According to a Redfin report [1], 49.4% of all offers in May faced a bidding war—an uptick from April’s 43.9%.
Experts pointing to the fact that while sellers are wading back into the housing market as the country begins to slowly reopen following the COVID-19 lockdown, buyers equally anxious to jump back into the waters of home purchasing, creating a conundrum of a housing shortage of epic proportions.
The housing shortage is starkly different than just a year ago, with the number of listings available for purchase on the market down 18.9% this May versus May 2019’s numbers. Redfin Lead Economist Taylor Marr gave his take on the current housing shortage: "Bidding wars also jumped in May because homebuyers felt they were starting to get more clarity around where the economy was headed, with cities around the nation lifting stay-at-home orders. This gave house hunters more confidence to compete.”
Marr then added a comment of caution regarding getting too optimistic yet: “But with coronavirus cases back on the rise in many states, only time will tell whether that confidence is sustainable.”
The 24 metro areas that the Redfin analysis included revealed telling insight on what is occurring across the nation in specific regions. Specifically, 11 of the metro areas studied reported the vast majority of Redfin offers there being embroiled in bidding wars during the month of May, this versus a mere eight metro areas’ bids facing such fierce competition in the previous month of April.
Many Redfin agents were recorded as declaring that competition among buyers has really heated up significantly just this past month. These same agents also divulged that many of these bidding wars involved offers involving all-case transactions—criteria which has clearly only served to increasingly cause an increase in price tags for total house sale as well.
Among the 24 metro areas included in the survey, Boston; Dallas; and Washington D.C., experienced the highest competition among buyers making bids. Other metros that also placed high on this list were Salt Lake City; Denver; Seattle, Austin, Texas; San Francisco; San Jose; Minneapolis; Los Angeles; and Portland.