Ten years after the financial crisis, the national CoreLogic Home Price Index (HPI®) has exceeded its pre-crisis peak and continues to grow but at a slower pace. With home prices reaching many homebuyers’ budget limits, the share of homes selling at or above list price has returned to normal levels.
Figure 1 shows the share of homes that sold at a price above, equal to or below the list price. The share of homes selling at or above list price has returned to early 2000 levels. In Q2 2018 that share peaked at more than 40% of total sales – almost triple the level during the trough in January 2008. As annual home price growth started to slow in Q3 2018, the share of home buyers able to negotiate a better price began to rise. As of March 2019, the share of homes that were sold at or above list price has fallen to 31.1% -- about the same level as in 2000 and 2001.
Housing markets are different across the nation and sales and listing patterns vary geographically. Figure 2 shows the share of homes that sold at, above, or below their list prices in 20 Core Based Statistical Areas (CBSAs) during March 2019. San Francisco had the largest share of homes – 69% – that sold for at least the list price. Washington, D.C., and Minneapolis followed with 50% and 48% selling for the list price or more, respectively. Chicago and Miami had the lowest share – 21% and 14% – of homes selling at or above the list price in March 2019. San Francisco’s 2.3 months of supply in March 2019 was among the lowest in the nation and about half of the national level. At the other extreme, Miami had 11 months of supply this March, with only 14% of homes selling for at least the list price.
Price pressures rapidly increase as supply drops below 3 months. Figure 3 shows the price premium or discount and months’ supply for over 300 CBSAs in March 2018. In San Francisco, where months’ supply was at 2.3, homebuyers had to pay 4.6% more than the asking price on average. On the other hand, markets like Miami, where the months’ supply was relatively high at 10.9, homebuyers were able to negotiate below asking prices, with average discounts of 7.8% this March.
Note: The U.S. statistics are based on data for 51 CBSAs. Each of these metros has at least 50% coverage since 2000. CoreLogic MLS data coverage usually increases over time, which might also contribute to inventory increases.
 Figures 1 and 2 use 51 Core Based Statistical Areas to aggregate national level statistics. The inventory has not been adjusted for growth in the number of households over time. As the number of households increases over time, the ‘equivalent’ level of inventory should rise as well.
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