A Strong Percentage of Homes Are Selling Above Asking Price

In January, 2021, over 56% of homes statewide sold over the asking price.  This is according to a Southern California April presentation by a California Association of Realtors economist as shown in the slides to the right.

The over-asking statistics may vary in areas, so for example, in a combined look at 180 sales of condos and houses between 4/8 and 4/15 in the 10 cities of Bellflower, Cypress, Harbor City, Long Beach, Carson, Torrance, Lakewood, Lomita, San Pedro, and Signal Hill*:

71% (approx.) or 127 homes out of 180 sold over asking.  

7% (approx.) or 12 homes sold at original list price.

19% (approx.) or 35 homes sold under original list price.

In lower prices starting at $300,000, the increase may be $900 to $15,000; in the $500,000 range the increase in closing price grew in some cases to over $50,000 higher, and in the $1,000,000+ category it may $150,000 higher.  However, one single family home listed in Long Beach for $595,000 recently closed at $700,000. 

For sellers such overbids may help them more easily into their next purchase, but for the huge number of first time buyers looking for opportunity with very low interest rates, there is much frustration. On many properties, multiple offers abound, often 15-20 offers from which the seller may pick, sometimes outright, sometimes countering back to a select group of buyers.

In a March 2021 Google Consumer poll, 64% of sellers thought it was a good time to  sell, while 28% of buyers thought it was a good time to buy. In 2020 however, 44% of buyers had more than a 20% down payment, and obviously many of them have the ability to bid some much higher prices to beat out the competition.  This leads to another issue:  appraisals.  Not all overbid prices are appraising, leading buyers to come up with more money, and how some are doing this is detailed in this article about the appraisal gap.

Who's not buying so much? Rental property investors, as COVID issues came to the frontline.

What will make the situation easier in the future?  Rising interest rates, more housing inventory, and an ongoing improving economy.
 

*as reported in CRMLS 

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996