Bidding Wars Reach Lowest Point Since December 2020
By The Mortgage Note
Bidding wars on home offers from Redfin fell to 59.5% in November, their lowest level in eleven months, the company reported. It’s the first time it’s fallen below 60% since December 2020.
Month-over-month, bidding wars fell 2.3%, dropping from 61.8% in October. However, they were up slightly year-over-year, from 57.3% in November 2020. They reached a pandemic peak in April when 74.6% of home offers written by Redfin agents faced competition.
The top three cities for bidding wars were Richmond, VA, at 80%, Salt Lake City at 73.8%, and San Diego at 72%. Honolulu followed up at 71.1% and Dallas just made the top five at 70.6%.
“Bidding wars are still happening, but buyers are starting to get more breathing room,” said Jill Thompson, a Redfin agent in Indianapolis.
“A few months ago, the typical home was going for $15,000 to $20,000—sometimes even $50,000—over the asking price. Buyers were paying cash, waiving inspection contingencies, and
overlooking necessary repairs in order to win. Today, buyers are more cautious about overpaying, aren’t waiving inspections as freely as they were in the spring, and feel less of a rush to commit to a house after the first tour.”
Indianapolis saw a significant decrease in competition in November, dropping to 36.8% from 73.6% in October.
There is evidence of a cool-down nationwide, though the housing market still remains unseasonably hot. Homebuyer sentiment is low, with only 29% of consumers reporting that it’s a good time to buy, and lenders expect their profits to decline as the market returns to a “more normal state.“
But by the numbers, demand remains elevated and analysts expect that trend to continue into 2022.
“It’s typical for competition to
ease in the winter months as more families take time off for the holidays,” said Redfin Chief Economist Daryl Fairweather.
“While competition waned in November, it was still higher than a year earlier, which is a sign that demand will be strong in the new year.”
Read more at https://www.themortgagenote.org/bidding-wars-reach-lowest-point-since-december-2020/