More homes are selling for less than their list price
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As the housing market tipped in favor of buyers, the gap between list prices and sale prices both for accurately-priced and overpriced listings continues to widen.
This is taking a toll on both cool and hot markets, according to the data from Knock’s Deals Forecast, which determined the markets that have the highest percentage of homes that will sell below asking price.
For example, the newest S&P CoreLogic Case-Shiller Indices cited Phoenix as one of the top cities in terms of year-over-year price gains. However, it was also one of the top 10 markets on Knock’s Q2 forecast predicted to sell below original list prices.
In the first quarter of 2019, Knock reported that 73% of homes sold below original list prices, and 56% sold at a discount of 2% to 5% over Q1 2018. The continuing trend of home overpricing could lead to extended days on the market and create a stigma around the property, according to the report.
Worse, it could “erode their perceived value” and lead to bigger savings for buyers.
In the first quarter of 2018, 34% of Phoenix homes sold had been on the market for at least two months. Ninety-two percent of these homes sold below their original list prices, compared to 73% of the overall market – sparing as much as $12,500 or more on a $250,000 home.
"As the cooling of the market starts moving west, Phoenix is just one example of how the combined effects of a shift to a buyer's market and continued overpricing will take their toll in the form of more savings for home buyers," said Knock economic advisor Paul Habibi. "Given the accuracy of the Q1 National Knock Deals Forecast, buyers who have been challenged by affordability can look to these predictions for insights into how a home purchase might be possible for them this spring homebuying season."
