Nationwide, 59.6 percent of home offers written by Redfin agents in December faced bidding wars, according to a Redfin report. That’s the lowest share in 12 months, down from a revised rate of 61.3 percent in November, but up from 54 percent in December 2020.
While the bidding-war rate has fallen from its pandemic peak of 74.6 percent in April 2021, the housing market remains quite competitive as house hunters grapple with a record shortage of homes for sale, according to Redfin.
“Buyers should anticipate that they may not win a house until their sixth or seventh bid. If you’re the type of person who falls in love with a house, this is not your market,” Redfin New York Team Manager Candace Evans said in a release. “If you show a house to 10 buyers, you’ll probably get eight offers. 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. The house ultimately received over 10 offers and went for well above the asking price.”
More than half of Redfin offers have faced bidding wars since May 2020. But with rising mortgage rates now making the homebuying process more expensive, some buyers may no longer be able to stretch their budgets to write offers competitive enough to win, Redfin said.
Nearly two-thirds (64.6 percent) of offers for homes priced between $800,000 and $1 million faced bidding wars in December, the highest share of any price bucket. Next came homes in the $1 million to $1.5 million range (62 percent), followed by homes priced over $1.5 million (61.7 percent).
The lower price buckets were competitive as well, with more than 55 percent of offers for homes priced between $200,000 and $800,000 facing bidding wars.
Townhouses were the most competitive property type, with 62 percent of offers facing competition, followed by single-family homes, at 61.3 percent. Next came multi-family (54.7 percent) and condos (53.3 percent).
Salt Lake City had the highest bidding-war rate of the 37 metros that Redfin analyzed, with 74 percent of offers written by Redfin agents facing competition in December. Next came Tucson, Ariz., at 73.1 percent, San Diego at 71.1 percent, Virginia Beach, Va., at 70.6 percent and Seattle at 70 percent.
“I’ve been working with two clients since October and finally got them under contract after they lost out on seven other homes,” Portland, Ore., Redfin agent said Jennifer Ciacci said. “I haven’t seen inventory this low since I started in real estate. Buying a home today is emotionally exhausting, but house hunters aren’t giving up. I’m seeing buyers jump in and write a few offers, lose bidding wars and then retreat for a bit. But they usually end up coming back once they’ve had a chance to lick their wounds.”