For the ninth consecutive month, more than half of all offers authored by Redfin real estate agents faced a competing bid, according to a monthly survey by Redfin.
The COVID-19 pandemic and resulting surge in remote labor, for many Americans, continues to prompt a search for larger homes and relocation to more spacious environs, Redfin reports. Pending home sales were up 28% annually in the week ending January 24, while the number of homes for sale was down 36%.
Mortgage rates remain at historic lows, with the average 30-year fixed-rate at 2.73% in the week ending February 4, which is "another motivating factor for buyers," researchers say.
“The number of homes for sale is at an all-time low and the supply shortage only seems to be getting worse,” said Redfin Chief Economist Daryl Fairweather. “With so few new listings hitting the market, I expect bidding wars to become more common and involve even more potential buyers as we head into the spring homebuying season. The best thing buyers can do is prepare: Prepare to see homes quickly as soon as they hit the market; prepare by talking to a lender and getting preapproved, and prepare by talking to your agent about how much a home you like is worth so you can go into a bidding war with your strongest offer tactics, but know when to back away if the price escalates more than you’re willing to pay.”
The report shows Salt Lake City, San Diego, and the Bay Area have seen the largest share of such competition.
One agent from California calls the competition "fierce" and says "nearly everything is selling in five to six days.”
“I’m advising my sellers to get a hotel for the weekend while potential buyers tour their house, and we review offers on Monday," said San Diego Redfin agent Charles Wheeler. "Some homes get 30 to 40 tours in just two days and more than 10 offers. I tell buyer’s agents to give me their highest and best offers right off the bat, because the sellers are going to be so inundated they’ll only consider the top three or four offers. Buyers shouldn’t expect to negotiate on price right now—if they want to win a house, they need to pay the asking price or more.”