After years of red-hot bidding wars in many markets, the share of homes sold for above their list price shrank significantly in 2019, according to a recent Zillow analysis.
Around 19.9% of US homes sold for more than their asking price, dropping from 21.5% due to a slower pace of home value growth throughout 2019. The decline marked broke a streak of four straight years in which a greater share of homes sold above list price as the market picked up steam.
"Many sellers were caught off-guard by the changing conditions, and ended up accepting offers at or below list prices that were dreamed up during the height of the frenzy," Zillow economist Jeff Tucker said. “But the cloudy outlook for sellers began to clear late in the year after inventory buildups in several cities were whittled back down to record lows, suggesting a hot spring sellers' market is around the corner.”
Sellers gained a median of $5,100 above asking, down from $5,500 in 2018 and the lowest since at least 2011. Due to intense competition among buyers the and steep price of real estate, homes in San Jose and San Francisco sold for $41,000 and $37,500 above asking, respectively.
However, these figures are significantly lower than a year ago, when a San Jose home typically sold for $101,000 above asking, and those in San Francisco sold for $50,000 above asking.
San Francisco topped the list of metros with the largest share of homes sold above list with 48.6%. San Jose (38.8%), Boston (34.7%), Minneapolis-St. Paul (34.3%), and Seattle (31.2%) followed. Meanwhile, the coolest markets were Miami (8.9%), Las Vegas (12.6%), and Tampa (13.3%).
“Sellers hoping to cash in and upgrade should proceed with care, however, as the same tight conditions that may drive up their sale price will be facing them on the other side when they look to buy their next home,” Tucker said.