Nearly half (49.7 percent) of home offers written by Redfin agents faced bidding wars in December, according to a report by the real estate brokerage.
Redfin said that figure is down from 55.9 percent in November, but still the eighth-straight month in which about half of Redfin offers encountered competition.
Additionally, Redfin said home prices increased 13.1 percent year-over-year in December, and home sales grew 16.2 percent.
“The housing market is unseasonably hot—it’s behaving like it normally does in the spring, with plenty of demand from homebuyers,” Redfin Chief Economist Daryl Fairweather said in a release.
“Typically, the vast majority of homes for sale in December are homes that have been sitting on the market because they’re overpriced or there’s a problem with the property,” Fairweather added. “This December, with so many Americans moving, scores of desirable homes hit the market—but not enough to satisfy insatiable demand from homebuyers. The result? Fierce bidding wars.”
According to the report, Salt Lake City had the highest bidding-war rate in December (75.6 percent); followed by San Diego (74.5 percent); San Francisco/San Jose, Calif. (67.4 percent); Seattle (65.3 percent); and Denver (58.4 percent).
“In Salt Lake City, every property gets into a bidding war unless it’s really overpriced,” Redfin Salt Lake City Market Manager Ryan Aycock said. “One of our agents just helped a buyer put in a bid for a $329,000 four-bedroom home in Taylorsville that received 19 other offers. To win, you have to offer 5 percent to 10 percent over the asking price and waive all of your contingencies.
“Buyers are very frustrated,” Aycock added. “They’re competing with out-of-state money. We had a client from Palo Alto who bought a 4,500-square-foot home on a half-acre for $600,000, and his mortgage payment was less than what he’d been paying in rent for his tiny California condo.”
Salt Lake’s City housing demand in December was fueled by a shortage of homes. Redfin said home supply in Salt Lake City was down 56.8 percent year-over-year in December, while home sales were up 14.6 percent. New listings in Salt Lake City in December were down 44.3 percent year-over- year in Salt Lake City. Nationwide, new listing were up 13.6 percent year-over-year in December.
Redfin said homes listed between $1 million and $1.5 million were the most likely to encounter bidding wars, with 60.3 percent of Redfin offers facing competition in December. Homes listed between $600,000 and $800,000 were the second most likely to have multiple offers, with 55.3 percent encountering bidding wars.
“Luxury homes in Utah are getting into bidding wars more frequently than they were before the pandemic,” Aycock said. “This is partially because folks are moving here from expensive cities and bringing their salaries with them, and partially because there are a lot of move-up buyers taking advantage of low mortgage rates and purchasing larger homes. Plus, a lot of people have actually saved money during the pandemic.”
During December, Redfin said single-family homes were the most likely property type to attract bidding wars, with 53.6 percent of Redfin offers encountering competition. That compares with a bidding-war rate of 46.1 percent for townhouses and 33.9 percent for condos.