Looks like the market’s broken (yet another) record. This time, it’s for the number of homes selling over their listing price. According to a new report by Redfin, 36% of homes sold last month went for more than their asking price. That’s the largest share on record. The national median home sale price rose 14.4% year over year, the largest increase since June 2013.
Are we in a bubble? Not according to Redfin’s chief economist Daryl Fairweather. She does, however, say that some buyers are overpaying.
“Even though the market feels reminiscent of 2006, we aren’t in a bubble,” Fairweather said. “Yes, some buyers are overpaying for homes, particularly those who are moving to affordable destinations and paying well over asking prices to win homes in bidding wars. But these buyers are often covering any shortfall in the bank’s appraisal amount and locking in low monthly mortgage payments that they can easily afford. As mortgage rates rise, I expect demand to settle down and be better balanced by more new listings as high home prices lure more sellers to the market.”
Last month, closed home sales were up 5% from a year earlier, pending sales were up 21% and new listings fell 16%, the second-largest decline since Redfin began collecting data in 2012. The largest decline was in April 2020.
“This is the strongest seller’s market since at least 2006,” said Redfin’s chief economist Daryl Fairweather. “Buyers outnumber sellers by such a huge margin that many homeowners are staying put because they know how hard it would be to find a place to move to. It seems like the only move-up buyers who are confident enough to list their homes are those who are relocating to a more affordable area where they’ll have an edge on the local competition.”
Median sales prices increased from a year earlier in all but one of the 85 largest metros that Redfin tracks. Who’s the outlier? San Francisco, where prices stayed flat from a year ago. The top 3 metros with the largest gains were on the east coast: Bridgeport, Connecticut (up 31%), New Haven, Connecticut (up 31%) and Camden, New Jersey (up 24%).
Redfin’s full report, which includes graphs and additional metro-level data highlights, is available at https://www.redfin.com/news/record-share-of-homes-sold-over-list-in-february/.