Agents from a major brokerage reported the bidding environment in June was less competitive as home inventory saw a modest bounce back.
Seattle-based Redfin said 65 percent of its agents’ home offers faced competition last month, down from 72 percent the month before. Bidding wars remained more prevalent than they were in June of last year, when the housing market was only beginning to recover from an early pandemic slowdown and 57 percent of Redfin offers faced competition.
New listings were up 4 percent year over year, one possible reason why bidding wars have become less prominent.
But some Redfin agents see another possible factor contributing to the cooldown: buyer fatigue.
“The first half of this year was red hot—it was almost impossible to get an offer accepted,” Laura Sechrist Molenda, a Redfin agent in California, said in a news release. “But recently, we’ve started to see buyers get cold feet.”
Molenda added she recently had two buyers win bidding wars because, in each case, a competitor backed out of the process.
“The market is still competitive, but buyers are more trepidatious than they were at the start of 2021, and less willing to pull out every stop in order to win,” Molenda said in the statement.
With more properties to bid on and more buyers possibly dropping out of the race, the market may be shifting a bit away from its recent seller-friendly extremes.
Agents at the brokerage have also reported more buyers requesting contingency clauses.
“Two months ago, sellers were getting 10 to 15 offers within 48 hours and buyers were waiving every contingency,” Shauna Pendleton, an agent in Boise, Idaho, told a Redfin data reporter. “That’s no longer the case.”
In its report, Redfin points out that one reason for this reduced competition may simply be seasonal. It’s not unusual for bidding wars to cool down later in the summer, the report states.
And in some cities, bidding wars on the more affordable end of the market may not be going away any time soon.
“It’s still really competitive when there’s a lower-priced home in a very-sought after area,” Seattle agent Kristi Miller said in the release. “But bidding wars are starting to slow for mid- and higher-priced homes.”
The year-over-year uptick in inventory is a promising sign for a market that had plunged to all-time lows earlier this year.
Bidding wars were especially rare in New York City — where only 53 percent of Redfin offers faced competition. Just over 57 percent of offers that Redfin agents wrote in Chicago had competitors. The two least competitive bidding environments the brokerage reported were Miami at 49 percent and Colorado Springs at 43 percent.