If you’re in the market for a home in North Texas, be ready to pay the price – and then some. According to new data released by Zillow, nearly 40 percent of the Dallas area homes sold last year went for more than the asking price. Houston, on the other hand, had 33 percent of homes sell above list price in 2017, a mere one percent increase from 2016.
Nationwide, buyers paid more than list price on 24.1 percent of home sales in 2017. There’s been a massive increase since the beginning of the housing recovery in 2012, when just slightly more than one in six houses closed above asking price.
While considerably higher than the national average, the share of Dallas homes sold above their listing price in 2017 was the same as it was in 2016 and 2015.
In a handful of markets, more than half of home sales closed above list price. San Jose (68.5 percent), San Francisco (64.5 percent), Salt Lake City (55.4 percent), Seattle (52.4 percent) and Provo, Utah (51.1 percent) had the most competitive housing markets in 2017. In all of these markets, buyers paid at least $20,000 more than list price on average, and often more. Buyers in San Jose paid a whopping $62,000 above list price on average – the largest difference between list price and sale price in the 100 metros analyzed in Zillow’s study.
Dallas buyers were more conservative with their overspending, paying $12,023 more than list price on average.
The trend is driven by a combination of factors, including limited supply and high demand and favorable financing conditions. Low mortgage interest rates have given buyers budgets a boost, making them more apt to pay over list price to secure a home.
While the nation is experiencing widespread competition in the housing market, the old rules of home buying — where the list price is a jumping off point for negotiations in the buyer’s favor — still apply. More than two-thirds of the overall house sales in the United States in 2017 still went for less than what was asked.