Redfin chief economist is not surprised
While the housing market remains hotter than ever before, homebuyer competition hit its lowest level in almost a year, according to a Redfin report.
The report showed that the bidding-war rate dropped from the revised rate of 61.8% in October to 59.5% in November. That’s down from the pandemic peak of 74.6% in April, but up slightly from 57.3% in November 2020.
Redfin chief economist Daryl Fairweather noted that it is typical for the hot housing market to cool down in the winter months as more families take time off for the holidays.
“While competition waned in November, it was still higher than a year earlier, which is a sign that demand will be strong in the new year,” he said.
Read next: Revealed – what’s happened to purchase mortgage applications?
Richmond, Va. saw the highest bidding-war rate of the 44 US metros in Redfin’s analysis, with 80% of offers written by Redfin agents facing competition in November. Salt Lake City and San Diego followed at 73.8% and 72%, respectively. Honolulu (71.1%) and Dallas (70.6%) rounded out the top five.
“Bidding wars are still happening, but buyers are starting to get more breathing room,” said Jill Thompson, a Redfin agent in Indianapolis, where the bidding-war rate dropped to 36.8% in November from 73.6% in October.
“A few months ago, the typical home was going for $15,000 to $20,000—sometimes even $50,000—over the asking price. Buyers were paying cash, waiving inspection contingencies, and overlooking necessary repairs in order to win,” Thompson continued. “Today, buyers are more cautious about overpaying, aren’t waiving inspections as freely as they were in the spring, and feel less of a rush to commit to a house after the first tour.”
