Nearly two-thirds (64.0%) of home offers written by Redfin agents in March faced competition, up from a revised rate of 62.1% in February. That’s the 11th-consecutive month in which more than half of Redfin offers encountered bidding wars, and the second month in a row in which the bidding-war rate exceeded 60%.
An offer is considered part of a bidding war if a Redfin agent reported that it received at least one competing bid. This data is subject to revision.
Homebuyers have endured ruthless bidding wars during the coronavirus pandemic as low mortgage rates and remote work have compelled scores of Americans to relocate and buy homes. This has exacerbated an existing shortage of homes for sale, with buyers far outnumbering sellers. Bidding wars are so intense that a record 46% of homes are selling within one week of hitting the market, up from 30% a year ago, a recent Redfin report found.
Competition has ticked even higher in the last couple of weeks as Americans look ahead to a return to normalcy and back-to-school season, according to Las Vegas Redfin real estate agent Lori Garlick.
“In today’s market, buyers need to pull out every single stop they possibly can. Competition is escalating in part because it’s almost summer and families want to lock down homes before the next school year starts and their kids have to head back to the classroom,” Garlick said. “This typical spring homebuying behavior is making a hot housing market even hotter.”
Garlick continued: “A lot of my clients recently sold their houses to take advantage of the seller’s market and the surge in prices, and are now frantically searching for their next home. I’m advising them that if they want to win, they need to at least waive the appraisal contingency and agree to pay the difference in the event that the appraisal comes in lower than their offer.”
Salt Lake City had the highest March bidding-war rate of the 42 U.S. metropolitan areas in this analysis, with 87.1% of offers written by Redfin agents facing competition. Next came Pittsburgh at 82.0% and Boise, ID at 81.5%. Virginia Beach, VA and Las Vegas rounded out the top five, at 80.9% and 78.1%, respectively.
In the Las Vegas neighborhood of Brookshire, Garlick recently helped a client beat out 32 other bids on a four-bedroom home overlooking the Las Vegas strip.
“We offered $64,000 over the $645,000 asking price, but still didn’t have the highest bid,” Garlick said. “We won because we sweetened our offer with a bunch of extras. We agreed to pay the property transfer tax and the other fees typically covered by the seller, and on top of that, we said we’d pay up to $2,000 of their moving expenses.”
Single-family homes had a bidding-war rate of 66.5% in March, making them the property type most likely to encounter competition. Townhomes weren’t far behind, with a bidding-war rate of 65.6%. While condos were less competitive, more than half (51.1%) of Redfin offers still faced competition.
Single-family homes have attracted relatively fierce competition during the pandemic because homebuyers have been seeking out space and privacy, but townhomes may be starting to catch up. In March, the bidding-war rate for townhomes trailed that of single-family homes by less than a percentage point, compared with a 5.2-percentage-point gap in February.
“Townhouses—especially ones with outdoor space—are starting to see more competition because it has become so difficult for buyers to win single-family homes,” said Heather Stovall, a Redfin real estate agent in Seattle. “My clients recently accepted an $890,000 offer on their Fremont townhouse after listing it at $795,000. The property, which has a really nice deck, a built-in outdoor kitchen and views of Mount Rainier, received a total of eight bids.”
Homes listed between $800,000 and $1 million were the most likely to attract bidding wars, with 69.4% of Redfin offers facing competition in March. Next came homes listed between $1 million and $1.5 million, with 68.6% of offers seeing bidding wars.
High-end homes are bringing in multiple offers because affluent Americans, who are more likely to have the flexibility to work remotely, have been relatively unscathed by the pandemic driven economic downturn. With cities shut down, wealthy families have been retreating to vacation towns and buying up second homes.
Homes listed for less than $200,000 were the least likely to see competition, but still had a bidding-war rate of 59.1%.
To be included in this analysis, metros must have had at least 20 offers recorded by Redfin agents in March 2021 and at least 20 offers recorded by Redfin agents in February 2021.
