Buyers paid more than the asking price in about 24% of U.S. home sales in 2017, netting sellers an average $7,000 more over their initial asking prices, according to Zillow.
The share of homes sold over the asking price has grown considerably since the start of the housing recovery in 2012 and increased in each of the past three years. Back then, 17.8%, or roughly one in six, homes sold over the seller's original asking price.
A combination of factors contributed to sellers' windfalls, including limited supply and high demand, demographic shifts, a strong economy and favorable financing conditions, Zillow's research team said in its report. Tight inventory of homes for sale, especially at the entry level, hasn't dampened demand from buyers, particularly younger, first-time buyers that are growing up and looking to transition away from renting as they move up the career ladder and start families, the Zillow report adds.
What's more, researchers said, low mortgage rates have buoyed buyers' budgets, raising the limits on what they can afford and may be willing to pay.
In a number of markets, such as in San Jose, San Francisco and Salt Lake City, it was more common for homes to close at their asking price, with 68.5%, 64.5% and 55.4% of homeowners, respectively, selling their homes for above the original listing price.
The typical home that sold above asking price in San Jose netted sellers an additional $62,000 on average, the largest difference between list and sale price of 100 analyzed metropolitan areas, according to Zillow.
The share of sales for the New York and Northern New Jersey area that sold above list price last year was 20% — considerably higher from five years prior when that figure was 6.8%. While relatively strong, the cities that made the list had nearly half (or more than half) of homes sales above the asking price.
Here's a look at the top 10 cities where homes sold above asking price, ranked by the share of home sales that sold above asking price in 2017.