Redfin says 53.6% of home offers written by its agents nationwide faced competition in November, according to a new report.
While that figure is down from a revised rate of 58.5% in October, it represents the seventh-straight month in which more than half of Redfin offers encountered bidding wars.
U.S. home buyers have been grappling with fierce competition this year due to historically low mortgage interest rates, an acute housing shortage and a sudden wave of migration made possible by remote work during the coronavirus pandemic.
The San Diego metro area had the highest bidding-war rate of the 24 metros in this analysis, with 75.3% of Redfin offers facing competition. It was followed by Denver (66.7%), San Francisco/San Jose (65.8%) and Seattle (60.9%). Sacramento – the most popular destination for people looking to move to a different metro area – rounded out the top five, at 60.0%.
“Single-family homes that are priced right, in good condition and in a desirable neighborhood are still selling quickly for top dollar,” says Justin Hess, a Redfin real estate agent in the Denver area. “If you’re a buyer, you had better bring your best punch and expect competition. People are paying a premium for the latest and greatest, updated, remodeled, turnkey homes.”
Some of the places with the highest bidding-war rates have also seen significant growth in new listings – one factor that’s allowing competition to flourish, according to Redfin Chief Economist Daryl Fairweather.
“Buyers aren’t going to compete for homes that have been sitting on the market,” Fairweather says. “They will typically only get into a bidding war for a newly listed, desirable home that is move-in-ready.”
In San Diego, for example, new listings were up 13% year over year in November, outpacing 5% growth in Minneapolis. Minneapolis had a lower rate of competition than any other metro area in this analysis, with 34.6% of Redfin offers facing bidding wars in November. Also in the bottom five were Chicago (36.4%), Tampa, Fla. (37.1%), Houston (37.3%) and New York (37.6%).
Condos were the least likely to encounter competition in November, with 38.3% of Redfin offers facing bidding wars. That compares with 48.7% of offers for townhouses and 57.3% of offers for single-family homes.
The condo market has experienced relatively sluggish growth as remote work and a shift in home-buyer preferences due to the pandemic have made single-family homes more sought after.
To read the full report, click here.
Photo: Daryl Fairweather
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