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 around DC? 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 from our entire DC 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:

The largest discounts by far were in the Great Falls area (22066), where some very expensive homes are selling at relatively steep discounts. The average list price of sold homes in 22066 was $1,422,654, while the average sale price was $1,254,527. Homes in the north corner of DC (20012) are also selling at a large discount of nearly 10% off list, and with an average closing price of $492,306, might be a bit more in most home shoppers’ range.

17 of the 92 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.

Interestingly, the #1 zip code for smallest discounts was in Herndon (20170), right next door to the #1 zip code for largest discounts in the Great Falls area (22066). Of course, with an average list price of just $256,738, prices in Herndon don’t have much room to go down, compared to many other regions around DC.

Of the 4,738 sales we tracked in the 3-month period, just 32 homes (0.7%) sold for more than 20% off the asking price, and 309 homes (6.5%) sold for 10% or more off the asking price. 918 homes (19.4%) 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. While an offer 10% below list price may be accepted in a neighborhood where buyers are few and far between, some areas are still seeing enough interest to command full price or even more.