Redfin: 7 in 10 Buyers Still Face Bidding Wars
Redfin, Seattle, said 70.4% of home offers written by Redfin agents faced competition in May, down from 73.6% in April, but still up significantly from 52.7% a year ago.
Redfin Chief Economist said competition typically tapers in the early summer following spring homebuying season, so seasonality could be contributing to the dip in the May bidding-war rate. Early signals of a cooldown in the housing market may also be a factor. She said competition is likely starting to level off as well, and may have already hit its peak.
“After months of surging prices and low inventory, some house hunters are moving to the sidelines—either because they’re priced out or burned out,” Fairweather said. “Americans are spending more of their money on things like travel and dining out now that pandemic restrictions are being lifted.”
The report said American house hunters have grappled with record-breaking levels of competition during the coronavirus pandemic as homebuyer demand has skyrocketed due to low mortgage rates and flexible work policies. This has intensified an existing housing shortage, which has also fueled fierce bidding wars. But there are signs that the red-hot market may be cooling ever so slightly; home-purchase applications have been on the decline since late March and pending sales recently fell 10% from their peak about a month ago.
“The housing market was going 100 miles per hour and now it’s down to 80,” Fairweather said.
Spokane, Wash., had the highest bidding-war rate of the 50 U.S. metropolitan areas in this analysis, with 86.7% of offers written by Redfin agents facing competition in May. Next came Raleigh, N.C., at 84.5%, and Tucson, Ariz., at 81.8%. Salt Lake City and Charleston, S.C. rounded out the top five, with bidding-war rates of 81.5% and 79.3%, respectively.