The competition in the housing market is showing some signs of easing. More markets are reporting price cuts and fewer bidding wars. That may open the door to some priced-out home buyers this fall.
Sixty percent of offers written by real estate professionals nationwide faced competition in July, the lowest level since January, according to an index that measures competing offers among Redfin real estate professionals. The bidding war rate is also significantly down from a pandemic peak of 74% in April. An offer is considered part of a bidding war if at least one competing offer is made.
“Competition has started to slow in the last three weeks,” said Scott Mercer, a real estate professional with Redfin in Sacramento, Calif. “We’re now seeing five to eight offers on homes instead of 25, and they’re coming in $5,000 to $10,000 above the listing price instead of $50,000 to $60,000. Buyers are pushing back. They’ve even started including appraisal contingencies again and making requests for repairs—things that were pretty much unheard of last year.”
With more listings appearing, buyers more homes to choose from, which has helped to reduce competition. Also, competition in the housing market typically eases in the summer following the spring homebuying season. However, nothing about the housing market during the pandemic has necessarily followed historical seasonal patterns.
Home prices remain high, which may be pricing out some potential buyers, too. The National Association of REALTORS® reports the median existing-home price for all housing types in June was $363,300, which is up 23.4% compared to a year earlier.
The markets with the largest share of bidding wars in July, according to Redfin’s index, were:
- Fort Collins, Colo.: 77.3%
- Orlando, Fla.: 77%
- Nashville, Tenn.: 74.6%
- Honolulu: 74.1%
- Colorado Springs, Colo.: 73.2%
- Sacramento, Calif.: 72.9%
- Charleston, S.C.: 71.4%
- Charlotte, N.C.: 70.8%
- San Diego: 69.8%
- Las Vegas: 68.6%
- Tucson, Ariz.: 68.4%
- Tampa, Fla.: 66.7%
- Denver: 66.5%
- San Francisco/San Jose: 66.3%
- San Antonio: 66.3%