In another sign that the red-hot housing market may be returning to earth, the number of houses caught up in buyers’ bidding wars has fallen to a 2021 low. According to aRedfin analysis, 58.8% of home offers generated a competition among buyers. That’s down from April’s peak of 74.3 percent.
Redfin found that more than half of its agents still face challenges from other bidders on home offers, but that number is inching down. In July, 62.1% of offers written had competition for the home.
Though it’s down, the number remains high, rivaling August 2020’s 59.4% bidding-war rate.
Home prices are cooling as potential buyers back away from soaring prices and more inventory arrives on the market. Forbearance expirations may add even more homes to the market in the next month, which could force prices even lower.
“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,” Nicole Dege, a Redfin real estate agent in Orlando, FL, said.
The bidding-war rate in her market dropped to 57.5% in August from 78.9% in July.
“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.”
Here are more highlights from the report:
- Highest bidding-war rate in the areas analyzed: Raleigh, NC (86.7%), followed by San Francisco and San Jose (70.7%), Tucson (70.5%), Cincinnati (70.4%), and Salt Lake City (68.1%).
- The lowest rate was Oklahoma City at 35.7%, a steep drop from its July 2021 rate of 60.9%.
- Other low-scored cities with significant differences from July include Sarasota (-20.4%) and Charleston (-24.7%).