Housing supply is tight in most cities across the United States, but that does not mean that every market is a seller’s market.
Today’s homebuyers are a finicky lot and a mortgage-dependent lot and a confidence-lacking lot; they may want to buy a house, but they’re not as willing to be as “house poor” as they might have been in the past. That is why it is more important than ever today, as both a buyer and a seller, to know your market well and know its housing value even better.
Less than a third of U.S. housing markets are seeing homes sell for above asking price, 60 percent are still seeing homes sell for below and about 14 percent are seeing homes go at market value, according to RealtyTrac, a real estate sales and analytics company. At the same time, a larger-than-normal percentage of sales are being done all in cash, which increases competition even in markets where home prices are not soaring ever higher.
As always in real estate, sellers need to know what the market will pay, and buyers need to make smart bids. In today’s market, those truths are more acute than ever, as an increasing number of buyers compete for a dwindling number of listings. Even in a tight market, some homes will sit if not priced correctly.
So where are sellers in the driver’s seat? No surprise, the Bay Area of California, where homes are selling for 108 percent of asking price on average, according to RealtyTrac. Sellers are also getting more than asking in Washington, D.C., Winston-Salem, North Carolina, and Cass County, North Dakota.
Buyers are more in control in St. Louis, Baltimore, Pittsburgh, Atlanta and Burlington, Vermont. Sellers are getting around 80 percent of asking price in these markets, even though supplies of listings are still limited.
Where are the stakes even between buyer and seller? Raleigh, North Carolina, the D.C. suburbs in Montgomery County, Maryland, Riverside County, California and the Phoenix metropolitan area.
Home price gains have been accelerating nationally for the past several months, thanks to tight supply and still-low mortgage rates; builders are still operating below a normal pace, and a lot of potential sellers are still reluctant to list, as they fear they will find nothing they like or can afford to buy.
Should mortgage rates move higher, as some expect, the dynamics in all of these markets could shift dramatically. For now, though, it is good to know as much as possible about your market’s value, and even better to know when to walk away.