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After several years of bidding wars and waived contingencies, the scales are starting to tip in homebuyers’ favor, according to Redfin’s latest market report published on Wednesday.
During the three months ending Feb. 28, 45.5 percent of homesellers offered to cover repairs, closing costs and mortgage rate buy-downs alongside other concessions. That’s a 14.4 percent increase from last year and the highest concession rate since June 2020.
“Buyers today are way more demanding and selective,” Palm Beach-based Redfin agent Elena Fleck said in the report on Wednesday. “They’re willing to wait to find the perfect house, which wasn’t the case during the pandemic homebuying boom.”
“Any home with a roof that’s over eight years old is just sitting — buyers don’t want to put any additional funds into repairs,” she added. “I had a few sellers offer credits for new roofs to close the deal. We’re also seeing more buyers ask for credits toward their closing costs.”
Redfin data reveals homebuyers in Las Vegas are most likely to receive extras, with more than a third of homesellers (77.4 percent) offering a concession. San Diego (74.8 percent), Sacramento,(70.9 percent), Phoenix (63.7 percent) and Denver (60.9 percent) rounded out the top five with more than half of homesellers making bold moves to attract buyers.
Homesellers in Seattle are quickly catching up to Las Vegas, with the share of sellers offering concessions increasing 31.5 percentage points annually to 51.6 percent. Las Vegas (30.6 ppts), Denver (26.2 ppts), San Diego (23.3 ppts) and Phoenix (22.4 ppts) experienced similar annual increases, Redfin said.
Meanwhile, homesellers in the South, Midwest and East coasts were more resistant to the concession craze.
Less than a fourth of homesellers in New York City (16.7 percent) offered a concession during the three months ending on Feb. 28. Sellers in San Jose (21 percent), Boston (23.1 percent), Philadelphia (30 percent) and Austin (33.9 percent) ranked toward the bottom of the list, with the number of concessions actually dropping 3.3 percentage points from 2022 to 2023.
In addition to offering more concessions, sellers are also more apt to make price cuts. More than a fourth of home sales (25.2 percent) during the studied time period included a concession and a final sale price below the list price.
A record-breaking 20.6 percent included a concession and a listing price cut that occurred while the home was on the market. Thirteen percent included all three.
“During the peak of Covid, it took two to three days to sell anything regardless of the condition, location, or square footage,” Fleck said. “Now, a home that’s not perfect may stay on the market for three to four months if the seller doesn’t throw in something to sweeten the deal.”