A housing shortage that has increased since the pandemic began in March means buyers continue to face steep competition for the limited supply of homes.
A new study from Clever Real Estate shows that 42% of buyers who purchased a home between January and May were in a bidding war. Further, the brokerage Redfin reported this week that half of its agents’ offers faced competition in May, up from 44% in April.
Competition from buyers making all-cash offers is also driving up competition.
Redfin reports that the Boston metro area saw the highest rates of competitive offers, with 64% of its agents there reporting a bidding war in May.
“We’re seeing a frenzy,” says Delince Louis, a Redfin real estate professional in Boston. “Any home below $500,000 is receiving multiple offers. We just don’t have the supply to meet the demand. … ‘Home’ means more right now than ever, and we’re seeing this new sense of urgency among buyers to find places with more privacy.”
In Dallas, nearly 61% of Redfin agents reported facing a bidding war, followed by 57% in Washington, D.C. Other metros seeing bidding war rates above 50% were Salt Lake City; Denver; Seattle; Austin, Texas; San Francisco/San Jose, Calif.; Minneapolis; Los Angeles; Portland, Ore.
Will the buying frenzy last? “Bidding wars 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,” says Redfin lead economist Taylor Marr. “This gave house hunters more confidence to compete. But with coronavirus cases back on the rise in many states, only time will tell whether that confidence is sustainable.”
Source: “42% of People Who Bought Homes During the Pandemic Engaged in a Bidding War,” HousingWire (June 17, 2020) and “Bidding Wars Climb in May as Coronavirus Intensifies Housing Shortage,” Redfin blog (June 15, 2020)
