As housing inventory continues to dwindle, competition with buyers and agents has reached a high.
According to a recent realtor.com report, the nation’s inventory of homes for sale sank 14% in January, falling to the lowest level since at least 2012.
Now, the latest survey from Redfin shows the real estate agents are also feeling the crunch. The survey, which went out to more than 500 agents across the country, showed that the majority faced competition in January.
The highest rate of competition was in the San Francisco Bay Area, where agents estimated that more than 90% of the time there were multiple offers on homes their clients were bidding on, even though the median home price was listed well above $1 million.
“Low mortgage rates have brought buyers back to the housing market, but a lack of listings means buyers are having to compete with one another to secure a sale and lock in a mortgage rate,” said Redfin Chief Economist Daryl Fairweather. “This competition pushes up prices, which means that even though buyers can get a good deal on a mortgage now they are often paying a higher sticker price.”
Out of the 24 markets that Redfin looked at, homebuyers in 19 of the markets faced competition more often than not.
Least prone to the competition? Greenville, South Carolina.
Meanwhile, in the Bay Area, buyers are going to extreme lengths to win a home, the survey showed.
“After missing out on one home due to a bidding war, my clients were much more aggressive on their next offer,” said Redfin San Jose real estate agent Jennifer Tollenaar. “In order to beat 24 other offers, they put 50% down, wrote a great letter to the sellers and removed all contingencies. This was on a home with a purchase price of over $1.7 million.”
Similar to the Bay Area, Los Angeles is also a competitive market that has homes listed for longer periods.
“Not every home sells quickly and with multiple offers, but when my buyers are interested in submitting an offer it is almost always a home that has multiple offers,” said Redfin Irvine Real Estate Agent Liz Flesner.
Despite the West Coast seeing all of this competition, Philadelphia has homes on the market that attract the most bidding wars.
“One home I recently helped my clients win had been on the market since June and hadn’t been reduced in price since November,” said Redfin Philadelphia Real Estate Agent Brenda Beiser. “When we looked at it in mid-January, the agent told me there had been six other appointments the day before. By the time our offer went in that evening they had received two other offers.”