Falling demand drops sales above asking for sixth straight month
Without the clashing fervor of potential homebuyers competing, fewer sellers are fetching above-listing prices on their houses, according to Zillow.
The share of sales above list price dipped to 19.4% in December 2018, down month-over-month from 21%. It marks the largest seasonally adjusted monthly decline since 2012.
As a whole, 2018 showed a year-over-year increase, going to 23.5% from 2017's 22.7%. However, after peaking in May at 24%, the share of home sales above asking price fell in each of the last six months of 2018.
"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," Aaron Terrazas, senior economist at Zillow, said in a press release. "But something shifted midsummer. Sellers sitting on the sidelines joined in, increasing inventory."
The top 5% of the market helped drive that share down, as price growth declined more than any other sector. Overall, home value appreciation slowed throughout the country, especially in the expensive coastal markets.
"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," Terrazas continued.
"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."
Of all the housing markets, San Antonio drew the most sales over the asking price during December 2018 with 44.3%. San Francisco was second at 42.6% and Kansas City, Mo., finished third with 42.2%.
December's three bottom housing markets by sales above listing price all came from Florida. Miami-Fort Lauderdale had the lowest share at 8%, Tampa was next at 12.1% followed by Orlando with 12.9%