42% of Hartford County single-family sales closed for more than asking price in 2020 according to SmartMLS. An additional 12% of sales closed at the asking price. Note that these stats exclude new construction listings since they work differently than resale listings.
Regular readers are fully aware that the real estate market favored sellers in 2020, and continues to favor sellers in 2021. Our analysis of closed prices found that less than half of last year’s deals closed below asking. This result shows that the market’s strength was not limited to certain price bands or towns, but was widely distributed throughout the County.
The obvious follow-up question – how much over asking did buyers pay last year? To investigate this question I focused on the median and maximum amounts that buyers paid over the asking price. The chart below shows those metrics for each town in the County.
Towns with higher percentages of over asking bids tended to have higher median over asking bids, which makes sense. Every town but Windsor Locks saw a buyer bid $30,000 over asking, and most towns had at least one deal close $40,000 over asking. Needless to say, it was a very competitive environment in 2020.
Looking forward, the upward pressure on prices may not result in an even higher percentage of over asking deals in 2021.
Asking price is strategically set by the seller, and there are different approaches. Some prefer to set the asking price on the low end in order to generate the most interest possible and try to instigate a bidding war. Other sellers prefer to set a very high asking price to see if they can get a bite – it only takes one buyer to sell a house. With the widespread understanding that 2021 is a seller’s market, we expect to see more and more listings with aggressively high asking prices.
Ironically, the very strong real estate market created much more price uncertainty than the steady markets Greater Hartford experienced through 2019. And that continues into the foreseeable future.
If asking price is not a reliable measure of what the seller thinks their home is worth, buyers have to be more thoughtful in order to write a competitive offer on a home. Some properties need a bid dramatically over asking in order to have a chance. In other cases it is very appropriate to bid under the asking price and still expect to have a shot at winning the home.
We’re here to help both buyers and sellers navigate this challenging market.
We are active agents who have our finger on the market’s pulse through our work with both buyer and seller clients. Additionally, we’ve been analyzing and reporting on the market from a quantitative point of view for more than 10 years. We never spout cliches or pre-packaged talking points we got from someone else. Instead, we’ve put in the effort to understand all aspects of the market, forming our own views and opinions. Our clients benefit from the original analytical work we do regarding the overall market and their particular situations.
If you’re wondering where to start in this market – as a seller or a buyer or both – then please reach out. We’re happy to listen to your goals and suggest some options to help you take your next step in the real estate market.