Despite a general cooling of the U.S. housing market, a significant portion of homes continue to sell above their asking price, driven by buyer demand for properties in move-in ready condition and desirable neighborhoods. Data from Redfin indicates that 25.9 percent of recent home sales exceeded the asking price, a slight increase from 25 percent a year prior.
This trend contrasts with the broader market where new listings have risen, and pending home sales have declined. The increase in available homes and a dip in demand have shifted power towards buyers, leading to price reductions on many properties. However, homes that meet specific criteria still trigger bidding wars.
Redfin agents define a move-in ready, or 'turnkey,' home as one requiring no immediate major repairs or renovations. This includes functional essential systems like HVAC, plumbing, and electrical, as well as good condition of appliances and finishes. Alongside this, a desirable location is characterized by strong neighborhood appeal, convenience, and perceived long-term value. Factors such as good schools, low crime rates, walkability, proximity to parks and amenities, and convenient commuting options contribute to a location's attractiveness.
The appeal of turn-key properties is amplified by high borrowing costs. The average 30-year fixed mortgage rate hovered around 6.66 percent in late August, with the typical monthly mortgage payment reaching $2,592, a marginal increase from the previous year. For many buyers, the prospect of avoiding immediate renovation expenses makes pristine homes worth the premium.
Geographically, some metropolitan areas are experiencing stronger price growth than others. San Francisco leads with a 9 percent year-over-year increase in median sale prices, followed by West Palm Beach at 8.1 percent. Cincinnati saw a 7.8 percent rise, while Milwaukee and Pittsburgh each recorded 7.4 percent increases. These areas may benefit from a combination of desirable locations and a limited supply of move-in ready homes.
Conversely, markets like Austin and Seattle have seen median sale prices decline, with Austin down 7.1 percent and Seattle down 6.2 percent year over year. Redfin Chief Economist Daryl Fairweather attributes these declines to an oversupply of sellers, particularly in the Sun Belt where new construction boomed during the pandemic, combined with high property taxes and insurance costs on top of elevated mortgage rates. In contrast, Midwest and Northeast markets, such as Cincinnati and Rochester, may have more buyers and fewer sellers due to affordability and less new construction.
Nationally, the median U.S. sale price was $398,632, a 2.2 percent increase from the previous year. However, the median asking price saw a slight decrease, and nearly 21 percent of listings had undergone price reductions. The typical property now takes 45 days to sell, though 30.4 percent still sell within two weeks.
While overall buyer interest, measured by online searches, has cooled, competition for the right property persists. For sellers, the data suggests that simply listing a home is no longer a guarantee of multiple offers. Properties that are well-maintained and situated in highly sought-after locations, however, continue to defy the market slowdown and attract significant buyer interest.