The home on Lansdale Avenue was originally listed for $2,495,000, but it sold for $3.5 million three days later.
“We expected more, a little bit more, but we didn’t expect a million dollars more,” real estate agent Holly Phan, who listed the property along with agent Richard Woo, said to the TV station. The modern two-story home has four and half bathrooms, a two-car garage, a sleek chef’s kitchen and a panoramic view of the city.
The shocking sale price is the latest sign of a real estate market gone haywire during the pandemic, prompted by a combination of surging demand and a severe shortage of inventory. Historically low mortgage rates have only helped to push home prices higher.
Data from Redfin shows that of the homes sold in June, an astonishing 56.5% went for above the list price. That’s a huge jump of 29.6 percentage points from the same month in 2020. “As more people get clarity on what post-pandemic life is going to look like, they're willing to go well above asking price to snag the right fit for their needs,” Redfin chief economist Daryl Fairweather told Money earlier this year.
In the past, many owners were happy to sell when they got an offer in the neighborhood of an aspirational asking price. But a blistering market means that sellers have more power than ever while buyers are often forced to scramble to put forward a competitive pitch — and sometimes that means offering well above the listed price.
What should buyers expect in 2022
While stories like the case of the house in San Francisco can serve as bellwethers of broader trends, most aren’t quite so dramatic. According to Redfin, the average home sold in June went for 2.6% above asking price — a record high but a far cry from the 40% premium the buyers of the Lansdale Avenue property paid.
A skeptic might also argue that when a home sells for well above the list price, it's a sign that the amount asked for was simply much too low to begin with.
While there are already some signs that 2021's extraordinary real estate landscape is starting to normalize, 2022 isn't shaping up to be a buyer’s market just yet. CoreLogic expects home prices to rise at a rate of 6%, though that's much slower than 2021's 15% growth.
A recent report from Realtor.com predicted that 2022’s most popular housing markets will be clustered in the Mountain West, Midwest and New England — areas with low unemployment, high job growth and lots of outdoor amenities.