Knock predicts that more homes will sell below their asking price
More than half of US homes sold below their listing price in the second quarter of 2019 a trend that could continue in the next quarter, according to a recent report from home trade-in firm Knock.
The report found that 61.52% of sellers sold their homes at a discounted price as the spring home-buying season shifted towards a cooler market in favor of buyers.
“But as the market slows heading into the second half of the summer when families want to be settling in for the new school year, less inventory will mean increased competition for buyers,” said Sean Black, co-founder and chief executive officer of Knock.
Last month, 50% of homes sold within 1.7% of Knock’s predicted final sale price, while 70% sold within 2.8% of the anticipated sale price. In the third quarter, the company projected that 65.4% of listings nationwide would sell below their original prices with an expected average discount of 3.13%.
“While we’re not necessarily seeing the same jump in homes selling below original list prices that we forecasted going into Q2, the good news is that there has been a steady drop in homes selling above their original list prices,” said Jamie Glenn, co-founder and chief operations officer of Knock. “Buyers are being more cautious, which is forcing sellers to price their homes more realistically. Of course, lower prices combined with seasonality may lead to less inventory, but I think we’ll see buyers being less hasty to pay over market value regardless of availability.”
The top 10 cities with the highest discounts include:
- Miami (5.57% predicted discount)
- St. Louis (4.85% predicted discount)
- New Orleans (4.68% predicted discount)
- Pittsburg (4.62% predicted discount)
- Chicago (4.44% predicted discount)
- Jacksonville (4.19% predicted discount)
- Hartford (4.10% predicted discount)
- Houston (4.01% predicted discount)
- Tampa (3.97% predicted discount)
- New York (3.91% predicted discount)
“Between decelerating home price increases, mixed reports on inventory and sales, and lower mortgage rates, conversations about the housing market have been somewhat uncertain over the past several months,” Knock Economic Advisor Paul Habibi said. “However this ping-ponging could just be reflective of the market finding its balance, as further evidenced by the reduced instances of homes selling above list prices and geographic variation in the rate of deals reported in this latest National Knock Deals Forecast.”
