Bidding Wars Continue to Heat Up | Realtor Magazine
Don’t let your home buyers be caught off guard: They’re likely to face steep competition for the home they want. With a limited number of homes for sale and strong buyer demand, bidding wars are growing more commonplace.
Sixty percent of real estate agents reported bidding wars were on the rise in their market in June, according to a study of 2,000 real estate professionals from HomeLight.
A report from the brokerage Redfin shows that more than half of its offers—54%—saw multiple offers for homes in June. Single-family homes and townhouses were the most likely to receive multiple bids from buyers, moreso than condos, Redfin notes.
Bidding wars have been reportedly growing since May, as many states began to reopen after being mostly on lockdown during the initial onset of the COVID-19 pandemic.
“Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades,” says Taylor Marr, Redfin’s economist. “It’s like a game of musical chairs where only the best bidders get a seat. Both renters and move-up buyers who have held onto their jobs are vying for the small number of single-family homes on the market as they realize they need more space for their families.”
Freddie Mac reported last week that the average 30-year fixed-rate mortgage for the week ending July 9 dropped to an all-time low of 3.03%. Buyers may be wanting to take advantage of the low financing costs, but finding a home to buy is becoming increasingly problematic. The number of homes for sale nationwide has plunged by more than 20% annually.
The most competitive markets for buyers in June were Boston, San Diego, and Salt Lake City, Redfin reports. Seventy-two percent of offers faced competition in Boston in June. “This is the most competitive real estate market I can remember,” says James Gulden, a Boston Redfin real estate professional. “There are multiple bids on nearly every property I see, whether I’m representing the buyer or the seller. I’m seeing the most competition in the suburbs, where homes are selling in a matter of days. Sellers don’t want homes to be on the market any longer than necessary because of COVID-19, so they’re setting offer deadlines, which create a frenzied, competitive atmosphere.”
The metros Redfin tracked with the most bidding wars in June and the share of offers that faced bidding wars were:
- Boston: 72.4%
- San Diego: 65.7%
- Salt Lake City: 63.8%
- Minneapolis: 61%
- Washington, D.C.: 59.7%
- Los Angeles: 58.1%
- San Francisco/San Jose, Calif.: 58%
- Seattle: 56.9%
- Austin, Texas: 56.5%
- Phoenix: 55.8%
- Portland, Ore.: 54.5%
- Denver: 53%