Real Estate Bidding wars!

An offer is considered part of a bidding war if an agent reported that it received at least one competing bid.

The bidding-war rate is rising even as the coronavirus pandemic and the shaky economy that comes with it continues to spread across the country.

“Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades,” said Redfin economist Marr. Lower mortgage rates make for lower monthly housing payments, which encourages buyers to enter the market and make higher offers on homes. The number of homes for sale nationwide in June was down 21.3% from the year before, bringing inventory down to its lowest level since at least 2012 on a seasonally adjusted basis. The number of new listings was down 12% year over year.

Single-family homes were most likely to be part of a bidding war in June, with 56.2% of Redfin offers facing competition, followed closely by townhouses (54.2%). By contrast, 40.5% of condos faced bidding wars. Single-family homes face a bigger supply constraint than townhouses or condos, with supply in June down 25% since the year before.

“This is the most competitive real estate market I can remember,” said Gulden, who has been an agent since 2012. “There are multiple bids on nearly every property I see, whether I’m representing the buyer or the seller. I’m seeing the most competition in the suburbs, where homes are selling in a matter of days. Sellers don’t want homes to be on the market any longer than necessary because of COVID-19, so they’re setting offer deadlines, which create a frenzied, competitive atmosphere.”

“A buyer contacted me on Saturday night a few weeks ago to put in an offer on a house with a deadline at 10 a.m. on Sunday,” Gulden continued. “By Sunday morning, the house had five offers. Despite my client offering about $20,000 over the asking price with no contingencies, the house went to someone else who offered even more.”

“In the last month, my clients have made very few offers that haven’t been part of a bidding war,” Godwin said. “Buyers need to waive contingencies for a chance at winning a bidding war. I’ve noticed that sellers are providing inspection reports to avoid additional people coming into their home, and that encourages more offers because potential buyers don’t need to make the financial commitment of paying $500 to $800 for pre-inspections on every house they like.”

In this market you need an agent with the experience and knowledge to help you navigate the home buying process. Give us a call today and #getmoving!

~Till Next time