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The latest analysis from Zillow revealed that the share of homes that sold above list continues to rise with persistent buyer demand moving deeper into the year. Sellers are reaping the benefits of record-low interest rates and continuously tightening inventory.
According to Zillow, 22.4% of homes purchased in the U.S. were sold for more than their initial list price in September, up from 20.2% in August and up significantly from the 15% of homes that sold above their listing prices in September 2018 and 2019. The market was off to a later start than usual due to the COVID-19 pandemic and folks are now scrambling to purchase their home before another possible shutdown, as numbers continue to rise once again.
"The housing market is taking us all back to Economics 101 and teaching lessons about supply and demand," said Zillow senior economist Chris Glynn. "A persistent interest in buying and moving is creating an imbalance that is driving prices higher than we typically see at this time of year. In many cases, buyers in this market should be realistic about the chance of bidding wars and leave themselves financial flexibility by looking at homes listed for less than their maximum price point. With tight inventory, low-interest rates, and robust demand from households re-evaluating their housing needs, a strong, competitive market with many transactions is likely here to stay into 2021."
According to the report, bidding wars have been most common for homes priced just above and below the typical U.S. home value of $259,906. Meanwhile, homes priced between $192,001 and $264,000, sold above list in 28.2% of September sales.
Click here to read the full report.