The percentage of homesellers making concessions to buyers has nearly doubled since last year, according to a new Redfin report.
More than two in five homesellers have made concessions during the selling process to attract buyers.
In the three months ended April 30, 42.9% of sellers made concessions to buyers, up from 25.5% last year and just shy of February’s record high of 45.6%, according to the report, which examined sales involving Redfin buyer agents.
In Chicago, the numbers have been more steady, 44.7% this year compared to 41.1% last year.
Several markets, especially those that have had extreme price swings in recent years, saw the percentage of sales with concessions more than double year over year. Those markets include: Denver, Miami, Minneapolis, Nashville, New York City, Salt Lake City, San Jose, Seattle and Tampa.
In Tampa, just 12% of home sales included concessions in February through April last year. This year, that percentage is 58.
The concessions include money toward everything from repairs to closing costs and mortgage rate buydowns.
The report notes concessions are usually less common in the spring market, as more buyers are looking for a home, but mortgage rates are making it harder for sellers in the current environment because many house hunters have put their plans on hold.
Homebuilders are also throwing in freebies, according to the report, as they try to sell off their inventory, offering would-be buyers money toward closing costs, gift cards and even free cars.
But concessions aren’t the case in all markets right now. Some markets have so few homes for sale that there continues to be competition driving up prices, and those involved in bidding wars aren’t seeing concessions from sellers, Redfin says.
Shauna Pendleton, a Redfin agent in Boise, Idaho, says high mortgage rates and low supply have thrown the housing market out of whack, but that each deal is different.
“Some buyers are asking sellers for the sun, the moon and the stars in addition to offering below the asking price, and some are requesting no extras because they’re so motivated to secure one of the few homes on the market,” she said. “The one consistency in the market right now is homebuilders handing out freebies. Most builders are offering concessions equal to about 3% of the sale price, which gets credited to buyers at closing, to offload properties. Buyers are using the extra cash to cover closing costs or buy down their mortgage rate.”
Concessions aren’t the only way sellers are trying to move their homes; they are also accepting less money.
According to the report, 15.7% of sellers dropped their asking price and provided a concession to a buyer during the three months ending April 30 — that percentage is nearly four times more than the percentage of sellers who did the same a year ago.