Competition for homes has cooled with the typical wintertime seasonal slowdown, but even though the bidding-war rate has dropped since peaking this past spring, Redfin is still cautioning home seekers to expect other offers.
Nationwide, 59.6% of offers written by Redfin agents faced at least one competing bid in December. That’s the lowest percentage in a year and down from November’s share of 61.3%. Still, it’s up on an annual basis from 54% in December 2020.
“Buyers should anticipate that they may not win a house until their sixth or seventh bid,” Redfin team manager Candace Evans said on the company’s website. “If you’re the type of person who falls in love with a house, this is not your market.”
Evans went on to say that a house shown to 10 buyers in her area of New York will probably receive eight offers — and some properties don’t even get that far into the process before the bidding war starts.
“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,” she said. “The house ultimately received over 10 offers and went for well above the asking price.”
Rising prices — and now, rising interest rates — are relegating some buyers to the sidelines as they are unable to keep pushing the envelope on their budgets and edge out competition. At the higher end of the market, however, buyers armed with cash are fueling bidding wars.
This is due in part to often-expensive vacation-home purchases regaining traction as new waves of the COVID-19 pandemic hit. For homes priced between $800,000 and $1 million, for example, 64.6% of Redfin offers in December faced at least one other bid. For homes between $1 million and $1.5 million, 62% involved a bidding war.
Among property types, townhouses (which may be seeing heightened attention as many would-be buyers are priced out of the market for detached homes) saw the most competition, with 62% of offers facing competition. The share for single-family homes was at 61.3%.