Bidding Wars in a Pandemic?
May 21, 2020
The tight supply of homes for sale is prompting competition among buyers in some markets. The real estate brokerage Redfin reported that 41% of its agents’ offers faced a bidding war in late April and early May amid the COVID-19 pandemic. In some markets, the bidding war rate was above 60%, the brokerage reported.
“Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars,” says Taylor Marr, Redfin’s lead economist. “Home buyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm. But sellers are still holding off on listing their homes, partially due to economic uncertainty and concerns of health risks. In some hot neighborhoods, there may only be one or two homes for sale, with multiple home buyers vying for them.”
Redfin reported that Boston had the highest rate of bidding wars in the four weeks ending May 10. In Boston, agents reported 63.3% of their offers written had competition from other buyers. San Francisco and Fort Worth, Texas, followed with bidding war rates at 63% and 62.2%, respectively.
Crystal Zschirnt, a Redfin real estate professional in Fort Worth, says that during the first week of May one of her clients made an offer on a house that had 17 total offers. “The fierce competition is due to low inventory,” Zschirnt says.
Homes in the $300,000 to $400,000 range are seeing the highest number of bidding wars at 44%, but closely trailing are homes priced in the $800,000 to $1 million range at 43.8%, and $600,000 to $800,000 range at 43.5%.
“41% of Redfin Offers Faced Bidding Wars in Late April, Early May Amid Coronavirus Pandemic,” Redfin (May 20, 2020)
Updated: May 29, 2020