More Over-Asking Sales in Early 2021

It seems everyone knows the current pandemic-fueled real estate market is hot. Spring has sprung in a major way.

The market feels inflationary. Sellers price their homes to get the most they can - and get more.

So, how hot is early 2021 so far?

We took a quick look at the most recent sales data and drew some comparisons.

First, however hot you want to rate 2021, the fact is, most homes have sold under their asking prices.

That was the case with more than half, or 56%, of the homes closing from Feb. 1-April 20 this year. (We chose the date range to exclude sales closing in January, which tend to reflect deals made at an off time of year, late 2020 in this case.)

But our real focus is on that big green slice of pie: 28% of homes closing in this period sold over asking. This is on the basis of 97 sales that closed during the period.

We'll draw some comparisons in a bit.

We did want to see how much over asking these over-asking sales are going. And here you go:

It's a fairly even spread, the way we're presenting it, breaking out the first 5-6 percentage points individually.

There were 20 of the 27 over-asking sales that closed 5% or less above the asking price.

Equal numbers of sales were 2-4% over asking, and similar numbers were 0-1, 1% or 5% over.

There were 7 total sales of 6% or greater, with 3 that went 10% or more higher.

Now, we won't ask "what's normal?"

This year "feels" hotter and over-asking sales "feel" more common, but compared to what?

We looked back at the most recent "hot" Spring to make our first comparison. Here's 2017 for you, same period of time (Feb. 1-April 20):

That year was the most recent big inflationary Spring, a bit surprising at the time, because Fall 2016 had lots of malaise in the air.

Still, 2021 sales were much more likely to be over asking than 2017's early Spring sales.

Just 21% were over asking 4 years ago, compared to 28% this year.

And while asking-price sales were about the same, under-asking sales were 6% more common in 2017, with nearly two-thirds of sales closing under (62%).

OK, so 2021 is hotter, by this measure, than 2017 was. Where else can we draw a comparison?

We looked back to 2006, definitely a hot market. Turns out, 2021 has a higher share of over-asking sales than that year.

So we dialed back one more year to 2005, and found data that were slightly better:

You can say "wow."

Not even half the homes sold in this period in 2005 sold under asking (47%).

Nearly a third (32%) sold over asking.

That means 2005 was, by this measure, somewhat hotter than 2021.

But you see that we really had to look to find data that seemed "better" than this year so far.

Now, we did not look at all the data for every single year from 2005-21, just the likely suspects. So we can't say it definitively with data, but it surely seems that this early Spring is the hottest in 16 years, with more over-asking sales than years in between.

We just did a quick check on our own data from the Edge real estate office.

From a quick sample of our 10 most recent deals (listings and purchases, some still in escrow), we have 6 over asking, 2 at asking and 2 under asking.

Both of the under-asking deals, as it happens, are cases where we're representing the buyers. So, yes, it is possible to do a little better than asking, sometimes.

Even if 2021 is among the hottest in 16 years.