More than 40 percent of Redfin purchase offers faced competitive bids in the four weeks ending May 10, according to a new report from the brokerage.
In some metropolitan areas, the bidding war rate surpassed 60 percent, Redfin said.
“Demand for homes has picked back up after hitting rock bottom in April, and that uptick, paired with a lack of supply, is a recipe for bidding wars,” Redfin Lead Economist Taylor Marr said in a release. “Homebuyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm.
“But sellers are still holding off on listing their homes, partially due to economic uncertainty and concerns of health risks,” Marr said. “In some hot neighborhoods, there may only be one or two homes for sale, with multiple homebuyers vying for them.”
Even prior to the coronavirus pandemic, home supply was at its lowest point in seven years, with a 50 percent year-over-year decline during the second week of April. Redfin said home supply was down 30 percent year-over-year in the first week of May.
In the four weeks ending May 10, Redfin said the highest rates of competition were in Boston (63.3 percent); San Francisco (63 percent); Fort Worth, Texas (62.2 percent); San Jose, Calif. (59.4 percent); and Providence, R.I. (54.3 percent).
“Nearly every offer in the Fort Worth area is facing competition right now,” Redfin agent Crystal Zschirnt said. “During the first week of May, one of my clients put in an offer on a house that ended up with 17 total offers. The only homes that are sitting on the market without multiple offers are overpriced.
“The fierce competition is due to low inventory,” Zschirnt said. “Sellers in my area aren’t listing their homes at nearly the same rate they did before the pandemic, partly because they don’t want potential buyers walking through their homes, particularly people who aren’t seriously searching or aren’t yet qualified.”
Redfin’s report identified the metropolitan areas with the lowest rates of competitive bids as Tampa, Fla. (16.7 percent); Nashville, Tenn. (20.8 percent); Fort Lauderdale, Fla. (21.7 percent); West Palm Beach, Fla. (25 percent); and Lake County, Ill. (27.6 percent).