Bidding wars have been cooling off quickly, at least according to agents at one brokerage with a national reach.
Seattle-based Redfin reported Monday that only 60 percent of the offers its agents wrote in July faced competition from at least one other buyer.
This result continues a dramatic fall from this year’s red-hot spring peak, when 74 percent of the brokerage’s offers were part of a bidding war. It also brings bidding wars back within striking distance of where they were in the fall of 2020, before buyer competition started to skyrocket in January.
One Redfin agent said he’s now seeing five to eight offers on a typical home rather than the 25 he had grown accustomed to. Initial offers are still above listing price, but only a fraction of that gap now remains, he said.
“Buyers are pushing back,” Scott Mercer, the Sacramento-based agent, said in the report. “They’ve even started including appraisal contingencies again and making requests for repairs — things that were pretty much unheard of last year.”
The decline in bidding wars has coincided with a return to more normal seasonal patterns.
Although inventory remains abnormally low throughout the country, the number of homes for sale has started to slowly tick back up in recent weeks. Zillow’s records show the number of homes for sale rose 3 percent from May to June, but remained down 42 percent from their levels at the same time of year in 2019.
Competition typically starts to ease around this time of year as well, another potential seasonal factor in the cooling market.
Mercer’s market, Sacramento, remained among the most competitive among the 47 metro areas that Redfin analyzed. The share of Redfin offers with a bidding war in Sacramento dropped from 77 percent in June to 73 percent in July, but remained the sixth-highest in the group studied.
“A slowdown in the migration of tech workers from the Bay Area is the biggest factor driving the drop in competition in Sacramento,” Mercer said in the report. “Sacramento exploded in popularity among remote workers during the pandemic. People coming from San Francisco were like kids in a candy store here because home prices were so inexpensive in comparison.”
Two Colorado metros were even more competitive. Fort Collins led the nation in bidding war activity among Redfin offers with 77 percent in July, the brokerage reported. Colorado Springs clocked in at 73 percent.
Bidding wars were also involved in roughly 3 of 4 offers written by the company’s agents in Orlando, Nashville and Honolulu.