Home sellers have had a windfall in 2017 with buyers paying more than the list price on 24.1 percent of home sales during the year according to a report by real estate website Zillow. The report said that approximately one in four U.S. homes sold above the asking price as a combination of factors led to sellers netting an average of additional $7,000 over their initial price over.
The report indicated that the share of homes selling above list price has grown considerably since the beginning of the housing recovery in 2012 when slightly more than one in six home sales closed above asking price. This share of homes selling above their asking price has risen every year in the past three years. The typical price increase for homes that sold above the listed price was 3.1 percent in 2017.
Low mortgage rates, limited supply and high demand, demographic shifts, and a strong economy were some of the factors that have led to this surge in prices, the report said. Additionally, a shortage of home inventory, especially at the entry level and a growing demographic of young first-time buyers looking to start families have also been responsible for this kind of a market.
Cities where the lucrative tech market is booming were more likely than others to see this trend, according to the report. More than half the sellers in San Jose, San Francisco, Salt Lake City, Seattle, and Provo sold their homes for more than their asking price.
The report indicated that in each of these markets, on an average, sellers made at least an additional of $20,000 over their initial asking price. The largest difference in asking price and what a house sold for was found in San Jose, where the average home sold above list netted sellers an additional $62,000.