Redfin: Bidding Wars Persist Amid Holiday Slowdown
It’s been a most unusual year for housing; the traditional spring home buying season stretched into summer, then fall, then winter. And even amid a slowdown over the holidays, Redfin, Seattle, said bidding wars on homes for sale continued nearly unabated.
Redfin reported nationwide, 59.6% (out of five) of home offers written by Redfin agents faced bidding wars in December. While this represents the lowest share in 12 months and down from a revised rate of 61.3% in November, it’s still up from 54% a year ago.
The report noted while competition has dipped in recent months partly because the housing market typically slows in the winter, with many buyers and sellers taking a break during the holidays, the housing market remains quite competitive as house hunters grapple with a record shortage of homes for sale.
“Buyers should anticipate that they may not win a house until their sixth or seventh bid. If you’re the type of person who falls in love with a house, this is not your market,” said Candace Evans, a Redfin team manager in New York. “If you show a house to 10 buyers, you’ll probably get eight offers. An agent on my team just put a home in the Bronx on the market and started receiving offers even though there hadn’t been a single open house or tour yet. The house ultimately received over 10 offers and went for well above the asking price.”
Redfin said more than half of offers have faced bidding wars since May 2020. But with rising mortgage rates now making the homebuying process more expensive, some buyers may no longer be able to stretch their budgets in order to write offers competitive enough to win.
The report said nearly two-thirds (64.6%) of offers for homes priced between $800,000 and $1 million faced bidding wars in December, the highest share of any price bucket. Next came homes in the $1 million to $1.5 million range (62%), followed by homes priced over $1.5 million (61.7%). Vacation homes, which are often pricey, have become increasingly popular during the pandemic—one possible explanation for elevated competition in the high-end market.
The lower price buckets were competitive as well, with more than 55% of offers for homes priced between $200,000 and $800,000 facing bidding wars.
Townhouses were the most competitive property type, with 62% of offers facing competition, followed by single-family homes, at 61.3%. Next came multi-family (54.7%) and condos (53.3%). Many house hunters are likely eyeing townhouses after being priced out of the market for single-family homes.
Redfin said Salt Lake City had the highest bidding-war rate of the 37 U.S. metropolitan areas in this analysis, with 74% of offers written by Redfin agents facing competition in December. Next came Tucson, Ariz. at 73.1% and San Diego at 71.1%. Virginia Beach, Va., and Seattle rounded out the top five, with bidding-war rates of 70.6% and 70%, respectively.
