Nationwide, 5,897 homes sold for at least $100,000 over asking price at the beginning of this year, up from 2,241 during the same period last year, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
This is according to a Redfin analysis of sale prices versus list prices in the 50 most populous U.S. metros from Jan. 1, 2022 through Feb. 15, 2022, compared with the same period last year.
Homebuyers are paying up in an effort to beat other bidders competing for the few homes on the market. January was the most competitive month on record, with 70% of home offers written by Redfin agents facing bidding wars (adjusted for seasonality). Partly as a result of fierce competition, the median home-sale price rose 14% year over year to $376,200, just shy of the all-time high.
Many buyers of homes that closed in the beginning of 2022 were rushing to take advantage of 3.1% December mortgage rates before they started to rise. The average 30-year rate was 3.76% for the week ending March 3, down from the February peak but still substantially higher than the record lows reached last year.
“The housing market was in a frenzy in the beginning of 2022, with buyers competing for a limited supply of homes and sellers reaping the rewards of bid-up prices,” said Redfin Deputy Chief Economist Taylor Marr. “Buyers are likely to face strong competition at least through the next few months as demand is buoyed by the temporary drop in mortgage rates fueled by the Russian invasion of Ukraine. But bidding wars may ease a bit by summer as more new listings come on the market and mortgage rates resume their rise. Homes are still likely to sell above list price, but the premiums will probably be lower.”
Pricey California metros top the list of places where homes are selling six figures above asking price
Six of the top 10 metros where homes are selling for six figures above list price are in California. The Los Angeles metro area led the way, with 718 homes selling for at least $100,000 over asking price, more than any other major metro and up from 273 a year ago. Los Angeles was followed by Oakland (580). Next came San Jose (490), Seattle (488), Anaheim (365), San Francisco (335), San Diego (323), Boston (158), Denver (125) and New York (109).
Los Angeles has the most homes selling for substantially above list price partly because it’s so pricey, and partly because it has more home sales than almost all other major metros. Home prices rose 15% year over year in January to a median of $825,000, making it the second-most expensive place in the country to buy a home, after the Bay Area. The rest of the top 10 are also expensive compared to the U.S. as a whole.
“On top of a lack of homes for sale, which makes everything a hot commodity, buyers are just plain eager,” said Los Angeles Redfin agent Sylva Khayalian. “They’re anxious to purchase a home ASAP because as rates rise, they won’t be able to afford the homes they’re looking at now and they’ll soon have to drop into a lower price range. People are willing to bid up home prices because they want to be done with their search.”
To view the full report, including a full metro-level breakdown, please visit: https://www.redfin.com/news/homes-sold-above-asking-price-2022/
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country’s #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.
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