While bidding wars reached a pandemic peak in April, 60.3% of all offers written by Redfin in October experienced a bidding war, down from the 60.4% in September.
While the decrease in bidding wars is meager, Redfin expected this trend to continue from September due to the seasonal cooling of the market. But looking ahead, Redfin expects this number to plateau, if not trend upwards, as homebuyer demand has remained elevated through the beginning of the offseason as buyers seem to have found a second wind when it comes to looking for houses, possibly taking advantage of rising interest rates.
According to Redfin, a bidding war occurs when an offer (written by Redfin) received at least one other bid during the selling process. This dataset is still somewhat new—Redfin has only tracked this metric going back to April 2020.
“While the housing market slowed in October, the latest homebuying demand data indicates it may be heating back up this month—a sign that bidding wars could start to tick up again,” said Daryl Fairweather, Redfin’s Chief Economist. “Homebuyers who dropped out of the housing market in the spring have returned under the assumption there will be less competition. They may be surprised to discover that bidding wars are still common because so many house hunters are looking to take advantage of low mortgage rates before they rise.”
When breaking down the data for the top 42 metropolitan areas tracked by Redfin, an astounding 79.5% of offers experienced a bidding war in Salt Lake City, Utah, a nationwide high. This was followed by Sacramento, California, where 77.1% of properties experienced a bidding war, up 61% a year earlier, and Indianapolis, Indiana, where 74.1% experienced a bidding war, up from 40% year-over-year.
In last place was Detroit, Michigan, where 38.2% of properties experienced a bidding war compared to 48.5% of properties a year earlier.
“There’s been a noticeable uptick in bidding wars during the first couple weeks of November, and we’re seeing a lot more buyers than we typically would at this time of year,” said San Diego Redfin agent Jodie Lee. “Many buyers hit pause on making offers after constantly getting outbid during the spring homebuying season, but now they’re ready to get back in the game before mortgage rates increase.”
“There’s still a housing shortage, which means some homes continue to receive as many as 22 offers and go for $100,000-$150,000 over list price,” Lee continued. “The best thing buyers can do is act quickly, have a fully underwritten preapproval from a good lender, and consider waiving contingencies.”
Click here to view a full copy of the report, including breakdowns for the top 42 metropolitan areas.