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Seller Concessions Rise Year-over-Year as Market Slowly Shifts Toward a Balanced Market

Economic Insights
Economic Insights from the MIAMI REALTORS Chief Economist

By Gay Cororaton, Chief Economist, MIAMI Realtors®

Seller concessions are the costs the seller agrees to pay to assist the homebuyer and move the listing to a successful closing. Seller concessions can range from closing costs, cost of repairs, and financial costs such as appraisal fees, inspection fees, title insurance, and discount points.

Of sales that closed through the MIAMI REALTORS® MLS, a higher fraction of properties sold with a seller concession in the first quarter of 2023, at 19.2% compared to just 12.7% in 2022 and 12.4% in 2021 when buyers were competing aggressively amid historic mortgage rates of about 3%, pandemic-fueled homebuying, and the expansion of remote work.

As the housing market continues to normalize, the fraction of sales with seller concessions is also climbing back up to the pre-pandemic level, at around 17% to nearly 20% in 2019 and 2020.  The increase in seller concessions is indicative of the shift from a pure sellers’ market to a more balanced market where buyers have more bargaining power.

Seller concessions appear to be helping to move listings to a successful closing. South Florida’s existing home sales rose to 6,001 in February, up 20% from January 2023, though still down 33% from February 2022.

By property type, about 1 in 4 closed sales of single-family homes and townhomes sold with a seller concession, and about 1 in 10 condominiums sold with a seller concession.

By county, seller concessions accounted for about 1 in 5 sales in Miami-Dade, Broward, and Palm Beach.

Talk to your REALTOR® if you need to offer a seller concession and what type of concessions to offer to move the sale in a way that is advantageous to both buyer and seller.

Significant Price Appreciation Gains Enable Sellers to Offer Concessions

Sellers have accumulated a lot of equity and are in a position to still make a gain on a sale with the median sales price up over 60% as of February 2023, or an increase hovering at about $200,000  in the past three years alone in the counties of Miami Dade , Broward, Palm Beach, and Martin.

Seller Concessions Rise Year-over-Year as Market Slowly Shifts Toward a Balanced Market
Seller Concessions Rise Year-over-Year as Market Slowly Shifts Toward a Balanced Market

 

 

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