How To Lure Would-be Buyers Into Bidding Wars
November was another competitive month in the housing market. According to a new data report from Redfin, about 54% of homes on their site were involved in a bidding war.
What could have sparked the bidding war?
Bidding war data dips slightly in November compared to October. Nevertheless, November still represents the 7th-straight month in which more than half of Redfin’s offers are involved in bidding wars.
A bidding war happens when at least two or more offers are received for one house.
U.S homebuyers face tighter competition this year. This is mainly due to historically low mortgage interest rates and shortage of home supply. The suddenly increased migration attributed to remote working during the pandemic has added to the contributing factors.
The most intense bidding wars are concentrated on the West Coast.
There were 24 major metro areas analyzed for the report. Below are the top 10 areas that have received the highest bidding-ware rate;
- San Diego 75.3%
- Denver 66.7%
- Combined Bay Area’s metros of San Francisco and San Jose 65.8%
- Seattle 60.9%
- Sacramento 60%
- Los Angeles 59.5%
- Washington, D.C 58.7%
- Austin 58.1%
- Phoenix 57.7
- Salt Lake City 56%
The report also highlights the property types which received the bidding wars. Single-family homes generated the highest level of bidding wars at 57.3% while townhouses received 48.76% and condominiums at 38.3% from the overall offers.
According to Redfin Chief Economist Daryl Fairweather, buyers are not going to compete for homes that have been sitting on the market. Would-be buyers will usually only get into a bidding war for a newly-listed, desirable home that is move-in ready.
Unfortunately, the bidding wars will only pump up what seems to be already high price tags on any available property.
In conclusion, the supply-and-demand imbalance fueled by the historically low mortgage interest and the “move-in ready homes
