Homes Continue to Sell For More Than List Price
Unusually high demand for homes in central Ohio and a lack of sufficient inventory has resulted in homes selling for more than the asking price for the past couple of years, however, competition for homes on the market is showing signs of lessening, which could provide an opening for home buyers who have been losing out amid this year’s bidding wars.
While three out of every five homes sold in August sold for more than the home was listed for, the number of offers coming in on new listings in central Ohio is declining, and we are starting to see what appears to be the beginnings of a shift in the market.
Tight inventory, and sky high demand lead to fierce competition among buyers with most offering more than the home’s asking price, often including other favorable terms such as: appraisal gap coverage, waiving of the right to request remedy repairs, and inspections all together in many instances. However, over the past 60 days, buyers seem to be more contemplative when considering their offers and how much they’re willing to go over what the home may appraise for.
Still, sellers continue to have the upper hand. The number of listings on the market is increasing but remains low compared with high buyer demand.
Even with the tempering of over list price offers, sellers continue to have the upper hand.
August recorded the highest number of home sales in central Ohio history. The 3,694 sales last month was 9.3 percent higher than one year ago. Year to date (January – August), home sales are 10.3 percent ahead of 2020.
Record high contract signings in August indicate home sales in September will be equally impressive.
The number of listings added to the market last month was almost 12 percent higher than August of 2020, but down almost 13 percent from July.
Fewer homes listed for sale in the fall is not surprising this as kids head back to school and traditionally, the housing market tends to take a breath prior to the start of the holiday season.
However, even with record sales last month, the number of homes still available for sale was 24.4 percent higher than last year, providing buyers with far more options.
Homes Continue to Sell Quickly
The time it took to sell a home remained at 11 days last month.
Homes under $350,000 sold in an average of 9 days. Homes sold between $350,000 and $500,000 took about 10 days to sell. Homes in the $500,000 to $700,000 price range sold in an average of 17 days, and homes over $700,000 were on the market for an average of 28 days.
For the first eight months of 2021, homes have sold in an average of 16 days. Breaking this down by price range, homes under $350,000 sold in an average of 14 days. Homes priced $350,000 -$500,000 took 17 days. Homes between $500,000 and $700,000 took 26 days to sell and homes over $700,000 sold in an average of 38 days.
Average Sales Price Continues to Rise
The average price of a home sold in August was $308,087, up 10.4 percent from August of 2020. The median sale price was up 13.2 percent to $275,000.
Mortgage Interest Rate Remain Low, but are Expected to Rise
Low mortgage rates have motivated home buyers to endure this year’s challenging market and now some buyers are starting to see their persistence pay off,
Low rates continue to fuel home-price increases and with prices high, affordability is tied even more strongly to mortgage rates. Potential buyers starting to hunt for a home should consider what changes in mortgage rates mean for their home shopping budget and work to put a home in contract quickly as interest rates are expected to rise soon. The Fed, has warned that it is preparing to taper its emergency stimulus efforts from the pandemic, including winding down its bond purchases. That is expected to make mortgage rates rise, as well as rates on credit card and car loans.
August 2021 Housing Stats
Here are the numbers (compared to the same month a year ago):
- Closed Transactions – 3,694 – UP 9.3%
- Pending Contracts – 4,386 – UP 4.9%
- Inventory for Sale – 3,418 – UP 24.4%
- New Listings – 4,028 – UP 11.9%
- Days on Market – 11 – DOWN 50.0%
- Average Sales Price – $308,087 – UP 10.4%