Home bidding wars drop to 15-month low – NMP
Nationally, 57.8% of real estate offers written by Redfin agents faced competition on a seasonally adjusted basis in May, the lowest level since February 2021, the tech-based real estate brokerage said.
Redfin’s report, based on data submitted by its agents, showed the May rate was down from a revised rate of 60.9% in April and from the pandemic peak of 68.8% in May 2021, a said Redfin. This is the fourth consecutive monthly decline.
The typical home in a bidding war received 5.3 bids in May, compared to 6.8 in April and 7.4 in May 2021, Redfin said.
Competition among homebuyers is cooling because rising mortgage rates and soaring home prices have made buying less feasible for many Americans, the company said.
The typical monthly mortgage payment for a homebuyer is now $2,514 at the current mortgage rate of 5.78%. That’s a 49% increase over the previous year, when mortgage rates were 2.93%. Redfin economists say they expect the bidding war rate to fall below 50% by the end of the year.
“Homes are now getting one to three offers, up from five to 10 two months ago and up from 25 to 30 six months ago,” said Jennifer Bowers, Redfin realtor in Nashville. “The offers are not as high above the list price as before.”
Bowers said she recently listed a three-bedroom, three-bathroom home “in a super-cute neighborhood for $399,900. It ended up being contracted for $12,000 above list price with an inspection, when three months ago the buyer would probably have paid $60,000 more and waived the inspection.
US Metro data
In Providence, RI, 45.3% of real estate listings written by Redfin agents faced competition in May, up from 82.7% a year earlier. That 37.4 percentage point drop was the largest among the 36 U.S. metro areas in Redfin’s analysis.
Then come Riverside, California (41% against 73.7%; -32.6 points), Raleigh, North Carolina (52.2% against 82.9%; -30.7 points), San Francisco (57.7 % vs. 78.2%; -20.5 points) and Orlando, Florida (51% vs. 71%; -20 points).
Competition increased year-on-year in just three of the 36 markets analyzed by Redfin. In Las Vegas, 74.5% of real estate offers written by Redfin agents faced competition in May, compared to 65.4% in May 2021 (+9.1 points). Next is Worcester, Mass. (81.8% versus 77.3%; +4.5 points) and Miami (63.2% versus 62.1%; +1.1 points).
In addition to experiencing the largest year-over-year competitive declines, Riverside and Providence had the lowest overall bid war rates, at 41% and 45.3%, respectively. This is followed by Olympia, Wash., where 47.2% of home offers written by Redfin agents met competition in May. Honolulu (47.8%) and Minneapolis (48.7%) round out the bottom five.
Worcester had the highest bidding war rate, at 81.8%, followed by Las Vegas (74.5%), Boston (72.6%), Dallas (72.3%) and Philadelphia (69.3%). %).
Competition by property type
Townhouses were more likely than any other type of property to encounter competition, with 64.6% of Redfin listings facing bidding wars in May. Then come single-family homes (61.6%), multi-family properties (58.2%) and condos/co-ops (54.7%).
Some buyers sought out townhouses because they were no longer in the single-family home market. The typical home that was contracted in March was 1,720 square feet, down 1.8% from 1,751 square feet a year earlier, according to a recent Redfin analysis.