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Buyers, beware: Nearly 40 percent of homes in LA are selling above ask
It is a sign of a tight market and possibly an overheated one
The L.A. metro area housing market is on a tear, with close to 40 percent of homes selling at $14,000 above asking price, according to a recent report from Zillow. It is an indication of heavy demand coupled with a lack of supply, but also potentially an overheated market, experts say.
The figure represents the highest percentage seen since 2013, Curbed reported.
Nationwide, buyers are paying more than the listed price on roughly one quarter of homes. Sellers across the country also net an additional $7,000 on average – roughly half the premium in L.A.
Sellers are often surprised when the interested buyers offer prices well above the listed price, Zillow economist Aaron Terrazas told Curbed. But that doesn’t mean sellers are running to brokers to list their homes. Many fear they won’t be able to afford a better alternative when it’s their turn to purchase.
While the uptick in prices can reflect a strong market, it could also lead to runaway bidding, where amounts don’t accurately portray home values. Experts have said that is already happening in the speculative world of high-end development, where new construction favors the most extravagant property on the block at record-beating prices.
Other markets where sellers are seeing big chunks of extra change include San Jose, San Francisco, Salt Lake City and Seattle. Sellers in these markets profited at least $20,000 over initial ask. [Curbed] – Natalie Hoberman