If you’ve purchased or offered on a home recently, chances are you’ve experienced “sticker shock” at some point. Low supply and high demand are fanning the flames of hotter-than-hot housing markets throughout much of the nation, with February setting records for both the median home sale price and new listing price.
Homes Are Selling for More
The median sale price of houses rose to an all-time high of $328,350, per a recent report from Redfin that examined data from 400 U.S. metros. This is up 17% compared to the year prior and is the most significant increase in home sale price since 2016.
Meanwhile, the median asking price for newly listed homes hit a record-setting $349,975, outpacing 2020’s figures by 10%. And with 17% fewer new listings coming on the market, most sellers are not having trouble finding buyers who are willing to pay top-dollar.
In fact, data from the first week of March show an average 100.1% difference between selling and asking prices nationwide, meaning the typical buyer is paying over list price. This phenomenon is yet another first (since Redfin began recording sale-to-list price data in 2016) and represents a 1.7% increase from this time last year.
“This is the hottest market I’ve ever seen in my 13-plus years in Colorado real estate,” said Aaron Hart, managing broker of 1858 Real Estate. “My team and I are consistently seeing multiple-offer situations $30K to $50K to $100K or more above the asking price in all price ranges, with many offers waiving the appraisal and inspection objections altogether.”
Homes Aren’t Staying on the Market Long
Competition among buyers reached a fever pitch between February and March, as active listings bottomed out, falling 41% to a new record low—the largest decrease to date. Slim pickings, among other factors, resulted in inventory disappearing at record breaking speed. Over half (56%) of home sellers who went under contract accepted an offer within two weeks of listing their property; 44% did so within one week. Last year, this occurred at a rate of 45% and 32%, respectively.
“Sellers’ asking prices have marched upward every week this year. Buyers have learned that if they aren’t aggressive enough one week, they will have to bid higher on a home that’s listed the following week,” said Redfin Chief Economist Daryl Fairweather. “This super competitive housing market has been fueled by rock-bottom mortgage rates, so home prices should start to grow at a slower rate as mortgage rates tick up.”
What will occur in reality remains to be seen. However, data shows a slowdown has yet to take hold. As of March 5, applications for mortgages were up 7% week over week and 2% year over year, despite a slight increase in 30-year loan interest rates compared to the month prior.
To view Redfin’s full report, including charts and methodology, visit: https://www.redfin.com/news/housing-market-sale-to-list-over-100-pct/.