The number of homes selling at or above list price is on the decline, returning to historical norms, according to CoreLogic’s Home Price Index. That could be a relief to home shoppers whose budgets have been squeezed in recent years as home prices have soared.
The share of homes that sold at or above list price dropped to 31.1% in March—about the same level as in 2000 and 2001. That also represents a big change from a year ago. In the second quarter of 2018, the share of homes selling at or above list price peaked at more than 40% of total sales—nearly triple that of 2008. “As annual home price growth started to slow in the third quarter of 2018, the share of home buyers able to negotiate a better price began to rise,” CoreLogic researchers note.
But there is variation geographically. Sixty-nine percent of homes sold for at least the list price in San Francisco, which had the largest share of such homes, followed by Washington, D.C., at 50% and Minneapolis at 48%, according to CoreLogic. On the other hand, Chicago and Miami had the lowest share of homes that sold at or above the list price: 21% and 14%, respectively.
“Price pressures rapidly increase as supply drops below three months,” CoreLogic notes. In San Francisco, for example, the supply of homes for sale was at 2.3 months, and home buyers there paid an average 4.6% more than asking price. However, in markets like Miami, where the supply of homes was 10.9 months, home buyers had more negotiating power and saw average discounts of 7.8% in March.