Buying a house? More often than not, you may face some competition.
Redfin reports that 54.5 percent of offers on its homes faced bidding wars last month – down slightly from 57.3 percent in July. It is the fourth straight month with more than half of offers facing competition.
“The market is on fire. There just isn’t enough on the market to supply the huge demand for homes,” San Diego Redfin agent Lisa Padilla said. “A lot of military buyers are trying to take advantage of the low interest rates for VA loans. Anything on sale for less than $600,000 has multiple offers, and sometimes they’re getting more than 20 offers. Only condos are a little slow, as most buyers want a home with a yard.”
San Francisco, San Diego and Salt Lake City are the three most competitive markets, with roughly 65 percent of Redfin offers involved in bidding wars, while nearly 60 percent of offers faced competing bids in three of the four most popular destinations for Redfin.com users who looked to relocate in July: Sacramento (57.8 percent), Phoenix (56.5 percent) and Austin (58.2 percent).
“The pandemic-driven trend of people moving away from densely packed cities toward more affordable and spacious regions means homes in places like Sacramento and Phoenix are becoming nearly as competitive as the Bay Area,” Redfin chief economist Daryl Fairweather said. “Low mortgage rates are motivating homebuyers who are thinking of moving to go through with it. I expect competition to continue picking up in more affordable parts of the country.”
As for types of properties, 56.6 percent of single-family homes were part of a bidding war, followed by townhouses at 54.7 percent and condos at 41.3 percent.
Homes priced between $600,000 and $800,000 were most competitive in August, with 58.4 percent of offers for those homes encountering bidding wars, followed closely by homes priced between $1 million and $1.5 million (58.2 percent). More than half of homes in all price ranges below $1.5 million faced bidding wars, compared to 44.7 percent of homes priced above $1.5 million.