The four-bedroom, 3,500-square-foot single-family home boasted high-end appliances, lake views, a great neighborhood and a walk-in pantry.
The West Hartford, Conn., home was listed for sale at $799,000 on May 3. Two days later, the homeowners had picked a buyer from the 17 offers they had received and a sale was pending, according to publicly available information.
“What’s the f—ing point,” one house hunter who was outbid on the home lamented on the social-media platform X. Apparently, the buyer had “paid $400,000 over asking in all cash,” they added.
The aspiring home buyer, who requested anonymity to avoid online harassment, said in an interview that they had learned the eventual buyer had also waived home inspections. The unsuccessful bidder said they had submitted a higher offer and were willing to go even higher, to no avail. They had also been outbid on other homes, which added to their frustration.
In many major metropolitan areas across the U.S., buying a house has become a Herculean task. In spite of mortgage rates exceeding 7%, housing demand continues to outpace supply — fueling intense bidding wars over a small pool of homes listed for sale.
Listing agents may also be pricing homes lower than other comparable homes in the area as part of a deliberate strategy to attract more buyers.
In Essex Fells, N.J., a two-family property was listed for $829,000 in March and sold for $1 million about a month later, according to its listing. The owners had 15 offers, local news outlet NJ.com reported.
Across the country, south of San Francisco in Millbrae, Calif., a three-bedroom single-family home built in 1929 was listed for $1.99 million and sold for $2.7 million, according to its listing. It was on the market for 10 days.
“Bidding wars, and competition in general, might seem out of place in a market with interest rates staying above 7%,” Nicole Bachaud, a senior economist at Zillow, told MarketWatch. “But given the strong demographic trends continuously pushing hopeful potential buyers into the market, without a significant increase in inventory, competition will remain.”
Nationwide, about 27% of homes for sale were sold over asking price in February, according to Zillow data. That’s significantly higher than in February 2019, when 19% of homes for sale were sold over asking price. In 2023, more than 24% of homes for sale went for over asking price.
The average gap between the list price and the final sale price is highest in San Jose, Calif. In February, nearly 70% of homes listed in that metropolitan area were sold over list price, data from Zillow showed. That’s up from 2019, when about half the homes listed in the area sold for more than the asking price.
The metropolitan area with the second biggest gap between asking prices and final sale prices was San Francisco, where 63% of homes were sold over asking. That’s up from 53% in February 2019.
A house listed for sale on March 22 in San Francisco’s Eureka Valley for $2.4 million went under contract a week later and was eventually sold for $3.2 million, according to the listing.
And in Hartford, Conn., about 62% of listings were sold over asking price in February, compared with 21% of listings in February 2019. As of March, the city’s housing inventory was down 71% from March 2019, Zillow said, the biggest deficit of any major U.S. metropolitan area.
The reason homes are sold far over list price “comes down to inventory,” Bachaud said. “When there are more homes on the market for each buyer to consider, that eases the competitive pressure for each home.”
To that end, some parts of the country have seen an increase in inventory, which has hit the brakes on soaring home prices. In Florida and Texas, a surge in housing supply has led home sellers to cut prices to attract buyers.
In April, the inventory of homes for sale surged year over year in Tampa, Orlando and Jacksonville, according to a monthly report by Realtor.com. In Tampa, listings grew by nearly 70% compared with April 2023.
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