In August, 58.8% of home offers written by Redfin agents faced competition—a record low for 2021, according to a new report from Redfin real estate brokerage. That’s down from a revised rate of 62.1% in July and a peak of 74.3% in April. It’s also slightly lower than the August 2020 bidding-war rate of 59.4%.
While sellers continue to have the upper hand, buying a home has become slightly easier this summer as the country’s acute shortage of homes for sale is no longer intensifying and the market has undergone its typical seasonal slowdown. Home-price growth is stabilizing following months of record gains, and measures of competition aside from the bidding-war rate are also losing steam. For example, 50% of homes sold above their list prices during the four weeks ending Sept. 5, down from a peak of 55% in July. Of the homes that went under contract during that period, 47% had an accepted offer within the first two weeks on the market, down 9 percentage points from the 2021 peak set in March, according to a news release.
“Sellers are still pricing their homes very high, but a lot of buyers have had enough and are no longer willing to pay the huge premiums they were six months ago. Instead of 25 to 30 offers on turnkey homes, we’re now seeing five to seven,” said Nicole Dege, a Redfin real estate agent in Orlando, FL, where the bidding-war rate dropped to 57.5% in August from 78.9% in July. “Buyers are getting a bit more selective. I have one seller who recently put his four-bedroom single-family pool house on the market, but the roof was shot. He had to lower his asking price to $423,000 from $427,000 and agree to spend around $7,000 to replace the roof in order to attract bidders. Six months ago, he would have easily been able to sell that home as-is without dropping the price.”
Raleigh and San Francisco Have the Highest Bidding-War Rates
Raleigh, NC had the highest bidding-war rate of the 48 U.S. metropolitan areas in this analysis, with 86.7% of offers written by Redfin agents facing competition in August. Next came San Francisco/San Jose, at 70.7%, and Tucson, AZ, at 70.5%. Cincinnati and Salt Lake City rounded out the top five, with bidding-war rates of 70.4% and 68.1%, respectively.
“Sellers remain in control, but the next month or two will be very telling,” said Raleigh Redfin agent Stacey Delgado. “The market has just started to cool down over the last couple of weeks, which isn’t surprising because kids are heading back to school. Still, there are parts of the city that remain fiercely competitive, like the Research Triangle, which is Raleigh’s tech hub and has highly-rated schools. Out-of-state buyers who are flush with cash and can work remotely continue to flock there and bid up home prices.”
To view the full report, including charts and methodology, please visit here.