Where are buyers getting the biggest discounts?

While the number and speed of price reductions is certainly interesting information (to some), what really matters to folks out there in the market right now is the size of price reductions. Better yet, how receptive are sellers to accepting an offer below their asking price?

Let’s get down to the nitty gritty. Where are buyers currently getting the biggest discount off the asking price in the Seattle area? Knowing which neighborhoods are softer in terms of sale price discounts off list price will better equip you when making an offer.

In the charts below, we have taken all sales data from the last three months in Redfin’s Seattle coverage area and sorted it by zip code. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any zips with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel 2007 format.

Here are the top ten zip codes with the largest overall discount:

Good news if you’re looking to buy on an island. Vashon Island (98070) took the top spot, with the average closed price coming in nearly 11% lower than the final listing price. Mercer Island (98040) came in at #3 with 7.1% off. Bellevue sellers are also accepting relatively large discounts as well, with 98005 and 98004 rounding out the top 4 spots.

16 of the 69 zip codes we ranked came in with discounts under 2%, indicating that either buyers are more willing to pay asking price or sellers in those regions are better at pricing their homes appropriately to the market in the first place.

One Seattle area neighborhood actually had an average sale price that was slightly higher than the final list price: Covington (98042).

In general, there is a distinct trend of homes in neighborhoods with lower average prices selling closer to asking price. For the real data addicts out there, here’s a chart that visualizes that:

Keep this in mind if you’re thinking of making a below-list offer. Statistically speaking, the more expensive the neighborhood, the more likely the seller is to accept a lower priced offer, and vice versa.

Of the 3,327 sales we tracked in the 3-month period, just 15 homes (0.5%) sold for 20% or more off the asking price, and 158 homes (4.7%) sold for 10% or more off the asking price. 495 homes (14.9%) sold for more than asking price.

It will be interesting to keep an eye on this data once we have been able to run it for a number of months, to see which neighborhoods are trending toward larger discounts and which are trending toward selling at full price.

I think the takeaway from this data is that when crafting an offer, buyers should be aware that not all neighborhoods are created equal. An offer 10% below list price may be accepted in a neighborhood where buyers are few and far between (usually the higher-priced neighborhoods), but some areas are still seeing enough interest to command full price or even more.

Redfin Open Houses

1.)1803 Bigelow Ave N, Seattle $1,750,000

Open Saturday, November 22nd, 1-4pm

2.) 11987 SE 4th Pl #502, Bellevue $419,500

Open Sunday, November 23rd, 1-4pm

Which Neighborhoods Have the Fastest Price Reductions?

Here’s a fun set of data. Redfin data engineers have dug deep into our market databases to find out which neighborhoods have the fastest price reductions.

For listings with more than one price drop, we calculated the time between each price drop. Then, for each neighborhood, we calculated the median average number of days between successive price drops for listings. Neighborhoods with fewer than 20 reduced-price listings were excluded from the calculation.

Here’s a chart of the top ten neighborhoods with the fastest price reductions:

For those readers that are interested to know which neighborhoods had the slowest price drops, feel free to download the full data set in Excel 2007 format.

Only Northwest Everett made this month’s top ten neighborhoods with the most price-reduced listings and the fastest price reductions.

On average, neighborhoods where price reductions happen the fastest seem to be those with lower prices, both in terms of overall median and per square foot. The average median sold price per square foot of the top ten neighborhoods with the fastest price reductions was $245, while the ten neighborhoods with the slowest price reductions had an average median sold price of $334 per square foot.

Redfin Open Houses

1.) 11987 SE 4th Pl #502, Bellevue $419,500

Open Sunday, November 16th, 11-4pm

2.) 15604 111th Ave NE, Bothell $629,950

Open Sunday, November 16th, 1-4pm

Seattle Area Redfin Open Houses

1.) 1803 Bigelow Ave N, Seattle $1,750,000

Open Saturday, November 8th, 1-4pm

2.) 11987 SE 4th Pl #502, Bellevue $419,500

Open Saturday, November 8th, 1-4pm

Open House: 5Br Sammamish Home

Open House Dates and Times:

Sunday, November 9th, 1-4pm

1525 218th Pl NE
Sammamish, WA 98074 

Which Cities, Towns, and Neighborhoods have the most price reductions?

Today Redfin is launching the new Sweet Digs, Analytical Edition. We’re proud to introduce Tim Ellis as the curator of this new effort. Tim will bring the same independent, data-driven perspective to Sweet Digs that first established him as a pre-eminent real estate blogger, but with pricing data that only a broker—and sometimes only Redfin—can access. He will be joined by other bloggers providing real-time insights on how contracts are being negotiated in neighborhoods around the area.

Sweet Digs is still a work in progress so if you have ideas about the types of posts you’d like to see — or if you’d like to contribute an analytical post of your own — just drop me (glenn at redfin dot com) or Tim (the_tim at thatchmound dot com) a line or leave a comment below. Thanks for all your support, and we look forward to hearing from you!

Regards, Glenn Kelman, CEO Redfin

I’d like to thank Glenn and the good people at Redfin for giving me the opportunity to delve into real estate data and share insights with readers from around the country. To kick things off, let’s take a look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

First up are the top ten cities with the most price-reduced listings:

Of the 146 cities/towns we ranked in the Seattle / NW Washington area, 16 had price-reduced ratios of over sixty percent, and 79 (just over half) came in with fifty percent or more. South King County had the strongest showing on the most-reduced list, taking four of the top ten spots.

Here are the top ten cities with the least price-reduced listings:

Interestingly, the cities with the fewest price reductions are quite a ways out of town. Way up north in Blaine, over the mountains in Moses Lake, east on the peninsula in Port Townsend, and south in Long Beach.

Getting a little more granular, let’s look at the top ten Seattle area neighborhoods for price reductions:

50 of the 144 neighborhoods we ranked in the Seattle area had a price-reduced ratio of fifty percent or more. The top two neighborhoods couldn’t be much more different from each other, with relatively-modestly-priced Northwest Everett and the suburban eastside Somerset both seeing over 70% of homes reduce prices before coming off the market.

Lastly, let’s take a look at which neighborhoods had the least price-reduced listings taken off the market:

Wow, what is going on in north Everett? We’ve got Northwest Everett topping the list of the most price reductions at 74%, then right next door in the Delta neighborhood, only 33% of homes saw price reductions. Weird.

Outside of Delta and Happy Valley way up in Whatcom, all the remaining neighborhoods on the top ten least reduced list are in King County, with many of the strongest neighborhoods (not surprisingly) clustered right around downtown Seattle.