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.