As sellers continue to benefit from a hot market, the earlier chaos of aggressive bidding wars is cooling off, giving potential buyers a better chance of landing the house of their dreams.
Redfin says 59 per cent of agents found themselves in bidding wars in August – a record low for 2021. Redfin began tracking its bidding war data in April 2020.
The market hit its peak in April at 74.3 per cent and has continued to decline since the spring.
“Sellers are still pricing their homes very high, but a lot of buyers have had enough and are no longer willing to pay the huge premiums they were six months ago. Instead of 25 to 30 offers on turnkey homes, we’re now seeing five to seven,” said Nicole Dege, a Redfin real estate agent in Orlando.
“Buyers are getting a bit more selective. I have one seller who recently put his four-bedroom single-family pool house on the market, but the roof was shot. He had to lower his asking price to $423,000 from $427,000 and agree to spend around $7,000 to replace the roof in order to attract bidders. Six months ago, he would have easily been able to sell that home as-is without dropping the price.”
A combination of seasonal slowdowns and increased availability has led to the downturn in bidding battles. The nation is coming out of its intense housing shortage and the pricing of housing growth is leveling out.
Despite the cooldown, bidding wars rage on in several cities.
Raleigh, NC had the highest bidding-war rate of the 48 U.S. metropolitan areas in this analysis, with 86 percent of offers written by Redfin agents facing competition in August. San Francisco-San Jose was in second place, and sat at 70.7 percent, followed by Tucson, AZ at 70.5 percent.
Cincinnati and Salt Lake City rounded out the top five on the list, with bidding-war rates of 70.4 percent and 68.1 percent, respectively.