months ending February 28. A record 20.6% included both a concession and a listing-price cut that occurred while the home was on the market. A record 13% included all three.
I have been in the business since 1995 and concessions is the norm. Everyone talks about the exceptional markets that happen once in a while so new buyers or agents who were spoiled by easy seller markets will be uncomfortable. The rest of us veterans know the balance of selling and buying. But I guess it makes for something to write about. Everything comes back around.