In November, 59.5% of home offers written by Redfin agents faced competition, representing the lowest level in 11 months, according to a new report from Redfin. That’s down from a revised rate of 61.8% in October and a pandemic peak of 74.6% in April, but up slightly from 57.3% in November 2020.
The housing market remains hotter than normal due to record-low mortgage rates and an acute shortage of homes for sale. But home buyer demand seems to be following a typical seasonal pattern by starting to slow as the year winds down, according to Redfin’s chief economist, Daryl Fairweather.
“It’s typical for competition to ease in the winter months as more families take time off for the holidays,” observes Fairweather. “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.”
Richmond, Va., had the highest bidding-war rate of the 44 U.S. metropolitan areas in this analysis, with 80% of offers written by Redfin agents facing competition in November. Next came Salt Lake City at 73.8% and San Diego at 72%. Honolulu and Dallas rounded out the top five, with bidding-war rates of 71.1% and 70.6%, respectively.
“Bidding wars are still happening, but buyers are starting to get more breathing room,” comments 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. 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.”
View the full report here.