The share of homes sold above asking price declined each month in the second half of 2018…
The share of homes sold above asking price declined each month in the second half of 2018 – and December saw the biggest month-over-month drop since at least 2012 – another sign of the slowing housing market, according to online real estate company Zillow.
Nineteen percent of home sales in the U.S. went for above asking in December, down from 21 percent in November and a peak of 24 percent in May.
While lower than the highs of this spring, the level remains above the 17-percent range from 2014.
This downward trend in December was widespread: Eight of the 10 largest markets in the U.S. experienced a drop from November levels – Philadelphia and Washington, D.C., were the exceptions.
Among the largest 35 markets, 27 saw a downtick in the share of homes that sold above list.
Despite the slowdown during the back half of the year, the annual share of homes sold above list price still trended upward for the fourth consecutive year, though the pace is slowing.
Nationally, 23.5 percent of homes sold above list price in 2018 compared to 22.7 percent in 2017. The median amount above asking that sellers realized fell from $7,000 to $6,830.
2018 Was an Inflection Point in the Housing Market
“Last year marked an inflection point in the housing market. The first half of 2018 looked a lot like the previous three years with sellers firmly in control of the market and buyers outbidding each other for scarce inventory, pushing up prices,” said Zillow senior economist Aaron Terrazas. “But something shifted mid-summer. Sellers sitting on the sidelines joined in, increasing inventory.”
Terrazas said, “The balance of power began to swing marginally back toward buyers – particularly in higher-priced communities – during the second half of the year, an unfamiliar chill after several years of frenzied activity.”
“With mortgage rates now back down, early data from the first month of 2019 suggest that it is still premature to call it a buyer’s market. But more than any time in recent memory, it is important for sellers to be thoughtful in their listing strategy. Buyers are out there, but they’re no longer fighting each other tooth and nail to get in the door,” Terrazas said.
Perhaps 2019 will be a “buyer’s market” for homes. Whether it is or isn’t will have to do with the health of the larger economy.