Bidding Wars Return

March 20, 2015

The number of home sales that included a bidding war is treading upward. Thirty-three percent of all sales were at or above the asking price, which is often indicative that more than one bidder was involved in a transaction, according to data from the National Association of REALTORS®. That marks the highest rate since 2006.

Bidding wars are rising mostly due to a lack of houses for sale. The inventory of homes for sale has been at about 1.8 million properties for the past three years. Prior to that, inventories were about double– reaching a peak of about 3.5 million properties for-sale in 2007.

Housing inventories are down by some of the largest amounts year-over-year in Las Vegas; Key West, Fla.; Colorado Springs, Colo.; Palm Bay, Fla.; and Columbus, Ohio, according to realtor.com’s January National Housing Trend Report.

Some home owners are delaying putting their homes up-for sale and opting to stay put until they recover more equity. The home equity picture has been showing signs of improvement lately.

While inventories remain tight, buyer demand is on the rise. An improving economy is causing more potential home buyers to enter the market.

"The result is higher prices and buyers jousting with one another to make the winning offer," Bloomberg reports.

Source: "The Bidding Wars Are Back," Bloomberg (March 18, 2015)