Homebuyer bidding wars hit yearly low on 2 developments
Fort Collins, Colorado faced the highest number of bidding wars in July
Competition for U.S. homes is waning, with the industry facing the fewest number of bidding wars since January, according to a new report.
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In July, 60.1% of offers written by Redfin agents faced bidding wars, down from a revised rate of 66.5% in June and well below the "pandemic peak of 74.1% in April," according to a report from Redfin.
Redfin said the decrease in homebuying competition last month is because prices are finally "stabilizing" as more homes hit the market.
The increase in the U.S. housing supply is giving homebuyers more options, effectively easing competition. It may come as a relief to potential homebuyers who faced "months of fierce competition and soaring prices that were driven by an intensifying housing shortage."
A sold sign sits in front of a house in Brighton, N.Y. (AP Photo/Ted Shaffrey / AP Newsroom)
Although it may be the least competitive month for the market since January, it's still higher than July 2020 when there was a 57.9% bidding-war rate, according to the report. At the time, the housing market was in the midst of recovering from a prolonged shutdown driven by the pandemic, the technology-powered real estate brokerage said.
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Still, some markets are only seeing five to eight offers on homes compared to the previous 25.
"Competition has started to slow in the last three weeks," Scott Mercer, a Redfin real estate agent in Sacramento, said. "We're now seeing five to eight offers on homes instead of 25, and they're coming in $5,000 to $10,000 above the listing price instead of $50,000 to $60,000."
HOME BIDDING COMPETITION EASED IN JUNE AS BUYERS BECOME FATIGUED
While Sacramento "exploded in popularity among remote workers" in 2020, the area is now facing a "slowdown in the migration of tech workers from the Bay Area," according to Mercer.
The markets still facing the most bidding wars are Fort Collins, Colorado, with a bidding-war rate of 77.3% in July, followed by Orlando, Florida, and Nashville, Tennessee, with bidding-war rates of 77%, and 74.6%, respectively.