Supply-and-demand is favoring home sellers these days, as 49.4% of Redfin offers faced competition in May, up from 43.9% during the prior month, according to a report from the technology-powered real estate brokerage. Whether the trend is sustainable, however, is another matter.
While sellers are jumping back into the market as states across the country reopen, a shortage in houses for sale remains, which is fueling bidding wars. The number of listings on the market in May was 18.9% lower than the same period last year. Of the 24 metros in the analysis, 11 saw a majority of Redfin offers facing competition in May, up from eight metros in April.
“Bidding wars also jumped in May because homebuyers felt they were starting to get more clarity around where the economy was headed, with cities around the nation lifting stay-at-home orders. This gave house hunters more confidence to compete,” said Redfin Lead Economist Taylor Marr. “But with coronavirus cases back on the rise in many states, only time will tell whether that confidence is sustainable.”
Redfin agents say competition has picked up significantly in recent weeks with fierce bidding wars, many involving all-cash offers that are driving up prices.
The Boston, Massachusetts metro area had the highest rate of competition, with 64.1% of offers written by Redfin agents on behalf of their homebuying customers facing bidding wars in May, up from 56% in April. It was followed by Dallas, Texas at 60.8%. Washington, D.C. rounded out the top three, at 57%. The other metros where the bidding-war rate was above 50% were Salt Lake City, Denver, Seattle, Austin, TX, San Francisco/San Jose, Minneapolis, Los Angeles and Portland, OR.
“We’re seeing a frenzy,” said Boston Redfin agent Delince Louis. “Any home below $500,000 is receiving multiple offers; we just don’t have the supply to meet the demand.”
In Miami, just 28.6% of offers faced competition, the lowest rate of any market in this report. The metro with the second lowest bidding-war rate was also in Florida: Tampa, at 31.5%.
In May, 51.5% of offers for single-family homes faced competition, up from 45.6% in April. That compares with 48.7% of offers for townhouses and 38.8% for condos.
“People no longer want to share laundry or a yard,” Louis said. “I listed a single-family home in Boston proper at the height of the coronavirus lockdown and it got 14 offers. ‘Home’ means more right now than ever, and we’re seeing this new sense of urgency among buyers to find places with more privacy.”
