Eight of the 50 most populous metropolitan areas saw a rise in the share of homes selling for above the original list price in February, and half of those metros are in the Bay Area or New York. That’s according to a new report from Redfin.
In San Francisco, 57.2 percent of homes that sold went for more than their original list price, up 7.5 percentage points from a year earlier. That’s the biggest jump among the top 50 metros. Next came Nassau County, N.Y. (+4.4 ppts), San Jose, Calif. (+3.5 ppts), Milwaukee (+2.7 ppts), San Antonio (+2.4 ppts), New York (+2.2 ppts), Portland, Ore. (+1.4 ppts) and Philadelphia (+0.8 ppts).
Homebuyer demand in the Bay Area and New York slowed considerably during the pandemic as people fled major urban areas, but it has been bouncing back in recent years, according to Redfin.
“The Bay Area has an unending population of people with enormous swaths of money,” Bay Area Redfin Premier real estate agent Josh Felder said in a release. “A decade or so ago, we all thought the growth in home prices was unsustainable, but they just keep going up and up. That’s partly because there aren't enough homes for sale, and partly because tech continues to boom despite ups and downs in the stock market and geopolitical uncertainty.”
Felder said the housing market heated up in February due to pent-up demand, but has lost some momentum in March as buyers hold out for more inventory. The market still feels less active than it did before the pandemic, he added.
“I submitted an offer on a house in a really desirable San Jose neighborhood recently and there were 22 offers. It ended up going for around 10 percent over the asking price, which is commonplace,” Felder said. “But back in 2017 or 2018, it was common for homes in desirable neighborhoods to sell for 15 percent or more over asking, indicating that today’s market is actually somewhat restrained.”
Inventory has started to improve in the Bay Area. Active listings of homes for sale in San Francisco rose 5.8 percent year-over-year in February and climbed a respective 27 percent and 38.7 percent in San Jose and Oakland.
Nationwide, 20.5 percent of homes sold for above their original list price in February, down from 22.8 percent a year earlier. Nearly two-thirds (64.2 percent) sold for less than their original list price, compared with 60.9 percent a year earlier. And 15.4 percent sold for exactly their original list price, compared with 16.3 percent a year earlier and the lowest February share since 2019.
Many homesellers shoot for the moon when pricing their homes and end up getting less money than they hoped for, according to Redfin. That’s increasingly the case now because 2025 is shaping up to be a buyer’s market due to elevated mortgage rates and rising inventory.
There was a brief period during the pandemic homebuying “frenzy” when the share of homes selling above list price “skyrocketed” and was comparable with the share of homes selling below list price: around 40 percent. These figures have now reverted to pre-pandemic norms. Redfin agents in most areas recommended that sellers price their homes fairly if they want to find a buyer quickly.