House hunters nationwide, especially those seeking high-quality homes, are facing fierce competition in a spring market where it's not unusual for desirable properties to receive 20 or more bids.
About three-quarters, or 72%, of offers written by Redfin agents in April faced competition, according to a new report from Redfin's data team. That's up from a revised rate of 66.7% in March and 44.9% in April 2020 (authors note that April 2020 was unusual due to the COVID-19 pandemic).
While competition is increasing, it's nothing new—bidders have been battling one another throughout the pandemic, as they face heightened demand for larger single-family residences, dwindling inventory, and increased desirability brought on by very low interest rates.
Redfin reports that buyer battles today are more intense than any of its agents have seen in the past, with the most attractive houses receiving dozens of offers, selling at breakneck speed and for tens of thousands of dollars above the asking price.
Rapid sales and buyers' willingness to pay so much more than the listed price is a sure sign of a market that doesn't seem to be cooling anytime soon, according to real estate agent Kristin Lopez, in Boise, Idaho (which is among the most competitive markets).
"Bidding wars are intensifying. In March, we were seeing three or four offers on a home. Now, we're sometimes seeing more than 20," said Lopez. "The homes for sale today are high-quality, desirable homes—a dynamic that's fueling more competition. This is a contrast from the winter when most properties coming on the market were bottom-of-the-barrel homes. The difference is that today's sellers are folks who want to sell, whereas many sellers back in the winter had to sell and didn't have time to do any upgrades."
Lopez points out that cash offers tend to win (bidding) wars in Boise, as across the country, which means "buyers without deep pockets are frequently getting outbid," she said.
"Cash is on the rise in part because there are more investors in the market, but also because there are a lot of families moving here from more expensive parts of the country. Most buyers I work with are from out of state, and many of them have the cash to compete because they just sold their home in California or Seattle."
Redfin broke competitiveness down by metro area in its chart below. The full report is on Redfin.com.
|U.S. Metro Area||Share of Redfin offers that faced bidding wars in April 2021||Share of Redfin offers that faced bidding wars in March 2021||Share of Redfin offers that faced bidding wars in April 2020|
|Salt Lake City, UT||83.5%||86.1%||57.5%|
|San Diego, CA||83.3%||78.7%||53.8%|
|Virginia Beach, VA||76.7%||83.0%||45.0%|
|Urban Honolulu, HI||74.4%||66.2%||—|
|San Francisco / San Jose, CA||73.2%||77.8%||54.2%|
|San Antonio, TX||71.3%||53.2%||46.2%|
|Las Vegas, NV||71.1%||81.0%||55.0%|
|Colorado Springs, CO||66.2%||77.2%||—|
|Los Angeles, CA||64.4%||70.6%||53.6%|
|New York, NY||61.1%||63.7%||47.1%|
|Cape Coral, FL||59.1%||51.9%||—|
|New Orleans, LA||58.6%||46.4%||—|
|Oklahoma City, OK||56.8%||71.4%||—|