Redfin, which has been tracking bidding war activity since April 2020, considers a bidding war to exist when a buyer faces at least one competing offer.
A combination of factors led to the frenzied demand seen earlier this year, including extreme shortages of homes for sale in many markets, low mortgage rates that pushed buyers to move quickly before rates might increase and new mobility because of a more widespread ability to work remotely. Rising prices also enticed some buyers to enter the market out of concern over future increases that could impact affordability.
In most years, buyer demand slows in late summer and early fall as children begin the school year. But Redfin’s analysts also point to buyer fatigue over high listing prices causing some buyers to drop out of the market. A slow trickle of more homes becoming available for sale could also relieve the pressure on buyers this fall.
Another indication of an easing housing market includes how many homes sold above their list prices, which dropped to 50 percent during the four weeks ending Sept. 5, down from 55 percent in July. During that same period, 47 percent of homes sold within two weeks of being listed for sale, down from 56 percent in March 2021, the peak for the year.
However, bidding wars are still prevalent and the majority of offers faced competition in 38 of the 48 metro areas studied by Redfin. Raleigh, N.C., had the highest percentage of bidding wars in August, with 86.7 percent of offers written by Redfin agents facing competition, up from 71.3 percent in July and up from 46.3 percent in August 2020.
In the Washington, D.C. region, 54.6 percent of buyers faced competition in August, down from 60.7 in July and from 67.5 percent in August 2020.
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