Now recording its sixth month of decline, homebuyer competition has now fallen to levels seen during the initial throes of the pandemic.
According to Redfin, 44.3% of home offers written by their agents faced competition in July 2022. This seasonally-adjusted number compares to a rate of 50.9% seen in the previous month, and is down from 63.8% on a yearly basis.
This number is the second-lowest recorded by Redfin—only April 2020 saw a lower number as lockdowns brought the market to an essential standstill.
The typical home in a bidding war received 3.5 offers in July, compared with 4.1 one month earlier and 5.3 one year earlier, according to data submitted by Redfin agents nationwide. Redfin’s bidding-war data goes back through April 2020.
As a result of cooling competition, properties are staying on the market for longer giving buyers more options to choose from and room to negotiate. This is forcing some sellers to slash their asking prices as Redfin found that roughly 8% of listings have done so every week, the highest share on record.
“The market is wildly different than it was a few months ago. Buyers are competing with one to two other offers instead of four to eight. Some aren’t facing competition at all,” said Alexis Malin, a Redfin real estate agent representing buyers in Jacksonville, Florida. “There’s not the same sense of urgency. House hunters are scheduling tours four days in advance instead of one, and they’re becoming much more selective. If a home doesn’t check all of their boxes, they’re waiting until they find one that does. Six months ago, buyers were taking any house they could get.”
Malin continued: “Buyers have also started writing offers for less than sellers’ list prices—a reversal from the height of the pandemic, when homes were going for tens of thousands of dollars over asking. I haven’t written an over-asking offer in a month.”
With the scales of the housing market tipping increasingly in buyers’ favor, Spokane, WA Redfin agent Brynn Rea has a few tips for sellers:
"Sellers should make sure their home is move-in ready and not overpriced,” Rea said. “They should do everything possible to make their property pristine for the masses—invest in updates and make it feel fresh. Doing little things like replacing faulty faucets or painting walls will help sell a home more quickly."
Click here to view the report from Redfin in its entirety, including a breakdown of the top metro areas where properties are most likely to experience a bidding war.