Redfin said a majority of offers submitted by its agents in January faced competition, as many areas across the country faced a severe housing shortage.
“Low mortgage rates have brought buyers back to the housing market, but a lack of listings means buyers are having to compete with one another to secure a sale and lock in a mortgage rate,” Redfin Chief Economist Daryl Fairweather said in a release.
“This competition pushes up prices, which means that even though buyers can get a good deal on a mortgage now they are often paying a higher sticker price,” Fairweather added.
Redfin’s survey indicated San Francisco had the highest rate of competition, with agents estimating that more than 90 percent of the time there were multiple offers on homes their clients were bidding on — despite the fact that the median home price there is still well above $1 million.
Redfin said Greenville, S.C., was the least competitive market during January.
“After missing out on one home due to a bidding war, my clients were much more aggressive on their next offer,” Redfin San Jose agent Jennifer Tollenaar said. “In order to beat 24 other offers, they put 50 percent down, wrote a great letter to the sellers and removed all contingencies. This was on a home with a purchase price of over $1.7 million.”
“In Phoenix, inventory is so low right now that one of my clients has run into bidding wars with more than 10 offers for three weekends in a row,” Arizona Redfin agent Thomas Wiederstein added. “Offering well above listing price isn't enough in today’s market. You have to do that, plus waive contingencies just to have your offer considered by sellers.”