Big Drop in Percent of Buyer Bidding Wars
U.S. bidding wars dropped 2.6 percentage points between July and Aug, with Tampa dropping 11 points and Orlando down 12.4. Still, bidding wars rose 2.8 points in Miami.
SEATTLE – Nationwide, 44.6% of home offers written by Redfin agents faced competition in August, the lowest bidding-war rate since the beginning of the pandemic when the housing market nearly ground to a halt, according to a new report from Redfin.
Year-to-year, U.S. bidding wars are down 63.5% a year earlier, and a revised rate of 47.2% in July marks the seventh-straight monthly decline.
The three Florida metros included in the study had mixed results, however. Miami came close to the national average, while two Central Florida cities saw a more dramatic month-to-month drop. Researchers say Tampa had the second-lowest bidding war rate of all cities in the study, with San Antonio and Phoenix also seeing a noteworthy drop.
Share of Florida offers that faced competition
- Miami: 42.2% (Aug. 2022) – 39.4% (July 2022) – 57.5% (Aug. 2021)
- Orlando: 30% (Aug. 2022) – 42.4% (July 2022) – 56.7% (Aug. 2021)
- Tampa: 23.8% (Aug. 2022) – 35.7% (July 2022) – 53.6% (Aug. 2021)
The typical home in a U.S. bidding war received 3.2 offers in August compared with 3.5 offers one month earlier and 5 offers one year earlier, according to the study.
Some buyers are dropping out of the market because mortgage rates have doubled year-to-year, reaching 6.29% in Freddie Mac’s latest weekly study. The increase in rates makes buying a home much more expensive: A buyer purchasing a $400,000 home has a monthly mortgage payment of roughly $2,500 with today’s mortgage rates, up from under $2,000 with last year’s rates.
To be included in this analysis, metros must have had a monthly average of at least 50 offers submitted by Redfin agents from March 2021 to March 2022.
Townhomes likely face competition, condos less so
Offers for townhouses were more likely than other property types to encounter competition, with 44.1% of Redfin offers facing bidding wars. They were followed by single-family homes (42.1%), multi-family properties (40.2%) and condos (37%).
Townhouses are popular in today’s pricey housing market because they’re typically smaller and more affordable than single-family homes.
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