Forty-one percent of buyers surveyed by Redfin said today's low inventory caused them to consider paying more for a home in the second quarter of 2013. This is up from 34% of survey respondents in the first quarter and 26% in the fourth quarter of 2012.
As someone who was looking to buy a home in this crazy North Texas market where prices continue to appreciate, I can attest to feeling the need to offer over list price. In fact, on the second home my husband and I put an offer on, we offered nearly $4,000 more than the original listing price of $214,000. This was only to find out that the home ended up selling for $225,000… another $5,000 on top of our offer.
But what about the markets where prices are still depreciating?
According to the April Trulia Price Monitor, Honolulu, HI, New York, NY and Rochester, NY, also saw a decrease in the seasonally adjusted asking prices year-over-year. So are offers going in above listing price in these markets as well?
Patrick Hastings, a broker/associate at RE/MAX Plus in Rochester, NY, says the market is surprisingly stable.
Hastings said buyers are still going over the listing price on homes from time to time in multiple offer situations. In the good neighborhoods, there is still pent up demand, says Hastings.
Patti West, an agent in Manhattan, said she is definitely still seeing offers come in at or above listing price.
It depends on the property, West said, because there are so many variables: how it’s priced to begin with, if it’s priced right to begin with, etc.
There are some who still try to negotiate, but it depends on what the property is. For instance, condos are a bit more money, so they’re going in at asking or above listing price, while co-ops are a little bit more negotiable, according to West.
So it seems that even in markets that are still depreciating, demand remains high. This only raises the question: at what point will that depreciation turn into appreciation? We’re going to guess soon.