More than half of all existing homes sold above asking price in May

The ongoing housing inventory crunch in the U.S. has forced numerous home buyers into bidding wars on the few available listings they can find, and as a result, more than half of all existing homes sold for above their list price in the four-week period ending May 23.

That’s according to a survey by Redfin, which said 51% of homes in 400 U.S. metros it looked at sold for more than their owners were asking for. That’s up from 21% of homes one year ago.

Dozens of other sales records were set in the period too. For example, the median home sales price reached $354,250, the highest on record, while the number of days on the market fell to 17, down from 36 days one year ago. Moreover, asking prices reached an average of $361,875, another new record, Redfin said.

The firm also found that in the two-week period ending May 9, 57% of homes that went under contract had accepted an offer within just two weeks of being listed.

Redfin Chief Economist Daryl Fairweather said that new listings and sales generally slow down in late spring, and that prices don’t usually peak until late August.

“The fact that more homes keep selling for more and more above asking prices goes to show that many more people want to buy a home than there are homes for sale,” Fairweather said. “I don’t see that changing until mortgage rates increase, which will likely happen later this year. But until then the housing market will remain red-hot.”

Other findings in the survey showed that for the week ending May 21, purchase applications rose by 2% over the previous week. And for the week ending May 27, 30-year mortgage rates declined slightly to 2.95%.

The company compared the current market conditions with those from the same period in 2019, a year before the COVID-19 pandemic emerged in the U.S. It found that active listings, which is the number of homes listed for sale at any point during the four-week period, were down 49% in 2021 from the same period in 2019.

Redfin said the findings highlight the severe lack of inventory that is afflicting housing markets across the U.S. That shortage has helped to drive up prices nationwide, but so far few buyers have been put off.

Just one metro out of the 400 Redfin studied saw home sales decline on a year-over-year basis. That was Rochester, New York, which saw sales fall by 3%. Everywhere else in the country saw sales grow, with the biggest increases in San Francisco, where sales were up 184%, San Jose, up 150%, and Miami, up 120%.

Redfin said the median home price increased in every single one of the 400 metros it tracks. The largest price gains were seen in Austin, up 42% from a year ago, while Oxnard in California and Miami both saw price gains of 26%. The smallest price appreciation was found in Honolulu, Hawaii, where prices rose just 0.2% compared to the year ago period.