HOUSTON – (By Dale King, Realty News Report) – A seasonal chill is cooling the residential bidding wars in home sales market, which typically slows during the year-end holidays.
A new report from Redfin says the seasonal drop in the ambient temperature has moderated the number of potential buyers bidding on homes-for-sale.
In November, 59.5 percent of home offers written by Redfin agents faced competition, the lowest level in 11 months, says the real estate firm’s analysis of the situation. That number is down from a revised rate of 61.8 percent in October 2021 and a pandemic peak of 74.6% in April 2021, but up slightly from 57.3% in November 2020.
So, while the housing market remains hotter than normal due to record-low mortgage rates and an acute shortage of homes for sale, “homebuyer demand seems to be following a typical seasonal pattern by starting to slow as the year winds down,” according to Redfin Chief Economist Daryl Fairweather.
“It’s typical for competition to ease in the winter months as more families take time off for the holidays,” said Fairweather. “While competitive bidding for homes waned in November, it was still higher than a year earlier, which is a sign that demand will be strong in the new year.”
As this cooling effect swept across the Lone Star State, three of the major metros – Houston, Austin and San Antonio – all ranked below the Redfin average. Only Dallas did better. The Redfin report says its agents working in Big D faced bidding wars for 70.6 percent of properties on the market, down a hair from the 71.7 percent recorded in October 2021, but well above the 45.8 percent of properties that faced more than a single offer each during November of 2020.
Houston’s total for November 2021 ranked 37thof the 44 U.S. metropolitan areas in the Redfin analysis. The number of home offers was split almost evenly between those that faced competition – 51.2 percent – and those that didn’t, 48.8 percent. The October figure was only a nudge higher at 52.6 percent. But the November 2020 tally was more meagre, 38.5 percent.
San Antonio ranked 29thamong the 44 communities cited in the survey, coming in with 55.7 percent of home bids facing competition. Steading is apparently the name of the game in San Antonio, which saw 57.7 percent of home purchase bids facing challenges in October 2021, almost even with the 56.5 percent of home purchase offers that were the subject of bid wars in November 2020.
Stability is also built into the Austin home bidding effort where 57.6 percent of home price offers arrived as multiples in November 2021 compared to 59.8 percent in October 2021. The rate dropped just about 10 percent from the 69.9 percent of challenged home bids in November 2020.
The Redfin report found that Richmond, Va., had the highest bidding war rate overall for November, 80 percent, a drop from 69.7 percent in October.
Next came Salt Lake City at 73.8 percent and San Diego at 72 percent. Honolulu and Dallas rounded out the top five, with bidding-war rates of 71.1 percent and 70.6 percent, respectively.
“Bidding wars are still happening, but buyers are starting to get more breathing room,” said Jill Thompson, a Redfin agent in Indianapolis, where the bidding-war rate dropped to 36.8 percent in November from 73.6 percent in October.
“A few months ago, the typical home was going for $15,000 to $20,000 —sometimes even $50,000 — over the asking price,” she said. “Buyers were paying cash, waiving inspection contingencies and overlooking necessary repairs in order to win.”
“Today, buyers are more cautious about overpaying, aren’t waiving inspections as freely as they were in the spring and feel less of a rush to commit to a house after the first tour.”
Metros must have had at least 20 offers recorded by Redfin agents in both November 2021 and October 2021 to be included in this analysis. The report was written by Hannah Tan and Alison Bentley, who are both part of Redfin’s content marketing team.
Dec. 26, 2021 Realty News Report Copyright 2021
Check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5
File: Seasonal Truce in Bidding Wars
Photo: By Ralph Bivins, Realty News Report Copyright 2021