According to a recent MReport, bidding wars for homes have been ramping up. Redfin revealed that more than 50% of its offers faced competition last month. June was the second consecutive month that bidding wars were on the rise. Redfin reported the competition is most likely due to limited supply of homes for sale, as well as the lower mortgage rates. Redfin real estate representatives reported that the bidding wars have typically included multiple bids. In addition, single-family homes and townhomes are more likely than condos to receive these multiple bids. Many are surprised by the amount of people bidding on homes because of the impacts the COVID-19 pandemic has had on the economy.
WHAT ELSE DID THE REPORT SAY?
According to Redfin Economist Taylor Marr, “Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades. It’s like a game of musical chairs where only the best bidders get a seat. Both renters and move-up buyers who have held onto their jobs are vying for the small number of single-family homes on the market as they realize they need more space for their families”. The average mortgage rate fell to 3.03% during the first week of July, marking the lowest 30-year fixed-rate ever recorded. In addition, the amount of available homes is at its lowest since 2012. The Redfin report also included that the metro areas of Boston, San Diego, and Salt Lake City were revealed to be the most competitive markets. James Gulden, Boston Redfin agent stated, “This is the most competitive real estate market I can remember. Sellers don’t want homes to be on the market any longer than necessary because of COVID-19, so they’re setting offer deadlines, which create a frenzied, competitive atmosphere.”
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