Dwindling U.S. housing inventory during 2017 forced desperate homebuyers to bid higher and pay thousands over the asking price for homes across the country.
Nearly a quarter of homes sold for an average of $7,000 above the asking price, according to Zillow research released Thursday, but in the booming markets of San Jose, San Francisco and New York, buyers paid about $62,000, $41,000 and $12,000 more, respectively.
Housing inventory has been in steady decline for nearly three years, just as millennials should be buying their first house. Most of them haven't saved enough money for a down payment on their first home, and will be hard pressed to purchase homes above asking price. President Donald Trump's tax bill is projected to lead to even fewer homeowners.
“In the booming tech capitals of the California Bay Area and Pacific Northwest, paying above list price is now the norm. In the face of historically tight inventory, buyers have had to be more aggressive in their offers," said Aaron Terrazas, a senior economist at Zillow, "We don’t expect this inventory crunch to ease meaningfully in 2018, meaning buyers will be facing many of the same struggles this year."
American homes selling above asking price have increased from 17.8 percent in 2012 to 24.1 percent in 2017.
Though inventory will likely remain low this year, construction firms are expecting high demand across all sectors of residential and commercial real estate, and they have even increased efforts to hire new workers based on President Donald Trump's infrastructure promises.
"The demand for new housing is there, inventory is low, and home prices are going up, so there could be more construction in 2018, but one of the limiting factors will be the low number of workers available to build those houses," chief economist Robert Dietz from the National Association of Home Builders told Newsweek earlier this week.
The share of homes on the U.S. market valued below $1 million dollars has been decreasing, and the number of homes valued at over $5 million has surged in recent years as a result of tight inventory and a shortage of construction workers.
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