Buyers’ "Pressure Cooker" Eases a Bit as Bidding Wars Drop

Buyers’ "Pressure Cooker" Eases a Bit as Bidding Wars Drop!

A survey of Redfin agents found a slow but steady drop in the percentage of listings engaged in a bidding war.

In April, 74.1% of sellers entertained multiple bids; in May it dropped to 72.1%; and in June, it fell to 65%. But Sarasota tops the list of U.S. bidding-war cities at 87%.

SEATTLE – While the U.S. remains in a strong sellers’ market, the buyers' competition seems to be easing a bit as home prices continue to rise.

In June, two out of three (65%) home offers written by Redfin agents faced competition, but that’s down from a revised rate of 72.1% in May and a pandemic peak of 74.1% in April. Still, the percentage of bidding wars in June was higher year-to-year. In June 2020 – the housing market’s early rebound after the first wave of pandemic shutdowns – the agents reported a 56.8% bidding-war rate.

While the study didn’t outline the reasons for a drop in buyer competition, buyer fatigue is likely one factor. Some house hunters have moved to the sidelines after losing bidding war after bidding war. An improving supply situation may also be making a difference, with new listings up 4% year over year. With more properties to bid on, the competition for anyone property may have dropped a bit.

“The first half of this year was red hot – it was almost impossible to get an offer accepted. But recently, we’ve started to see buyers get cold feet,” says Laura Sechrist Molenda, a Southern California Redfin agent. “Two of my buyers just had their offers accepted because the sellers’ first buyers backed out. The market is still competitive, but buyers are more trepidatious than they were at the start of 2021 and less willing to pull out every stop in order to win.”

Redfin agents report that more buyers are starting to keep contingencies – a sign that competition is beginning to abate.

Sarasota and Charleston have the highest bidding-war rates

Of the 52 U.S. metropolitan areas in the analysis, Sarasota, Florida, had the highest bidding-war rate – 87% of offers in June. Next came Charleston, South Carolina (82.9%); Reno, Nevada (80%); Charlotte, North Carolina (78.9%); and Kansas City, Missouri (78.6%).

“It’s still really competitive when there’s a lower-priced home in a very sought-after area,” says Seattle agent Kristi Miller. “But bidding wars are starting to slow for mid- and higher-priced homes.”

Metros must have had at least 20 offers recorded by Redfin agents in both June 2021 and May 2021 to be included in the analysis.

Florida metro areas by percentage of bidding wars

• Sarasota: 87.0% in June 2021; 70.0% in June 2020
• Orlando: 66.2% in June 2021; 68.1% in June 2020
• Jacksonville: 63.6% in June 2021; 52.9% in June 2020
• Tampa: 56.3% in June 2021; 68.2% in June 2020
• Miami: 49.4% in June 2021; 59.4% in June 2020