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New forecast: 65% of homes will sell below list price this quarter

Aly J. Yale
The Mortgage Reports contributor

Where homebuyers can strike a deal

Are you hoping to negotiate that dream home down in price? According to a new analysis, you’ll have the best luck in Miami. In this Florida city, 84 percent of homes are predicted to sell below list price.

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Under-list price bargain hunting 

According to the latest Knock Deals Forecast from Knock.com, more than 65 percent of currently listed homes will likely sell for under list price in the next quarter. The average discount buyers can expect is about 3 percent. In about a third of major cities, buyers could enjoy discounts of 5 percent or more.

The potential for bargains is biggest in Miami, where Knock predicts more than 84 percent of homes will sell below listing price. There, the average predicted discount clocks in at nearly 6 percent.

Bidding wars are down, but will the trend continue?

Other cities where sellers can snag deals, according to the analysis, are Chicago (with 77 percent of homes predicted to sell below listing); Hartford, Connecticut (76 percent); Houston (75 percent); New Orleans (75 percent); Tampa, Florida (73 percent); Pittsburgh (73 percent); New York (73 percent); Jacksonville, Florida (73 percent); and St. Louis (71 percent).

The reason behind the abudance of deals could be misguided seller expectations. As the report explains, “Previous editions of the Knock Deals Forecast have found a correlation between rising prices and a higher rate of deals. Many home price reports that create buzz around rising prices are dated by one to two months, and can encourage sellers to list at prices higher than market value, particularly taking factors like seasonality into account.”

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Fewer homes are selling over list price

In Q2, Knock’s statistics show a decrease in the number of homes sold over list price. Just 23 percent of houses sold above their original listing price, a dip from 28 percent the year prior. According to the newest forecast, only 19 percent of homes are expect to go for more than list price in the coming quarter.

Overall the number of homes selling under list price increased by 5.5 percent last quarter — slightly under Knock’s original prediction.

“While we’re not necessarily seeing the same jump in homes selling below original list prices that we forecasted going into Q2, the good news is that there has been a steady drop in homes selling above their original list prices,” said Jamie Glenn, co-founder and chief operating officer at Knock. “Buyers are being more cautious, which is forcing sellers to price their homes more realistically. Of course, lower prices combined with seasonality may lead to less inventory, but I think we’ll see buyers being less hasty to pay over market value regardless of availability.”

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