Just over 28% of homes are now selling above the asking price, according to a data report from Redfin (NASDAQ: RDFN). This is down from 32% one year earlier and the lowest level for this time of year since 2020 when the pandemic paralyzed the housing market.
The share of homes selling above asking price has fallen year-over-year in all but five of the most populous metro areas. Three California metros – San Jose, Anaheim, and Oakland – recorded the biggest declines, though more than half of homes are still selling above asking price in San Jose and Oakland.
Redfin also noted that just over one-third (37.6%) of homes went under contract within two weeks, the lowest level for this time of year since 2020. At the same time, new listings are up 5.2% year-over-year.
“It’s still tough for many Americans to buy a home, as affordability remains a real challenge, but house hunters should know that sellers are accepting offers below asking price and giving concessions to get deals done,” said Chen Zhao, Redfin’s head of economics research. “Buyers have negotiating power, especially if they’re flexible on timing or location, or if they’re willing to take on a fixer upper. Buyers should negotiate and be prepared to move on to other homes if a seller is unwilling to meet them halfway; they may be able to get a better deal elsewhere.”
I suspect the reason some homes that are selling for more than the asking price is because of the concessions buyers are requesting for interest rate buy-downs and closing cost assistance are being added onto the listing price. Generally, reports are that the market is depressed for resale homes and that buyers are in a good position to negotiate lower than listing prices. So, if that is the case, the only logical explanation for selling above the listed price is because of buyer requested concessions that are being added on.
this seems to be using CA statistics. it is not applicable across the country. 2020 and 2021 pandemic years were the BEST sales for more than 50% of the country. Hardly “paralyzed.
also include the 8 states me and my family are licensed, current sales are below ask unless the price was already reduced…
The major reasons why homes are selling, 10 to 20% over the asking price is because those homes are listed way below true market value. Which sparks multiple offers and bidding wars. In low inventory markets it’s a pricing strategy mostly manufactured by the listing agent. This has been happening over the past 4 years… as home prices rose fast, agents had a hard time staying ahead of the market… but now things are changing. Yet, in some markets 80% of homes sell over asking price due ro this questionable pricing strategy
Several real estate reports note that nearly 30% of homes are bought by large investors.
I’ve read of some new developments where all homes were bought by an investment group, rather than individual buyers.
This needs further examination.
Taxpayers are being asked to subsidize “low income” housing in many areas of the country, including the more expensive areas that are already crowded.
Rather than asking taxpayers to subsidize low income housing, it would be better in tight housing markets to put a cap on how many residential units (and total value) that any one investor could buy and own in that area, including the total units owned thru one or many investment groups.
Investing in residential housing is a great way to increase your wealth over time, and it provides a high level of control by the investor. Also, many people do not have pensions, and owning rental units ensures an income stream when that investor retires (a pension via rents). That’s fine, but there should still be limits on the number of units (and/or value of units) if those rental units are in tight housing markets simply because it should NOT fall on taxpayers to subsidize low income housing, especially since it never fixes the affordable housing problem in the long term.
I’m past my mid 60’s, and I’ve seen this rerun my entire life. In California, taxpayers are asked endlessly to subsidize low income housing that are often located within a few yards of premier beaches, some of the most expensive real estate in the country! That’s crazy!
Developers have looped into the “low income” housing game and are making a killing at taxpayer expense, and some of the costs per square foot for these low income (attached) units are outrageous.
Another options is to index minimum wages to the cost of living in specific areas, but to receive that wage, an employee would need to prove that they live within that region. This would cut down on long commutes and traffic jams, which costs the state a lot of money in road maintenance and expansions and costs everyone wasted time sitting in traffic.
I get why having workers near the workplace saves the state money, but, right now, there is NO requirement that low income buyers must also work near the low income home that they are allowed to buy at below market value. Yet, we still see developers peddling the idea that high density housing (with a portion allotted for low income units) will reduce traffic because the low income buyers need to live near their work.
But there is no proof that those low income buyers will work near that home initially nor in the long term. It’s a smoke screen for developers to get much higher density bonuses than they otherwise would get.
I don’t want to see our nation turn into a society where only mega rich investors own most of the housing, lands, and farms and most of the people are forced to rent, but we are trending in that direction. I don’t think big investors should be allowed to own hundreds of housing units. I’m sure others would disagree. But there is a huge downside to a nation of mostly renters, as was the case in OLD Europe with a highly stratified society of Kings, Queens, a small Nobility class, a small middle class, and the majority of people trapped in poverty owning no land and no housing. That dire poverty and the civil unrest that was rising drove Europeans to flee to the Americas, and I hope we don’t recreate the same massive class divisions here, but that is exactly what is happening.
It won’t end pretty for most people if this trend continues.
The WRE news email has another article today that reveals the scope of mega-investors and the damages that can result.
CA has sued this rental housing investor company, owned by one family.
This ONE family owns 22,000 rental units in CA. This is exactly what my prior post is driving at….I do NOT think anyone should own this many housing units.
I do NOT know how many people in this family are invested in this one company, but my guess would be that each investor would still own several hundred each (if divided evenly among investors). I also do not know if this family also has other rental investment companies under a different name.
Housing costs are driven higher if mega investor groups buy up so much real estate.
That’s my point.
Here is an exerpt:
The Nijjar family and their related companies own and manage over 22,000 rental housing units statewide, primarily in low-income neighborhoods in Los Angeles, Riverside, San Bernardino, and Kern Counties but also spanning up to Sacramento and San Joaquin Counties.