More for-sale inventory and a limited return to on-site working have resulted in fewer bidding wars.
Buyers Putting the Brakes on Competition
According to Redfin, 60% of homes experienced bidding wars in July whereas 67% did in June. Competition for homes among potential buyers in July 2021 still outpaced competition among buyers in July 2020 BUT still, the rate of competition in July 2021 was the lowest since January 2021.
There were several factors contributing to some buyers putting on the brakes in July. First of all, there were more for-sale homes on the market. Buyers simply had more choices…more choices translated into less pressure to buy “right now.” Also, fewer people were migrating from major cities to smaller, less expensive markets as large employers began talking about on-site re-openings.
Third, the housing market was seeing a premature slow-down in July that usually happens in August as families take vacations and prepare for the new school year.
Market Beginning to Normalize
Redfin looked at 47 metro areas for this report and discovered the following findings:
- Agents are seeing 5 – 8 offers on homes rather than 20 – 25
- Buyers are coming in at $5,000 – $10,000 above listing price rather than $50,000 – $60,000
- Buyers are including such things as appraisal contingencies and requests for repairs – items that were “…pretty much unheard-of last year,” according to Scott Mercer, a Sacramento-based agent.
Markets with Most Bidding Wars
Housing markets with the most bidding wars in July included these five:
- Fort Collins CA with a rate of 77.3% of deals facing competition in July
- Orlando FL with a rate of 77% in July
- Nashville TN with a rate of 74.6%
- Honolulu with a rate of 74.1%
- Colorado Springs CO with a rate of 73.2%
Sacramento CA, with its influx of buyers from the Bay Area, slipped to sixth place, down from a rate of 77.2% in June to a rate of 72.9% in July.
Even markets such as Charleston SC and Sarasota FL with the highest rates of bidding wars in June saw their rates drop in July. Charleston’s bidding war rates fell from 82.9% in June to 71.4% in July and Sarasota’s rates fell from 87.0% in June to 62.1% in July.
Markets with the Least Number of Bidding Wars in July
Markets with the least competition for houses via bidding wars included:
- New Orleans with a rate of 35% in July
- Richmond VA with a rate of 38.5%
- Cleveland OH with a rate of 38.7%
Thanks to Redfin and Mansion Global.