Study: The percent of sellers who agreed to a buyer concession rose 11 points year-to-year to 41.9% in 4Q. It was lower in Miami, higher in Orlando and Tampa.
Home sellers gave concessions to two out of five buyers (41.9%) in the fourth quarter of 2022, according to Redfin. It’s an increase from over 30% in 3Q and the previous high of 40.8% in 3Q 2020, the early days of the pandemic. Redfin’s records are based on sales reported by Redfin agents.
Concessions have made a comeback as rising mortgage rates, inflation and economic uncertainty dampen homebuying demand. It’s a notable shift compared to late 2020 and 2021, when record-low mortgage rates fueled fierce competition, forcing most buyers to bid over asking price and waive every contingency just to have their offer taken seriously.
In Florida, the percent of seller concessions in Miami (28.7%) and Tampa (37.3%) lagged the average number nationwide (41.9%), but Orlando was higher at 47.8%. However, the year-to-year increase in both Tampa (up 13.2 points) and Orlando (up 17.8 points) was greater than the national average.
Concession increases reported in Fla. metros
- Miami: 34.8% in 4Q 2022 compared to 28.7% in 4Q 2021, a 6.1-percentage point increase
- Orlando: 47.8% in 4Q 2022 and 30.0% in 4Q 2021, a 17.8-point increase
- Tampa: 37.3% in 4Q 2022 and 24.1% in 4Q 2021, a 13.2-point increase
- Overall U.S.: 41.9% in 4Q 2022 and 30.9% in 4Q 2021, an 11-point increase
“Buyers are asking sellers for things that were unheard of during the past few years,” says Van Welborn, a Phoenix Redfin agent. “They’re feeling empowered, partly because their offer is often the only one, and partly because they know sellers have built up so much equity during the pandemic that they can afford to dole out sizable concessions.”
Homeowners increasingly sell for below their desired price as the housing market slows. A record 22% of home sales recorded by Redfin buyers’ agents in the fourth quarter included both a concession and a final sale price below the listing price, while a record 19% included both a concession and a listing-price cut that occurred while the home was on the market. A record 11% included all three.
“It took a while, but seller expectations are coming back down to earth. Concessions were common before the pandemic, and we may be returning to that norm,” Welborn says. “Sellers realize they’re not going to get $80,000 over the asking price like their neighbor did last year.”
News Source: floridarealtors.org
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