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The cut-throat competition to snag a home in the U.S. housing market has finally started to ease from pandemic highs.
In June, 65% of offers written by Redfin agents faced bidding wars, down from 72.1% in May and well below the “pandemic peak of 74.1% in April,” according to a new report from Redfin.
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It’s a relief for potential homebuyers who have been faced with surging prices as a result of the unabating competition amid a housing shortage.
During the first half of the year, it was “almost impossible to get an offer accepted,” according to Laura Sechrist Molenda, a Redfin real estate agent in Southern California. Now, agents are seeing more “buyers get cold feet,” Molenda added.
The decrease in competition is likely the result of “buyer fatigue” – which can result when a buyer constantly loses a bidding war or gets priced out, according to Redfin.
Sold sign in front of a home. (iStock)
“Two of my buyers just had their offers accepted because the sellers’ first buyers backed out,” Molenda said. “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.”
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What’s also helping is the fact that the supply of homes on the market is improving. In fact, new listings are up 4% compared to a year ago, according to the technology-powered real estate brokerage.
Still, competition remains stiff in certain sought-after markets especially “when there’s a lower-priced home,” said Redfin agent Kristi Miller of Seattle.
To date, the markets facing the most competition are Sarasota, Florida, and Charleston, South Carolina, with bidding-war rates notching 87% and 82.9%, respectively.
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Closely behind is Reno, Nevada, with 80% of offers written by Redfin agents facing competition. Charlotte, North Carolina, and Kansas City, Missouri, rounded out the top five markets, with 78.9% and 78.6% of offers facing competition, respectively.
On the other hand, bidding wars “are starting to slow for mid- and higher-priced homes,” Miller added.
Still, it’s a far cry away from June 2020 when Redfin saw a 56.8% bidding-war rate. At the time the market was beginning to rebound from pandemic-induced lockdowns.
