As expected, this year’s showing stats are now soaring over last year, when the pandemic shut-down started. Showings are also well ahead of 2019, will be interesting to see how they intertwine as the year progresses.
New and coming soon listings continue to grow, as pending sales continue their upward climb amid intense competition. In the words of everyone I talk to, “it’s insane out there”!
With multiple offers the norm for so many homes as soon as they hit the market, the whole mentality for price has changed. Most of the time you no longer negotiate down from list price… now most offers are significantly above list price. It varies by neighborhood so look at list-to-sale price of recent solds in the neighborhood where you are buying to get a feel for where prices may land if you are submitting an offer. It’s frustrating because it can feel like a sealed bid auction where you don’t know the other bids!
This isn’t just a local phenomenon… quote below from an article below in REALTOR Magazine…
“Fifteen offers, 25 offers, we even had one last week with 97 offers—and the list price is the starting point,” Mark Wolfe, broker-owner of RE/MAX DFW Associates, told the Dallas Business Journal. “An agent in our firm received 17 offers on a property before they cut off receiving additional offers. Twelve of the offers were cash, all above list, and most buyers not even seeing the home. They are just grabbing.”
Read what the post below from our blog at Keeping Current Matters says about it nationally.
Why You Should Think About Listing Prices Like an Auction’s Reserve Price
For generations, the homebuying process never really changed. The seller would try to estimate the market value of the home and tack on a little extra to give themselves some negotiating room. That figure would become the listing price of the house. Buyers would then try to determine how much less than the full price they could offer and still get the home. The asking price was generally the ceiling of the negotiation. The actual sales price would almost always be somewhat lower than the list price. It was unthinkable to pay more than what the seller was asking.
Today is different.
The record-low supply of homes for sale coupled with very strong buyer demand is leading to a rise in bidding wars on many homes. Because of this, homes today often sell for more than the list price. In some cases, they sell for a lot more.
According to the Home Buyers and Sellers Generational Trends report just released by the National Association of Realtors (NAR), 45% of buyers paid full price or more.
You may need to change the way you look at the asking price of a home.
In this market, you likely can’t shop for a home with the old-school mentality of refusing to pay full price or more for a house.
Because of the shortage of inventory of houses for sale, many homes are actually being offered in an auction-like atmosphere in which the highest bidder wins the home. In an actual auction, the seller of an item agrees to take the highest bid, and many sellers set a reserve price on the item they’re selling. A reserve price is the minimum amount a seller will accept as the winning bid.
When navigating a competitive housing market, think of the list price of the house as the reserve price at an auction. It’s the minimum the seller will accept in many cases. Today, the asking price is often becoming the floor of the negotiation rather than the ceiling. Therefore, if you really love a home, know that it may ultimately sell for more than the sellers are asking. So, as you’re navigating the homebuying process, make sure you know your budget, know what you can afford, and work with a trusted advisor who can help you make all the right moves as you buy a home.
Bottom Line
Someone who’s more familiar with the housing market of the past than that of today may think offering more for a home than the listing price is foolish. However, frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions. Let’s connect so you have the best advice on how to make a competitive offer on a home in our local market.
