The red-hot US housing market is a homebuyer battleground. More than 60.9% faced intense competition in February.
Redfin reported Thursday that the number of home offers encountered bid wars rose slightly to 60.9% from 59.3% in January. This was the 10th consecutive month that more than half of Redfin ‘offers were exposed to competition.
“The rise in mortgage rates is likely to lead to more bidding wars in the short term as home hunters quickly buy homes before rates rise any further,” said Daryl Fairweather, Redfin chief economist. “If mortgage rates rise significantly, some buyers will likely marginalize, which will slow competition in the long run.”
According to a recent Redfin poll, 17% of Americans would slow down their house search if mortgage rates exceeded 3.5%.
But right now, homes are still selling fast and fetching more than sellers are asking for. In February, the typical home that was sold in February was signed in 32 days – 32 days faster than February 2020 – and 36% of the homes were sold at more than the asking price.
“Every home I market for less than $ 700,000 sells in a day,” said Heather Kruayai, real estate agent at Redfin Jacksonville, Florida. “I recently listed a three bedroom single family home in Durbin Crossing that received 30 offers. I’ve never seen this in my life. We had to stop the demonstrations because the salespeople just couldn’t accommodate that many people coming through their house. The buyers called me themselves and asked me to pick up their listings. My client ultimately chose the bidder who had the highest bid and agreed to pay the difference if the valuation was below the contract price. “
Salt Lake City (92.9%) topped the list of the 24 subway areas with the highest bid warfare rate, followed by San Diego (84.4%) and Phoenix (78.1%). Denver and San Francisco / San Jose rounded off the top 5 with 76.4%.
Premium homes Listed between $ 1 million and $ 1.5 million were the most popular among homebuyers. 71.4% of Redfin offers were competitive in the last month. Single-family houses (63.7%) had a much higher bidding war rate than townhouses (58.5%) and condominiums (49.3%) by property type.