The number of homes that sold for more than $500,000 over the asking price doubled in the second quarter of 2021 compared to the first quarter. Zillow says the number of homes selling for significantly higher than the listing price rose rapidly in the second quarter, with 60% more homes going for more than $1 million over the original asking price compared to the first quarter. The top regions where these homes go for significantly more than the listing price are San Francisco and Buffalo, NY. In San Francisco, 7.5% of the homes sold were offered 30% more than the asking price.
It’s followed by the hot market of Buffalo, NY, where 6.7% of homes sold for more than 30% over list, and Austin (5.5%). All shares are up substantially over the first quarter.
The markets with the most homes sold for half a million or more over asking in the second quarter are San Francisco (664), San Jose (296), Los Angeles (136), Seattle (102) and Miami (102).
Interest rates that have trended down since mid-2018 are a major driver of demand, lowering the total cost of a home and giving home shoppers additional buying power. Record-high home price appreciation seen over the last year, paired with the ability for many to work from anywhere, has given sellers more money to invest in their next home, along with additional options for location.
Relentless demand for houses and supply that failed to keep up drove competition for many houses into new territory, especially in hot markets. However, the market’s runaway growth is showing signs of slowing. Inventory halted its long downward slide and has grown for the last few months, which should translate into reduced competition.