In June, a third of homes sold above their list prices, according to Jim Bianco, president and macro Strategist at Bianco Research, LLC. He warns that this suggests that real estate brokers are having a hard time figuring out the post-pandemic market.
The trend of homes selling for over their list prices peaked in March last year, with nearly 54% of homes selling above list prices. This metric fell to 27% in January, but it now moving up again, with June showing 33%.
Bianco noted that in June, the average home sold for 99.5% of its list price, coming from a low of 98.7% in January, but still higher than any other time before the pandemic. The median sale price per square foot is also moving upwards, registering $226 in June.
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The strategist says that these figures suggest that homes are being priced too low.
“Much like the labor market (remote work), housing has changed in ways we are still trying to figure out,” Bianco concluded.
A recent report from brokerage firm RedFin showed a similar increase in homes selling for more than their list prices. They found that 36.8% of homes sold above their final list price — the highest share in 10 months.
But RedFin puts the finger on buyer interest and a decline in supply. They found that the high demand for homes continues to outpace the number of available homes in many markets. The current active listings have decreased by more than 11% year-over-year, the most significant decline since April 2022.
This lack of housing supply is driving up home prices, as almost every home is receiving multiple offers and selling above the asking price. Redfin reported an 11% increase in requests for home tours and other homebuying services compared to the previous year. Additionally, the number of home tours taken rose by 6% compared to the beginning of 2023.
As for the inventory shortfall, experts attribute part of it to homeowners who took advantage of historically low mortgage rates, around 3% or lower, when they purchased or refinanced their homes. With current mortgage rates now averaging close to 7% or even higher, many homeowners feel hesitant to sell their properties and buy another one at a much higher rate.
As a result of this limited supply, home prices have remained relatively high, with the current median home sales price standing at $383,800. This figure is only $1,000 lower than the peak median price recorded in May 2022. Newly-listed homes are even more expensive, with a median asking price of $395,725.
All in all, prospective buyers might need to wait out a little longer.
Information for this story was found via Twitter, RedFin, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
